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Amazon’s Minimum Wage Hike: Heartfelt Activism, Or Crass Political Opportunism?

Minimum Wage: Amazon, the massive online retailer, announced with great fanfare that it will raise its minimum wage to $15 an hour, and will encourage others across the nation to do the same. Is it unselfish public-mindedness, or political and competitive pressures that’s behind the move?




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Sorry, Jeff Bezos, but we don’t buy the social justice talk anymore. Anytime a multi-billion dollar corporation begins talking about social issues, check your wallet. And then look at who’s pressuring them.

That’s certainly the case with Amazon, which on Tuesday announced the minimum wage hike.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” founder and CEO Jeff Bezos said in a statement about the pay raise, which goes into effect next month.

“Leading” will be expensive, since a lot of workers will be affected. Some 250,000 people work for Amazon, which plans to hire another 100,000 for the Christmas holiday season.

But the truth is, it’s a move not premised on doing “the right thing,” as leftist minimum wage activists like to say, but on Amazon keeping its edge as the nation’s leading retailing force.

Bezos’ Minimum Wage Hike Activism

Start with the fact that Jeff Bezos, a bazillionaire from his Amazon holdings (in fact, the richest human on Earth), won’t be pulling out his checkbook to pay for this minimum wage hike. Whatever else you might feel about this, you’ll pay for it. In fact, you probably already are, since Amazon just jacked up its Amazon Prime subscriptions by $20.

Nor did Amazon’s move come from some deep cry of conscience over economic injustice. Rather, it came in response to a brutal political attack on the company by socialist millionaire Senator Bernie Sanders.

In September, Sanders ripped Amazon for not paying its workers, especially seasonal and part-timers, more. And he claimed, absurdly, that Amazon was forcing workers onto welfare — and therefore also forcing taxpayers to subsidize one of the biggest companies on Earth.

Memo to Bezos: When you start taking economic advice from an economically illiterate politician who, among other things, has lauded Venezuela’s insanely destructive socialist policies, you might be heading for trouble.

At any rate, this decision was not premised on social justice, but on hard-nosed business and political considerations, pure and simple. In short, Amazon wants its competitors to do the same.

As Reuters aptly noted: “The online retailer also said it would now lobby in Washington D.C. for an increase in the federal minimum wage and urged its competitors to follow its lead as the union-led ‘Fight for Fifteen’ movement pushes for higher remuneration.”

‘Fight For Fifteen’

As we’ve noted here before, the “Fight for Fifteen” movement is one of the most retrograde of its kind. By pushing for a national minimum of $15 an hour, it will ensure that low-skilled, little-educated minority and immigrant workers stay on the bottom in informal labor markets without benefits — or lose their jobs entirely, by pricing them out of the market.

No, we’re not making this up. It’s the conclusion of many economic studies. One such study of recent minimum wage hikes by economists Jeffrey Clemens and Michael R. Strain found that “relatively large minimum wage increases (defined as those exceeding $1) reduced employment among low‐skilled population groups by just over 1 percentage point.”

Ponder that for a moment. Given that the current minimum wage is $7.25 an hour, you can guess what kind of damage this will do.

And now Amazon is siding with this pernicious policy, which applied nationally will further isolate low-income minorities and widen our inequality gap. Is that what “progressive” means?

On the business side of the ledger, the U.S. unemployment rate is near its lowest level in half a century and Amazon has to scramble for qualified workers. That means pay them more. What better way than make it a “policy?” And then wrap yourself in the social-justice flag and insist everyone else do the same thing? Also, your weaker competitors, who don’t have the cushion of billions of dollars in profits to pay for higher wages, will struggle and in some cases fail.

Pay Raise — Or Competitive Edge?

We aren’t the only ones noticing this.

As American Enterprise Institute fellow James Pethokoukis wrote recently: “The (minimum wage) boost would give the trillion-dollar retailing giant an edge over rivals such as Walmart and Target in the competition for increasingly scarce workers. It also gives the company a reputational lift — or perhaps a political heat shield — after politicians such as Bernie Sanders have attacked it for its labor practices, including how some employees receive assistance from government safety-net programs.”

Don’t get us wrong. We’re happy for Amazon workers who’ll get a minimum wage hike. In a rip-roaring economy, many workers are getting raises for the first time in almost a decade. That follows  the lean, dismal Obama years. This is as it should be.

And, no, we aren’t anti-Jeff Bezos. We wish him the best in all his endeavors, and he has been generous in his philanthropy, as befits a billionaire.

But forcing all companies in all states regardless of their fiscal condition to boost their wages to $15 an hour is a foolish policy, one that will destroy jobs and hurt the very people minimum wage proponents and their union allies claim to help: those without education or training, poor minorities, the young and immigrants.

So call Bezos’ minimum-wage grandstanding anything you want. Just don’t call it social justice.

YOU MIGHT ALSO LIKE:

Minimum Wage Is Racist, Kills Jobs And Doesn’t Help The Poor — Apart From That, It’s A Great Idea

MinimumWage Hikes: Economic Poison For Venezuela

The MinimumWage Job-Killer Strikes Again!


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