Apr 042021
A lot of regulations in the labor market nowadays are pushed by established giant companies that are trying to restrict competition. By making it very expensive for new business to start and compete with them, they can charge much higher prices. It’s like a government-imposed Monopoly Lite. It’s why things like Hair Braiding Licences exist.
I think Amazon has pulled this sort of genius-evil move with their $15 min wage.
First, they raised their own minimum wage for all employees to $15/hour. Among some people, this got them a lot of good will. Amazon is profitable enough that they can afford to pay $15 to everyone. In their industry, it also meant they could lure away much of the most productive workers from other employers.
Now they are lobbying Washington to raise the minimum wage for the entire nation to $15/hour. I think they’re betting that there are a lot of Amazon competitors who cannot afford to match that wage. Amazon has incredible efficiencies that smaller businesses can’t leverage. This would put those competitors out of business, leaving Amazon to reap their customers. Furthermore, the other business in their industry have lost some of their most-productive workers to Amazon, the ones who could be profitbly employed at $15/hour. If they’re mostly left with lower-productivity workers who they can no longer pay lower wages to offset this, they will have an even harder time staying solvent.
This likely won’t change much for city-dwellers, as many urban areas already have wages higher than $15/hour. But rural towns where a significant portion of the population is working at Walmart, and making less than $15 was fine beceause cost of living is low out there? They’re going to have a bad time. If those Walmarts are forced to shut down, the people who previously shopped at Walmart are going to have to turn to Amazon for their goods. Which is exactly what Amazon wants.