Google Find us on Google+

Amazon’s corrupt minimum wage ploy

Oct 4, 2018 by

Amazon is up to its old tricks again. Once again, the retail giant is seeking competitive advantage by calling on big government to smash its rivals. Once again, this massive corporation is portraying its regulatory robbery as good citizenship.

Nobody should fall for this well-worn strategy of lobbying in order to raise competitors’ costs and drive them out of business.

Amazon announced Tuesday it would raise all of its employees wages to $15 an hour. That’s great. Employers should pay workers whatever they want to pay workers. Rising wages reflect increased competitiveness in the labor market. Competition is great, and more competition over workers is always very good for workers.

Aside from market pressures, higher pay for workers also improves morale and often improves output. In Amazon’s case, in particular, this raise may ward off the push for unionization.

All that is fine. But there’s a problem when Amazon goes to big government to demand that everyone follow suit.

“We will be working to gain congressional support for an increase in the federal minimum wage,” said Amazon spokesman Jay Carney. Carney’s revolving-door pedigree—from straight-news reporter to Democratic flack/public servant to corporate flack—is the perfect flavor of corruption for Amazon’s little stunt here.

Amazon believes it can afford to pay its workers $15 an hour because of its economies of scale and its cutting-edge automation. The smaller competitors that Amazon wants to drive out of business probably cannot afford that. Mom & Pop can’t replace the high school stock boy with robots when Congress outlaws his job.

And that’s why Amazon is doing this. Goliath is trying to outlaw David.

Lobbying for barriers to entry is a well-worn tactic. Walmart in 2009 lobbied for the employer health-insurance mandate, knowing it would impose more of a cost on Target and every other competitor.

Nobody is stopping Amazon from paying above-market wages. Nobody was stopping Walmart from paying above-market health benefits. But both of these mega-companies saw that Uncle Sam could help them out by erecting barriers to competition.

This doesn’t merely happen in employment law. Philip Morris lobbied for years for federal regulation of tobacco. Smaller cigarette companies called the bill eventually signed by former President Barack Obama the “Marlboro Monopoly Act.” Philip Morris/Altria could afford the costs; little guys couldn’t.

Mattel and Hasbro lobbied for the toy-safety regulation that threatened to drive small toymakers out of business.

Regulation and mandates add to the cost of doing business, and those costs always fall more heavily on the little guy.

Amazon has experience in this game. The company used to oppose efforts by states to collect sales tax on online sales. Then Amazon increased its network of distribution centers and courts ruled that a warehouse in a state constituted enough of a physical presence that it was valid for states to collect sales tax from Amazon.

Once Amazon was paying the sales tax everywhere it had a physical presence, it flipped sides in the debate. Amazon came out in favor of federal legislation requiring all e-retailers, big and small, physical presence or no, to collect sales tax.

In a free society and free markets, there is a distinction between what you decide is best for you, and what you think should be required of everyone else. In Amazon’s vision, there is no such distinction. If they’re going to pay a higher wage, they believe nobody else should be allowed to pay a lower one.

It’s certainly not a noble position. You could call it shrewd if you want. We call it corrupt.

Source: Amazon’s corrupt minimum wage ploy

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

UA-24036587-1