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Comment by swebs | Hacker News Reader

>In addition, the company also pledges its public policy team will lobby for an increase to the federal minimum wage from $7.25 — it doesn’t identify a specific wage that it’s targeting, but instead says, “We believe $7.25 is too low. We would look to Congress to decide the parameters of a new, higher federal minimum wage.”

I'm going to take a wild guess and assume it will be $15/hour. That way they'll get to look progressive for adopting this wage early, while mitigating their competitive disadvantage by forcing every other company to raise their wages too eventually.

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Wow, does the top comment always have to be cynical? This is exactly what everyone wanted Amazon to do. Maybe it's time to suck it up and give praise where praise is due?

There are also benefits to paying more salary than your competitors (no hiring shortages, best employees, low turnover, etc), so I'm not going to blindly accept that it's now in Amazon's interest to drag the rest of the industry along with them.

But even if I did, there's absolutely no guarantee that this kind of lobbying would ever work. And if it did, it could be decades from now, $0.50, or both. In the meantime, Amazon has already put their money where their lobby is.

Well in this respect: Amazon chooses to link the two discussions themselves. They could have easily made their communication less open to an easy attack by pledging $15 an hour while lobbying silently, or at least communicating that on another moment. They could have noble intentions with both moves. I'd even expect them to have noble intentions since $15 seems an unreasonable large increase from $7.25. Why link to two discussions? It's an error of their communication department IMHO. You've got to think as the receiving party. The receiving parties of both messages are separate: communicate them separately.

While it would be in Amazon's interest to get the federal minimum wage increased after setting their internal minimum wage at $15/hr, why is this negative? Aligning business interests with the public good is brilliant IMO and I strongly feel a $15 minimum wage, plus regular increases, is for the public good. Kudos to Amazon for making the wage increase and aligning their business interests and lobbying efforts to a federal wage increase.

Wait, why is it bad that Amazon is lobbying for this? Would you say it was bad if, say, ACLU was lobbying for a $15 minimum wage?

My guess is that from Amazon's point of view, they are winning political points by not just raising their own minimum wage to $15, they are also using their standing in the industry to increase quality of life for non-Amazon minimum wage workers. If they succeed, I am happy to grant them the credit they are due.

If a big corporation doing the right thing results in more profits for them, I don't see that as grounds for criticism. Did we criticize Starbucks when they offered a competitive wage and free college education? Or any of the other companies that chose to pay above the minimum?

It isn't bad that they are doing it, they are just pointing out the probable motivation.

My guess is because how big advantage amazon has compared to smaller companies. They have good tax cut. Taking that aside, they also applied tight working time and high kpi, which can't be applied by smaller companies. And it gets better with PR stunt like this.

And CMIIW, I think increased minimum wage will increase goods price and higher skilled worker's wage overall, making those changes useless again.

It's just my 2 cents, with source limited from following recent news.

By lobbying for the $15 minimum wage they are working to make sure that their competitors don’t retain any competitive advantage on wages. So now the brick and mortar shop that is barely in business because of competition with Amazon is going to get hit with a big bump in wage costs. They either will raise prices, or go out of business, both scenarios benefit Amazon.

That's a nice story, but it's just that. Alternatively, all the minimum wage workers will have more expendable income. Some of that may be spent at those brick-and-mortar shops, and will offset the additional costs.

Remember that the velocity of money makes it a non-zero-sum game.

EDIT: Ends up that Wikipedia covers this nicely:

https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...

"The interconnection of price levels, central bank policy, wage agreements, and total aggregate demand creates a situation in which conclusions drawn from macroeconomic analysis are highly influenced by the underlying assumptions of the interpreter."

Also has a nice side-bar quote from Henry Ford, who was partially known for higher wages, and which I think addresses the point I was trying to make (emphasis mine):

"The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One's own employees ought to be one's own best customers."

Or they spend their extra money at Amazon because prices are lower. Or you are right and it helps brick and mortar in the handful of cities with Amazon warehouses, but hurts everywhere else.

Worst case for Amazon is they maintain status quo by forcing competitors cost up. Best case for Amazon is that they drive some of their competition out of business, or take some of that business because super giant Amazon is better able to absorb the increased wage cost than smaller businesses.

It is very much like their state sales tax collection strategy. Oppose it for as long as possible, accept it, then lobby for everyone else to have to do it.

The thing is, this is a bit circular. How can Amazon pay more than others, but it hurts them less? Because they have some kind of competitive advantage, no? That advantage is going to manifest somewhere. Saying that they are going to get a competitive advantage by raising wages, which they could only do because they had a competitive advantage... Doesn't really go anywhere. This just happens to be the chosen manifestation of their advantage, and honestly higher wages are probably one of the more socially-positive manifestations.

It's not really a story is it? Output is a function of capital, labour and productivity. Double cost of labour and those that get the most productivity out of capital gain competitiveness. Who is relatively capital intensive? Amazon. So it's a pretty factual story economics-wize.

There's no doubt labour is better of in the short run with double wages. I would not doubt the effects in the long-run but that's part belief. The market structure will change, less capital intensive firms will drop out. That might be brick and mortar stores (note: bricks are capital but bricks are not really productive in the sense meant above).

So you're saying they shouldn't lobby for an increase in the minimum wage, and that large numbers of workers' wages should languish because they work for small businesses?

No, I'm saying it is in their self interest to lobby for it.

I fail to see why it is bad when economic interest and public interests line up. Would you rather Google not advocate for net neutrality because it benefits them?

Precisely this. A small shop in Mobile, Alabama being forced to pay the same minimum wage as some company in Santa Clara County is ridiculous. A rented closet in the Bay Area costs more than a house payment in Mobile. Also, the tax burden on $15 in Alabama is far lower than the tax burden on someone in California.

Want to give low wage people an actual pay raise? Cut federal payroll taxes since those affect workers equally as they are percentage based.

A $10 wage in Alabama is far more valuable than a $15 wage in Sunnyvale. And conversely, a $15 minimum in Alabama would be more catastrophic to a business than the same minimum in Seattle.

Just a clarification, that "small shop" would have to have over $500,000 in sales in order to be required to abide by minimum wage laws.

"For most firms, a threshold of $500,000 in annual dollar volume of business applies to be covered (i.e., the Act does not cover enterprises with less than this amount of business)."

I'd also argue that definition of "small shop" $500k threshold should change between California and Alabama.

https://webapps.dol.gov/elaws/elg/minwage.htm

If you lower the federal payroll taxes then won't companies correspondingly lower wages for new employees?

Not if they are competing for employees; but, yes, if the labor market for particular forms of labor is a monopsony, you are stuck with the inverse of monopsony rents.

Of course, if that's a significant general problem rather than a narrow edge case, the entire idea of market economics is a sad joke.

Who claimed it was bad?

I'm not arguing that it's bad to lobby for a higher minimum wage. Only that to communicate both the raising of your wages and the lobbying at the same time, you mix two messages for different audiences. Hence the sour replies, that mix private actions with public beliefs of a firm.

The argument that their relative competitive positions changes by first-moving on wages seems not in doubt? Obviously when the wages double for everyone the most capital intensive gain competitive power.

When the topic in question is how one of the most powerful companies on Earth chooses to use its power we should strive to always be this cynical.

Skepticism of concentrated power is the ur-American political belief. We seem to have forgotten that lately.

If you're willing to shame a company for behavior you don't like, I think you should be prepared to give praise when they do exactly what you just asked for. When you constantly move the goal posts just so that you never have to abandon your righteous anger for even one day, what kind of incentive does that give companies to change their behavior?

Companies don't really deserve praise, practically ever because their motives are ultimately guided by profits. They only act in the interest of revenue. Sometimes those interests align with the employees, but let's not pretend this isn't self preservation on amazon's behalf.

That's silly. You could also say that humans don't really deserve praise since our motives are ultimately guided by our self interest. We only do things to make ourselves feel good, or make ourselves look better. I think that companies have many paths towards self preservation, and that choosing the paths that lead to a better world deserve praise regardless of motive.

I disagree there, because all throughout history are examples of genuine heroes who stood to benefit not at all from their actions. Vince Coleman[0] comes to mind.

Humans can be motivated by many things, profit and looking good included. I'm vaguely aware of a philosophical branch that postulates that all actions are selfish, but that ain't science and so I disagree. People will sacrifice their pyramid of needs towards s greater good, I've never heard of a company utterly scuttling profits over the greater good though.

On that note, in this case Amazon obviously is shedding profit for a greater good here, especially if they actually lobby, so in this case I believe they (particularly the people that made this decision) deserve praise.

(0)https://en.wikipedia.org/wiki/Vince_Coleman_%28train_dispatc...?

It doesn't matter whether they're doing it for a 'greater good' or not. You should praise them anyway. They took steps to create the world that you want. It doesn't matter why they did it.

"Ends not means" is a nigh-universally dangerous philosophy.

Motives matter.

My comment was about 'motivation'. Which is neither ends, nor means.

How does motive relate to means here? I think an "ends vs means" argument would be around whether it was ok to cull half their workforce to pay for this wage increase.

Congress was looking to tax companies whose employees redeem federal benefits due to low wages. Walmart and Amazon we're the poster companies discussed in the legislation. This permanently removes that pressure and prepares Amazon for the inevitable. Get your head out of the sand, if you think this isn't a strategic play from one of the most valuable and business-savy corporate institutions on the planet you are being willfully ignorant.

I would praise them if they simply made the change before being shown to know about large % of their staff being forced to take subsidies to be able to live in national press. I don't tend to praise minimum standards of ethical and moral behavior.

You think paying people $15/hour is a minimum standard of ethical and moral behavior?

Yes. I think being one of the largest/most profitable companies in the US while paying people the minimum wage required by law -- which also happens to ensure most of those employees can't survive without government subsidies in their locals is well below the minimum standard for ethical and moral behavior.

Reverse, Do you think that a company such as amazon should be paying their fulltime and part time employee a wage that requires government subsidies (that you and I pay for) to survive while enjoying the amount of revenue and profit they are receiving?

> Reverse, Do you think that a company such as amazon should be paying their fulltime and part time employee a wage that requires government subsidies (that you and I pay for) to survive while enjoying the amount of revenue and profit they are receiving?

Yes, I do. I think most people misunderstand government subsidies when they make this argument. The idea that the company you work for is responsible for maintaining your standard of living is a weird one, that doesn't really come from any obvious moral principle. We, as a society, have decided that we don't want people to have a standard of living below a certain level. Therefore we, as a society, should provide the resources to ensure that that happens. If Amazon wants to come to those people and say "we'll give you $X/hour to do this task for us", and those people say "Yes", then I don't see any good reason for that to change the moral calculus of society at large, or for Amazon to suddenly become responsible for that person's general welfare.

It does matter. In my view: if they were "forced" by bad publicity to do a net positive thing it hardly matters at all (except for the employees in question), because the systems and structures and incentives to keep acting selfishly and greedily are still there intact. No real change was effected.

Likewise for the system which caused them to act in the greater good - the demands of their customers. How is that any different than when a human is "forced" to act by their sense of empathy or duty?

I disagree completely. They didn't have to capitulate to those forces. They chose to. If you reward them for doing so, they'll capitulate more readily in the future than if you do not. This is really simple: carrot and stick. Everyone knows this approach to literally everything works. People seem to want to discard it here because they don't want to let go of their negative emotions, because they've come to identify with a sense of moral outrage completely divorced from any objective social goals.

The three possible target audiences for saying something are yourself (i.e. getting catharsis by articulating one's beliefs), others (i.e. that there is a network effect to him convincing you and you convincing others and shifting a social consensus), or the subject of the speech (i.e. Amazon will read Hacker News and make decisions based on the extent to which the comments flatter them).

On that basis, is the implication here that hearing anonymous and vague internet praise actually tips the utility calculus of the company in some way?

Because if not it's hard to know why anyone should praise them -- as opposed to acknowledging the decision, or silently mentally updating one's assessment, or not engaging with the news at all, or criticizing them for not doing more.

> On that basis, is the implication here that hearing anonymous and vague internet praise actually tips the utility calculus of the company in some way?

In aggregate, yes. You seem to be trying to reduce this to "who cares about silly comments on the internet", but of course, that isn't the point. The point is about where our moral sentiments ought lie, collectively. And yes, the rollup of all the individuals making throwaway comments on the internet actually do synthesize much of our collective worldview. So yes, I do think that anonymous and vague internet praise actually tips the utility calculus of all companies. If you don't, then you haven't been paying much attention for the last decade.

>On that note, in this case Amazon obviously is shedding profit for a greater good here

They're obviously caving into pressure - from unions, social activists and Bernie Sanders.

>especially if they actually lobby

Which they'll do especially because they don't want to be put at a competitive disadvantage by companies who pay minimum wage.

It depends to what degree a person or company acted positively on its/their own. Amazon would have never done it, if it wasn't for the immense pressure. So, it is not worth much praise.

I am, however, prepared to order something through them in hopes of making them instinctually associate this type of behavior with reward.

You can't apply pavlovian psychology to corporations. Only unless it involves stock tickers and executive bonuses.

> You could also say that humans don't really deserve praise since our motives are ultimately guided by our self interest

You could say that and you would be right. Why should anyone praise you if your underlying motivations are self-centered? You seem to be asserting that this is fundamental human nature, however, which is a belief which has been refuted plenty of times throughout history.

Why shouldn't self-interested action be praiseworthy?

If the rules of the game are that we only act out of self-interest, then I would only praise you if it directly benefits me in some way. Is that the sort of relationship you would like to have with everyone in your own life?

If you've oversimplified psychology and behavior that much there's no point asking "why" anyone would praise anyone.

You had as an unstated axiom that self-interested action are not praiseworthy. You still have not made an argument for that, though you have pointed out that a world composed only of self-interested action would be an unpleasant one (I agree).

However, using a more realistic understanding, where actions come from a multitude of motivations, why do you consider a given action's being self-interested to exclude it from praiseworthiness?

Sorry, the post I responded to asserted that “our motives are ultimately guided by our self interest”. It seems like you are now applying my words to a different context.

Companies don't really deserve praise, practically ever because their motives are ultimately guided by profits.

That's not actually true.. it's a caricatured straw-man argument, usually employed by people who want to attack Capitalism in the general sense.

Of course companies have to make a profit to survive; but not all companies ruthlessly optimize every single variable to squeeze out the last $0.0000001 of profit, regardless of the side effects. At the end of the day companies are made up of people, and even if big-shot CEO's tend to have more pyschopathic tendencies than average, they're still human beings. And they usually answer to boards, and are advised by other managers, who are also human beings.

Not saying all companies are noble, virtuous, and pure or anything. But hyperbole in the other direction is just as inaccurate.

Don't know why you're being downvoted. Since the 70s people have been throwing around this "corporations must ruthlessly pursue profit and profit alone" idea as is it's a truism. It's not even close to true, neither as normatively or empirically.

That's odd. I usually see that argument employed the opposite way — to dismiss criticisms of companies by suggesting that there is no moral dimension to a corporation's actions, and thus it is unreasonable to ask a company to do anything for the good of society or criticize it for failing to do so, because a corporation's purpose is merely to seek profit.

I agree with you, though. The idea that companies have to be like zombies, mindlessly shambling toward revenue, is false. If a company acts that way, it was a choice on somebody's part, not an immutable law of nature. If somebody in charge decides they want it to act differently, they have that option too.

Then they don't deserve shame either, right?

Employees are driven by their own self-interest, so we ought not praise their efforts either right?

There is no such thing as altruism: everyone has their agenda.

So what you're saying is, Amazon's self-interest in making tons of money for its shareholders is just as valid as its workers' self-interest in not starving to death?

So exhausting. Give them a break. They did a nice thing.

The modern world was built by corporations. Access to clean water, cheap and healthy food, energy, infrastructure. Yes taxes fund a lot of it but it is corporations that largely do the work at least in the US. Being for-profit is a good thing on the whole because that enables the corporation to continue solving problems for more people. Obviously there is a dark side too. The pursuit of profit left uncheck leads to harming the environment, screwing people out of money, etc which is why regulators are needed.

To say corporations are all bad all the time is bullshit. Likewise to say corporations are all good all the time is also bullshit. Like everything, there are pros and cons. Overall I think our capitalist economy does more good than bad. If it didn't, none of us would be able to be having this debate because we would be too worried about the next meal.

> Access to clean water, cheap and healthy food, energy, infrastructure.

Clean water access? Paid for my government. Cheap and healthy food? Government subsidies. Energy? Government funds majority of research. Infrastructure was mostly inlaid by Government implemented New Deal/other job creation programs.

Corporations had little to no involvement in 'doing the work' here. Access to cheap/healthy food was before corporations were the majority of agriculture due to government subsidy. Energy is largely built on research which is largely funded by the government. The majority of interstate groundwork as it's been laid out today was started by the government's roadbuilding job-creation programs.

While large legal entities may have their benefits, one shouldn't subscribe undue merit to them in the pursuit of attempting to dissuade undue chagrin.

As I said, taxes, aka government subsidies, paid for or continues to pay for a lot of my examples. The railroads were all built by corporations. ExxonMobil is a corporation, Comcast is a corporation, even your local utility for water, etc is likely a corporation. Corporations do much of the work, the government just pays for it with taxes.

Government doesn't generate any money. They get the money from taxing employees of the large corporations. It is a symbiotic relationship.

Are you saying the government does not generate value?

I meant government does not generate taxes. It's people and the companies they work for that pay the tax which government then uses. So it's disingenuous of parent to claim government alone is responsible for the good it does.

It does, but it is different from fiscal value used in economics.

If it takes sustained shame for a long period the best response warranted is a milquetoast "Thanks, next time be faster."

An organization which only chooses to do the right thing in response to righteous anger from the public is never going to be worthy of praise.

I feel like you're reading a different tone from that comment than I am. The GP provides, to me, a realistic prediction of what Amazon will do next. Making predictions and citing facts isn't anger. I didn't read any anger into the comment, but I get plenty from you. Corporations don't have feelings. Amazon improved their behavior because of pressure from labor, not in order to get invited to your Thanksgiving dinner this year. The raise will likely demotivate unionization efforts, and that likely factored into the decision-making process.

Thank you for your message. This is not being cynic or critical. Real critic also praise when there is progress. In the present case this is just a hater. Hater are gonna hate, no matter what.

Isn't "constantly moving the goal posts" the name of the game in capitalism? Good on Amazon for increasing their minimum wage, but why shouldn't it also be met with a healthy amount of skepticism. Companies definitely do things for the common good (I don't see much competitive advantage gained from going 100% renewable energy - a common move for many tech companies - apart from maybe attracting better/more employees) but it would be naïve to think that most decisions a company makes don’t intend to better their market position in some way or another.

Amazon (and all companies) spend most of their time/resources figuring out how to make more money and gain more power; I think it's appropriate that we as consumers, in turn, spend our time demanding more of them in terms of both value delivered and net benefit to society.

I don’t think Amazon deserves much sympathy. They're one of the most powerful companies in the world, have made a small group of people very rich while continuing to treat employees poorly. It's great that they're making this move but I don’t think we as consumers/citizens should be merely satisfied with it.

I mean, do you want good behavior to be rewarded or not?

If good behavior isn't rewarded, how do you think companies might act in the future.

People, as well as companies, respond to incentives.

I agree with you. And I think it's good that Amazon is given credit for doing this. But I also question whether the incentive that pushed Amazon to do this has as much to do with magnanimity as it does with generating goodwill and preventing tougher legislation. Bernie Sanders and his group have been calling on Amazon to improve worker conditions and pay, and while they have praised Amazon for doing so, I think they would be naïve to think there's not more to expect or demand of Amazon in this realm. That is in effect "rewarding" them for good behavior, but there should also be some negative incentives in place (IMHO) to further encourage more of this good behavior

Corporations are not people, and do not "deserve" praise. They exist to enrich their shareholders.

Companies, like countries, don't have feelings. Back in school my history teacher was very insistent on that fact, if you said something like "country xy was provoked to enter the war" he'd really tear into you. He taught us to spot propaganda and the motivations of individuals.

There's no need to move goalposts when your objection is concentration of power, resources and finance. By that standard, one can continue to roundly criticise Amazon for all eternity as long as they remain as relatively dominant: this stance favours distribution of control of resources among small independent stakeholders, and is a perfectly legitimate stance to take.

...

FFS -- it was shaming of amazon's pay rate for their employees that caused the change in behavior in the first place.

I think it is rational to look at what and why actions were taken. Do you believe that the raise of the minimum wage at Amazon was out of good nature? Was it a decision to mitigate brand perception costs against labor costs after a bunch of national stories reported that they were paying so little in markets that their workers were forced to also take government subsidies while they have had their most profitable quarters ever? As far as the push to get the minimum wage raised -- is it not a reasonable view that it is in amazons best interest to further reduce the reoccurring labor costs effectively by ensuring their competitors are also forced to match their labor cost?

The bottom line is if Amazon (or any company for that matter) wants to treat their employees better than the minimum wage -- they were and still are able to do so. Amazon happened to be in a state where because of the publicity pressure (showing their full time employees unable to live on their wage) it was more cost effective to make a change than not.

Its also the fact that having tax payers subsidise your work force out side of the Cinderella professions (nurse doctor etc) doesn't go down well with tax payers.

Which is why a tory chancellor wanted a higher minimum wage - to cut the social security bill

>Do you believe that the raise of the minimum wage at Amazon was out of good nature?

Does it matter what the rationale was? I know if I was an Amazon minimum wage employee I could care less what the rationale was. I'd just be thrilled to be getting a pay raise. Where I live the minimum wage is only $11.25/hour. Getting a bump to $15 will be a big deal for those people.

>Does it matter what the rationale was?

If you're Amazon, yes, it matters a ridiculous amount.

The last thing you'll want is for people to realize that the union drives actually worked. That would mean more union drives and more pay rises on the horizon. Can't have that!

Count the number of mentions of the reason for their decision in their press releases:

https://press.aboutamazon.com/news-releases/news-release-det...

So did it matter what Ford's motivation was when he introduced the 40 hour work week? He didn't do it out of the kindness of his heart.

I don't think you can necessarily say that. He did have a business justification for the decisions, but he also expressed humanitarian reasons, such as the idea that leisure time should not be a privilege afforded only to the upper class. It turned out to work out well for his company, but would the business case have been strong enough to make him take the risk if he hadn't also thought the social consequences were good? Quite possibly not.

In a 1926 interview to a magazine, World's Work, Ford said: "Leisure is an indispensable ingredient in a growing consumer market because working people need to have enough free time to find uses for consumer products, including automobiles."

He wanted people to have free time so they could appreciate the stuff they buy. Capitalism at its finest.

Yes, he said that. He also said that leisure time shouldn't be a class privilege. He said both of those things. That was the entire point of my comment — he had a business justification, but he also expressed socially minded reasons for wanting to make the change. I see no reason why you'd only pay attention to the business reason. It was similar with other decisions he made that benefited employees — for example, he paid significantly above-market rates across the board because he wanted his workers to be happy, and he justified this in the business by saying that he believed these happy workers would be more productive and would hopefully want to buy the same cars they were making.

I think what you're saying is ... people like to have more money?

Personally, I'm willing to praise them for extending the fifteen dollar minimum wage to temps and contract employees.

That certainly bucks the trend and is praiseworthy.

Corporations do not deserve praise for doing the right thing. They are not people, with feelings, who respond to emotional stimuli in the form of positive reinforcement. They are businesses that respond to the market (indeed, their legal duty is to maximize profits). In markets, negative pressure works. Asking nicely does not.

> their legal duty is to maximize profits

I am not nit-picking, asking in good faith: is that enacted into a law ? Or is that part of a contract between shareholders and the board of executives ?

I have heard about that walmart competitor run like a family business and that gives every employees a voice (a cooperative ?).

there is such a thing as “fedicuary duty” [1] which could be sometimes interpreted as “maximize profits” i suppose...

according to this ny times article [2] it states:

`There is a common belief that corporate directors have a legal duty to maximize corporate profits and “shareholder value” — even if this means skirting ethical rules, damaging the environment or harming employees. But this belief is utterly false. To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”`

the ny times article also cites some sources such as supreme court case; it’s well worth a read

[1] https://www.sandiegobusinesslawyerblog.com/fiduciary-duties-...

[2] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

The hyperbole isn't helping the case.

It is true that companies are not required to "pursue profit at the expense of everything else".

But it is also true that companies are held to legal standards that "include acting to promote the value of the corporation for the benefit of its stockholders" (Ebay v Newmark). This was famously weaponized against Craigslist several years ago, who were successfully sued over their refusal to let shareholders change corporate culture.

It is neither. This seems to be a very common belief (i.e., that corporations are legally required to maximize returns for shareholders), but it is neither law nor regulation. Nothing prevents a company, even a publicly-traded one, from making decisions with other goals in mind, even if those decisions will reduce profits.

It's part of the contract for most standard corporations (that aren't B Corps) - the management has a duty to do what's best for the company, which usually comes out to "have a good reason behind doing something". If Amazon comes out tomorrow and says they're throwing in the towel and giving away their money to the Seattle poor because that will have a more positive impact, the lawsuits will be immediate and fairly one-sided. It would be a fairly easy case to argue that Amazon would be failing in their duty to shareholders by spending their money on something with no hope of an ROI.

Nonsense--there is no "legal duty to maximize profits". That concept isn't really meaningful: maximize over what term? In fact Amazon is probably the number one counter-example to that idea, they've never prioritized profits and have plowed everything they can back into infrastructure. There's also no "legal duty to pay employees as little as possible", nor "legal duty to fight unionization" nor a hundred other things that some corporations do against the interests of their employees. For publicly traded companies the only recourse shareholders have is to vote out the board if they don't think things are being run correctly, but there's no law that's defining what correctly is.

> there is no "legal duty to maximize profits".

For publicly traded companies, there is: https://www.litigationandtrial.com/2010/09/articles/series/s...

Again, no, and IMO the cited case (eBay v Craigslist founders) is again more of a counter example. From the court opinion:

> Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form. Those standards include acting to promote the value of the corporation for the benefit of its stockholders.

"Value" yes, but again says nothing about "profit". The court acknowledged different stockholders can and do have different and even conflicting definitions for value, and that a contract (not a law) should be used to resolve those differences. In the end the only thing that the judge ruled against were actions specifically designed to destroy the value of the company's stock by making it harder to buy and sell. He didn't order e.g. that Craigslist raise ad prices even though it's widely believed they hold a ton of pricing power and are deliberately avoiding maximizing profit because they prioritize community.

Don't mix common sense and internet.

Spot on. Continuous outrage syndrome is a real problem feed by the fact that outrage and self-righteous news sellls better than just the facts news.

If Amazon's private intentions match this public description, then what they are doing is very admirable. The problem is I get suspicious when power turns populist... there is oftentimes an agenda. (See: Trump, or US politics in general)

Genuinely curious what the /u/pulak thinks of this outcome:

https://www.theverge.com/2018/10/3/17934194/amazon-minimum-w...

Was our skepticism perhaps reasonable?

Cynicism and skepticism are different beasts with different outcomes. Skepticism asks "Did they do it for X reason? Let's investigate." Cynicism says "They can only have done it for X reason. Let's castigate."

Cynicism is lazy. And generally, it has the effect of disheartening anyone from even trying to do the right thing. That people are cynical is of course understandable, but it's nothing to strive for.

Let's suppose they were lobbying to reduce the minimum wage instead. They would receive a lot of well-deserved abuse. So it seems clear they're in a no-win situation. Beyond that, it's a truism that any company lobbying for any policy change is mainly operating out of self-interest.

The person is just pointing out a logical big-business reason behind the decision they are making. It is pretty likely that they did it for PR, and the lobbying will help that as well, even if it doesn't work. No one has to "suck it up and give praise where praise is due".

We do not owe Amazon a positive outlook.

You can both be right. It’s great that they made this move after much criticism, prodding and foot dragging, but... this reaction can also be calculated so that not only they have to carry this load alone but spread it to competitors. In other words AMZN is willing to do it, but they don’t want to be the only ones “burdened” unlike Costco who did it out of concern and perhaps principle (and competitive advantage by ensuring a more stable workforce) but less as part of manoeuvering.

Seems like a ridiculous risk to take given it is reliant on the US government that is unequivocally pro-business right now and will be until at least 2020.

Not so sure about that. Many businesses are upset at the import tariffs complaining it will affect them. We also have many labor unions cautiously optimistic about support ftom the current admin.

Let’s also not forget that while Repubs have traditionally been pro business, Dems, since the 80s have also got cozy with business and get humongous donations from corps —something which was not the case pre 1980s.

That's true, but with regards to the minimum wage, which is the topic we are on, republicans are typically against raising it.

> Let’s also not forget that while Repubs have traditionally been pro business, Dems, since the 80s have also got cozy with business and get humongous donations from corps —something which was not the case pre 1980s.

I don't intend to engage on "x is better than y." or whataboutism comparing political parties. It is simply a valid observation that republicans are more likely to be against raising the minimum wage, so it would follow that if Amazon is only doing this in the hopes that the government will raise it anyway and other companies would have to pay more, it would be an absurd risk to take.

The government says they're pro business, but Trump himself is quite anti-Amazon (well, at least anti-Bezos, which extends itself to being somewhat anti-Amazon).

Exactly this, and it's probably Amazon's real motive.

They did the exact same thing with sales taxes for online purchases: When they were up-and-coming they fought it. Once they had warehouses in the states where most of their business comes from, they supported legislation to force online sales tax since they had to do it already anyway.

Like others said though, at least this move will benefit workers.

I think you are assuming there is a conflict between Amazon's business interest and the interest of employees. Higher compensation is not done out of generosity, nor should it be. If it were it would be charity.

Higher compensation is done out of the desire to attract and retain better workers.

If Amazon started paying unemployed people or giving them gift cards to buy things on Amazon, then it would be charity.

"Wow, does the top comment always have to be cynical?"

The top comment is the most popular one.

Right, so put another way: "wow, why is cynicism so popular on HN?"

> does the top comment always have to be cynical?

It's easy to mistake cynicism for wisdom.

I think we should praise this move by Amazon, but also realize they're probably the world leader in warehouse robotics. If they raise wages, and push for wage increases now, there is a short term effect of reduced profits for Amazon, but it also puts pressure on raising costs for competitors while Amazon is on a path to being much better insulated from those costs. It also gives them better community relations basis when siting or expanding locations.

Is this cynical, or good move on the part of Amazon? A little of both. It is a smart long-term profit move for Amazon. But I would also say that overall would be great to spark a trend where companies compete via both smart capital investments to raise productivity, and being willing the share the benefit of rising productivity to employees as a tool against competitors.

Perhaps they raised minimum wages with the future goal to lay off staff that can be "robotized". After that the remaining workers would certainly have a higher load of dealing with the robots and would most likely not be willing to work for less than $15/h. This can also can earn amazon a good guy reputation so that their future move can be justified. I hope i'm wrong but my instinct tells me that Amazon will not loose a cent on this move.

Future staff that can be robotized would be laid off no matter what their pay. Or maybe I should say within a wide band of salaries as I doubt that 10-12 vs 15/hr makes much of a difference on that balance. But I don't think all workers would be eliminated within a warehouse, and I can't estimate if the remaining jobs will be higher load or lower load physically.

> Wow, does the top comment always have to be cynical?

Middlebrow dismissals are a hacker news staple.

http://www.byrnehobart.com/blog/why-are-middlebrow-dismissal...

Do oblique references to middlebrow dismissal count as middlebrow dismissal?

They're a homo internetus and ultimately a homo sapiens staple. Alas.

I -for one- applaud this example of cynical enlightened self interest.

Because no matter how cynical or self interested, there's still the enlightened part. Doing the right thing for the wrong reasons is still doing the right thing, fwiw.

If anything that is not enough cynicism. There is still the matter of work conditions.

Perhaps, if you'd look at it this way: Almost every article posted here speaks for the topic at hand. Many comments provide reasonable counterviews and create a sense of insight and nuance. This creates a sense of a somewhat balanced viewpoint about the topic. It's not that scoffers or only cynics here are upvoted. Sadly, cynicism often does seem to be the main emotion doing the rounds.

And also it will improve the quality cohort of the workforce they can target.

> This is exactly what everyone wanted Amazon to do

You really need to get out of your bubble.

A lot of us who understand economics genuinely think minimum wages hurt the poor, and think this can bring a lot of unemployment.

Please do not insinuate that those of us who support higher minimum wages do not understand economics. It's extremely uncivil.

You're not wrong, not neither is the op.

Timely since Bezos is going to run for President.

I don't understand the logic that Amazon is doing this for greed or their shareholders. Amazon is the leading company, the number one cost in a business is labor period, they don't have to be early adopters they can be last one in, their business models have nothing to do with service members interacting extensively with customers. So there is no benefit for first one in profile margin sense, they are making less money today then they were yesterday and will continue to do so, from a business standpoint they are working at a disadvantage against any competitors right now.

If they are doing it to look good that means they are doing because they value looking good in terms of ethics, if that is true then they are essentially acting in the right. They could have easily went to $9 or $10 to avoid government penalties.

Amazon has been facing extreme pressure to do this (strikes, political action), they did the right thing finally, but some cynicism is warranted. We can praise AND criticize — there's nothing wrong with that.

No what we want Amazon to do is pay a fair wage. Did they offset hourly wage with some other benefit making the total benefits the same? I'd really like to know where this extra money is coming from.

> they'll get to look progressive for adopting this wage early, while mitigating their competitive disadvantage by forcing every other company to raise their wages too eventually.

That's deeply cynical. In the process, they're actually paying real people more money. Which is sort of critically important if you care about this issue and not just taking pot shots at Amazon on HN.

If you critically care about this issue, the extent of which this is labor-driven vs PR-driven is crucial to the war in which $15/hour is just the first battle.

What do you mean by “labor-driven?”

I'm assuming it relates to the tight labor market giving workers the power to choose where they work at (as opposed to "this is the only job offer I have")

>I'm assuming it relates to the tight labor market giving workers the power to choose where they work at (as opposed to "this is the only job offer I have")

Lol no it's still not like that unless you have a high salary career, and most people don't have those.

If this is to be interpreted as evidence that the workers have bargaining power, it is only the first step in a progression of improving conditions (because now they're able to negotiate.) If it's just PR-driven serendipity then it might even be accompanied by worsening conditions elsewhere. This seems reasonable because people are a lot more reliable at fighting for their own interests than they are at considering the interests of others.

In the absence of a monopoly, those drivers are codependent.

> In the process, they're actually paying real people more money

Except the OP was talking specifically about the company's plan to lobby. Yes, they're actually paying people more money, but if everyone has that same amount of money then you get wage push inflation. Then everyone loses. This is also why minimum wage discussions always spiral out of control...there really is no good long term solution for setting minimum wages.

Unless you are Amazon and people get more spending money. Yes everything else will go up with minimum wage but not right away.

This isn't necessarily the case, as shown by countries like Australia with very high minimum wages.

Australia has a very high cost of living. Look at the cost of power.

the cost of power is a political mismanagement unrelated to our minimum wage

For context the Australian minimum wage is 12.94 USD and has the 12th highest cost of living in the world.

The minimum wage in Australia doesn't work the same way as it does in the US. Australian workers will under an award -- effectively a industry-specific contract negotiated by the respective union. An Amazon worker would likely be on the Storage Services and Wholesale Award.

This starts at $20.72 (14.92 USD) for fulltime, and $25.90 (18.64 USD) for casual work.

There's higher wages based on experience and responsibilities, as well as penalty rates. Public holiday pay starts at $56.98 (41.01 USD).

As someone who has recently moved from Melbourne to Boston; if anything I feel like Australia has a lower cost of living. According to the one source I found, prices including rent in Boston, MA are 36.53% higher than in Melbourne

https://www.fairwork.gov.au/ArticleDocuments/872/storage-ser...

https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

It's all relative. If minimum wage workers get their income doubled, but my income does not double, then they are doing better relative to me than they were before. And I do not expect my salary to double upon passing of such legislation.

That's a ridiculously cynical way to view it. First, utility does not scale linearly with income. Second, this allows for greater economic efficiency, because fewer people will be caught in bad situations with an insurmountable hurdle to get out.

If you want to maintain your relative wealth, feudal times are great. The rest of us would rather increase absolute wealth.

This comment appears to be misplaced.

All the previous poster is saying is that a minimum wage increase would not place that much upwards pressure on inflation, which is true.

In that case, I grossly misinterpreted the tone of the comment, and apologize for it.

I (and baldfast) had interpreted throwaway080383's comment as implying that he will be worse off from this legislation, as the increase in minimum wage will result in inflation, leading to no effective change in inflation-adjusted minimum wage, but a strong decrease in his own inflation-adjusted minimum wage. This is the standard conservative viewpoint that I've seen, which is repeated frequently, and is why I reacted so strongly to it.

Damn, yes I could see how my original comment would naturally be interpreted that way.

To be clear, what I meant to get across was that the wage increase was not going to be a no-op due to inflation or whatever; it will make those people's lives measurably better in the short-to-medium term because not everyone's wages will be doubled at the same time.

Yeah, technically, I will be slightly worse off in the short term because Amazon will cost a little more or my dollar will go slightly less far, but I'm perfectly fine with that if it means tens of thousands of families can now feed their kids or go to the hospital. In the long run, my hope is that those kids will be more productive/innovative, which is good for everyone.

> The rest of us would rather increase absolute wealth.

Some of us would be happy to just have enough money to do work we find productive for society, as opposed to what the market demands of us. Not everybody wants to ride the absolute wealth treadmill.

Are you saying your salary is based on keeping the working poor? OR are you saying you think corporations and their investors deserve a low wage workforce that the government will take care of with your tax dollars? I find no logical sense other then your mad that people can make money for WORKING.

When people make $15 an hour they will need less government assistance. This will take away from corporate's profits, which has gone through the roof without an salary bumps the last 40 years.

I don't think they are saying anything like that. I think they are saying that a minimum wage increase would bring the lowest earners closer to the higher earners, rather than causing inflation across the board. So that's a good thing if you care about wealth inequality.

Yes, to be clear, I think raising the minimum wage and decreasing wealth inequality is a good thing, even if it marginally negatively affects me in the short term.

I think inflation is just what people on the conservative economic side like to always throw out. Inflation is the new Bogeyman - https://www.bworldonline.com/inflation-become-bogeyman/

Edit: After submitting for 1 minute The number one weapon against doing anything to help the working poor is that it will cause inflation. It's a hollow baseless argument.

On hn you should always assume comments are in good faith and try to understand them from the best possible interpretation.

Well I am trying to see the best possible interpretation. What is the best possible interpretation.

I think the poster didn't think of what it meant besides what only affects himself. I have noticed that is where all discussion ends, but it really is implementing that his bottom line is negatively affected if the working poor get higher wages.

Of course a minimum wage increase pushes all wages up.

If you were working at Amazon for $15/hr before this change and the other guy was working at $12/hr, but now makes $15/hr, wouldn't you want a raise?

I'm saying it will not push my wages up. And that's a good thing.

It might not push your wage up by much, but it does create upward pressure on wages in general.

Fine with me… and I work for myself and make less than minimum wage.

But some of MY customers may end up more able to pay me. I have repeatedly seen a tight correlation betweeen how well I do, and labor share of the economy. If this is real then it'll benefit me, all the more so if it becomes a trend.

And why do you care? You're not doing worse than you were before.

> Then everyone loses.

Inflation certainly counteracts some of the wage growth, but it's a much stronger claim that it will result in a net lose.

Any evidence for that claim?

It might not be easy to come up with perfect equation for regulating the minimum wage.

Bumping the minimum wage by law seems like an arbitrary temporary fix, that will need to be adjusted in another 25 years.

But a temporary somewhat arbitrary fix, might be better than nothing. Don't let perfect get in the way of good enough for now.

The minimum wage argument is about tipping the scales of business wealth distribution away from seniority and the business and into the pockets of those lowest on the totem pole.

This balances the scale of products developed and resources spent more towards low income people and away from aristocratic goods and services.

However, in the case of Amazon, a company already very low on margins and on theory of low incomes, this would result in higher costs from the market behemoth

That's a radical theory; can you give a more detailed explanation? Mainstream economists and political theorists believe that raising minimum wage reduces wealth inequality which creates economic and political stability, which reduces the risk of things like crime, Great Depression, and violent revolution.

Even if minimum wage growth hits its practical max and creates inflation, (1) that's easy enough to detect and correct, (2) it's not a big deal if all the numbers go up together; the main loss is in reprinted menus.

> Mainstream economists and political theorists believe that raising minimum wage reduces wealth inequality which creates economic and political stability

There is nowhere near the level of consensus on this issue that you're implying.

That's incorrect. Mainstream economists are quite divided on whether minimum wage laws help the poor, let alone the other things you mentioned. See the Wikipedia article: https://en.wikipedia.org/wiki/Minimum_wage

> reduces wealth inequality which creates economic and political stability

> which reduces the risk of things like crime, Great Depression, and violent revolution.

Which has nothing to do with the point I made...

> (1) that's easy enough to detect and correct, (2) it's not a big deal if all the numbers go up together

Inflation is easy to detect and correct? Japan would like to have a word with you: https://en.wikipedia.org/wiki/Lost_Decade_(Japan)

Cynical isn't the right word for the problem in swebs reasoning. Of course Bezos is a villain. But if you get Amazon to do this, it's good for the country, regardless of motivation.

So remain cynical but recognize that good politics can lead to bad companies doing good things.

If Bezos is a villain, his millions of customers are accomplices. Have you tipped your Amazon warehouse worker recently?

Don't think that's how villainy, accomplices, or tips work.

I'm reluctant to say it's cynical because it's not necessarily negative or pessimistic so much as matter of fact. The Op isn't taking shots at Amazon by exposing their motivations.

A higher Minimum Wage is coming and possibly be a priority for Liberals and Progressives after the November Election. Amazon has been receiving a lot of negative press recently for labor conditions and wages. Regardless of the benefits to others, there is a direct benefit to Amazon.

Now if you want cynical... I think it's borderline delusional to think that a publicly traded multi-national corporation would do anything that isn't in it's business interest.

Exactly what Amazon did on "sales tax."

Against it, until their growth created a nexus in most states and required it.

Now they have been one of the most forceful lobbyists advocating for it. They call it, "Main Street Fairness."

Hot take: if you really want to take shots at Amazon, the best thing here is that their wage rates are going up, draining money from the General Bezos Evilness Pot and towards the employees, who can use it for things like unionization campaigns or pro-worker lobbying. If Amazon literally wants to spend its own money advocating for a shift of power from capital to labor via a minimum-wage rise or other improvements in workers' rights, well, I'm happy to see Jeff Bezos selling us the rope we'll hang him with.

$15 an hour will push a lot of people out of being employable. There is a greater tolerance for whom you will accept at current wage points. The other effect of a much higher starting wage is you will have people enter the market who did not think the wage was worth their time. The people who cannot be relied on to show up on schedule, quit and want to come back, have some issues in their credit or criminal backgrounds, and more.

Meaning more reliable candidates will come back in and those who dismissed fast food, warehouse, and retail, jobs as not paying enough will now accept those jobs. You will get some retirees, stay at homes, college kids, and even some recent graduates, coming in.

This sounds like good problem to have. Companies can pick from a larger pool and find better workers.

Well, I guess that's one way to put a positive spin on unemployment.

It's putting a positive spin on paying people a living wage. Unemployment goes up, support the unemployed with safety nets and raising taxes.

The problem is not the cost; the money exists in the economic system, clearly. It's simply an allocation issue.

But pessimists can keep carrying on with "the sky is falling" while progressive economic policies continue to march forward, bringing the US to parity with the living standards of other first world countries.

while progressive economic policies continue to march forward

March forward? If anything there has been a dismantling of "progressive" economic policies over the last few decades. To the benefit of the economy.

You must admit, this is a significant win for Sanders (Disney first, now Amazon). I agree with you that progressive policies have been dismantled over the last few decades, but would argue that the electorate is engaged enough now to claw back those losses (majority of Americans support universal healthcare now, for example).

My point was this is not the last win for Sanders and those who align with his progressive policies. Efforts will continue to drive up the minimum wage in all 50 states.

> The problem is not the cost; the money exists in the economic system, clearly. It's simply an allocation issue

Yeah I really agree with this statement a lot

The problem is that "better workers" is usually defined by most companies as "smallest possible salary".

Isn't that how consumers behave? A "good deal" is usually finding the product at the lowest cost possible..which is usually made possible by paying people the "smallest possible salary" the market can bear.

Consumers like you and I are responsible for this.

Well, it seems like you are conflating two very different issues, but anyway, that's not how I behave, personally. I buy more expensive products less often, provided that those are produced in a humane way (e.g. no sweat shops or animal cruelty involved).

A "better product", in my view, is radically different from a "cheaper/cheapest product". The same goes for professionals.

> $15 an hour will push a lot of people out of being employable.

Or maybe it will just force employers to pay better wages to those they employ already.

$7.50 / hour is what they pay kids here to stock grocery chains.

Or maybe it will increase unemployment and will increase the inflation. Why stop at $15? Let's make it $50/hr, make everyone "rich".

There is a difference between everybody being 'rich' and simply paying a living wage. Note how Ford got as big as it was in part not just because he made a damn good automobile but because he paid his employees a wage large enough that they could afford a car.

A couple of billionaires less and a higher standard of living for the masses is a good thing.

Define "living wage". Please be specific, no vague dancing around.

Living wage: a wage sufficiently high that after paying taxes there is still enough left over for small family or individual to live off when all normal expenses are accounted for based on a workweek no longer than 40 hours in total.

That works out to $2400 gross per month (so before taxes) which if you can't recoup it from the work input says more about the company you are working for and their inability to capture value. Keep in mind that raising the wage across the bar will increase inflation but will level the wage disparity between 'smart' work and 'dumb' work.

> small family or individual

What is it, then? Small family or individual?

(Edit: sorry for the annoyance. I just tried to understand how did you work out that the right number is $2400 with such precision. Surely that's the right number everywhere in the US, as well...)

What is a little bit of money for a small family - but still a living wage - is going to be a bit more for an individual. Some countries make up the difference by giving parents of children some money each month.

So that the employers do not have to take the family situation of the people they employ into account.

Np. As for the $2400, $15/hour * 40 * 4 is close enough, and that seems to work based on the salaries of a number of people that I am familiar with.

Working two jobs at $7/hour should not be a requirement to make ends meet. And that's another way in which the low minimum wage hurts employment: people working two shifts because they have to.

That definition is VERY vague. I asked you to be specific. How many people? What does "live off" include SPECIFICALLY? What are "normal expenses"?

I'm quite certain one can survive on zero dollars, so I assume you're talking about something else. But I don't get what.

The $2400 number is completely made up, it's not even geography-specific. It's a lot in Indiana suburbs and it's barely anything in SF.

You're shouting and I have a feeling that no matter what gets written here it will not satisfy you, so game over.

An actual answer would satisfy me. But I doubt it will be provided. That's the whole reason for using vague terms like "living wage".

I have given you a definition and a number that +- 20% satisfies all of the US demographic data that I have my disposal, if you're looking for an essay complete with citations you're going to have to line up behind the paying customers.

You started this thread in bad faith ('and no dancing around') and went to worse from there.

Would you please not argue aggressively like this on HN? It breaks the civility rule. Same for https://news.ycombinator.com/item?id=18121850. There's no need to be rude.

https://news.ycombinator.com/newsguidelines.html

Have you given any thought to how wide the gap between "smart" work and "dumb" work should be? Who should decide such a thing? If someone spent their youth doing drugs and having children out of wedlock do they really deserve to earn a salary within say 10% of someone that spent their youth working to gain the skills and experience necessary to be a doctor or lawyer? Just because the outcomes need to be more equal?

> Have you given any thought to how wide the gap between "smart" work and "dumb" work should be?

Large enough to stimulate people to learn, small enough that those working hard do not end up wearing out their bodies before their pension, end up on the streets or dead.

> If someone spent their youth doing drugs and having children out of wedlock do they really deserve to earn a salary within say 10% of someone that spent their youth working to gain the skills and experience necessary to be a doctor or lawyer?

Do you mean to imply that there are no doctors or lawyers with children out of wedlock or on drugs?

> Just because the outcomes need to be more equal?

I would avoid the word equal, I would use the word fair.

Your buying into the argument people who are poor deserve it some how. That's a similar argument used against the 8 hour day - the working classes would waste this extra new time on drink and enjoying themselves.

> Your buying into the argument people who are poor deserve it some how.

Not sure how you got that impression. If you thought that the 'large enough to stimulate people to learn' is a factor in that: I was thinking of kids looking around them seeing zero advantage of having an education might not be incentivized enough to acquire one.

Not your OP but...

In the UK there's a foundation that exists to work out what would a fair living wage, to promote this idea to businesses (getting them to commit to pay this to all workers even though the legal minimum is lower) and to make sure that when media people have your question they've got somebody who can confidently provide quotes/ appear on TV/ whatever to explain.

This was sufficiently successful that the government tried to rebrand their arbitrarily chosen (55% of median earnings) minimum wage as a "National Living Wage" but to their annoyance people continue to refer to the foundation's numbers which you know, are based on evidence.

The Living Wage Foundation uses a "basket" system like economists measuring inflation. For example they imagine that a person should rent somewhere to live, so they go find out how much it would typically cost to rent somewhere a person could live in various parts of the country. They figure you will want food, so they work out a set of groceries you might buy, and so on.

Is it possible to live on less? Yes, and it so happens that I do even though I'm fairly wealthy. But it's very obvious that even small changes in my lifestyle would significantly increase my spending, and many of my choices just aren't open to people who aren't wealthy. For example I spend very little on housing, because I own my home outright. But obviously people trying to get a minimum wage cleaning job don't own a house!

a living wage is the minimum a person needs to survive without severe and persistent food and housing insecurity.

It's the amount one would spend on groceries, rent, utilities, transportation, childcare, and sometimes healthcare.

It does not include luxuries such as meals at restaurants, entertainment, savings accounts, retirement funds, investments, or vacations.

MIT has a great living wage calculator for the US. Their definition of living wage is in the about section.

http://livingwage.mit.edu/

I see no reason this is going to cause fewer billionaires. Doesn't that assume it's all a zero sum game? Could you elaborate..

Probably it won't but there is a small risk that some people will due to round-off errors end up just below the billionaire line of they start paying their employees a half decent wage. Or it might take some people a bit longer to get there. In the long run it is irrelevant.

I know you're joking.

But it's not true that rising the minimum wage would immediately be cancelled out by inflation. That would be true only if everybody was earning minimum wage.

Increasing the minimum wage from 5 to 50 dollars is unlikely to cause a 10x inflation, it more likely would cause a 3x or 5x inflation.

The poor would have more and the rich would have less.

It would likely reduce the spread of wealth in the society, improve social cohesion and in general may turn out to be a good thing.

High minimum wage doesn't hurt the "rich" it hurts everyone who's making just more than minimum all the way to the upper middle class because their cost of living either increases or their standard of living decreases.

The "rich" are rich enough that it's just a drop in the bucket.

Edit: I don't mean to say that minimum wage isn't worthwhile, just that framing it in terms of a rich to poor wealth transfer is somewhat dishonest.

Well, if that reasoning were true we should just get rid of the minimum wage, surely that will lead to an increase in the standard of living and a decrease in the cost of living.

Really, some of the stuff you read on HN is just mind-boggling.

In spite of the gig economy trying hard to erase decades of stability for millions of people even the smallest attempt at reductio-ad-absurdum would show that there is an optimimum somewhere and that there is absolutely no law of nature that dictates that that optimum lies at $2.75, $7, $15 or anywhere in particular.

Whatever you make the minimum, there will always be people who earn just a bit more and of course it will lead to some inflation but the end result will be a higher standard of living for those for whom the change is the most important.

For all the laughter about the EU from the US when it comes to social security I'd like to point out that Amazon already operates here and has to pay the local minimum wage and that consumers are still buying their products.

Being part of the gig economy has brought me the best income I've ever had. And a flexible schedule so I get plenty of time with my kid. If I was still forced to look for a 9-5 based on traditional hiring practices I'd be making much less and miserable.

As long as it works... and then when you get ill or something else happens suddenly you find out that all that freedom translates into a complete lack of a safety net. Unless you live somewhere in Europe.

Keep in mind that 'flexible contracts' and 'zero hour contracts' already existed before the Gig economy, and that they still came with all the good stuff that comes with employment.

For the US, where a lot of people were already under the perpetual Sword of Damocles waiting to be told they are no longer required the situation is maybe not all that different. But not all of the world is like that.

The better way to run a life that is free and where you get plenty of time to arrange as you wish is to have a consultancy company where you hire yourself out at a high rate during a few months of the year to take it easy during the remainder.

a complete lack of a safety net

Nearly 2/3rd of the federal budget is for social programs. What do you mean a "complete lack of a safety net"?

Try applying for it when you really need it. Bankruptcy due to medical emergencies is unfortunately pretty common.

I've done my bit of social security for the United States all the way from where I'm sitting, it's that good.

> Nearly 2/3rd of the federal budget is for social programs.

Not all social programs are safety net programs; notably age- and work-related public healthcare isn't, and neither is work-qualified public pension.

And also a lot of the social spending (safety net or not) is the public portion of the US’s stupendously inefficient hybrid public/private health care system, so even the safety net portions of that (mainly Medicaid) give very little safety net for the money.

By the standards of the developed West, the US has a very weak safety net, however much money it might spend on public social programs.

Not all social programs are safety net programs; notably age- and work-related public healthcare isn't, and neither is work-qualified public pension.

Care to source that definition? Social-security, Medicare and Medicaid were all developed as "safety nets".

The optimum minimizes the amount of government assistance.

Obviously, everyone not being starved or dead from lack of medical care means everyone gets food and medical care. That is not negotiable at this time.

Some methods of payment for those universal services have extremely low transaction cost like the employer hands money to employee who buys the service or product for cash. Some methods have extremely expensive transaction costs with government departments taxing people and another department full of people paying partial or full payment for people's food and medical care, none of those people work for free and they all need HR and benefits and management and auditors, all very expensive. Of course give/force the employers to hand out too much cash and you get inflation that exceeds the cost of government.

For example everyone at Google eats and has medical care and having the well compensated employees pay for it is extremely low transaction cost. However no one at walmart can eat and obtain medical care so the government provides it at enormous transaction expense. Its believed to be better for the entire economy to slightly tax google employees to pay for government services for walmart employees than just have walmart pay their fair share of the expenses of employees.

At some point in the middle there's a optimum that minimizes the total cost of government programs plus the economic damage wrought by inflation. A lot of people put a lot of time and money into figuring out this optimal ratio, which is probably extremely close to where we are today, and many more in the general public say "eh we should just wing it and +1 one side or the other, because like, what could possibly go wrong?".

There ARE problems such that those highly paid government clerks with fabulous benefits compared to the private sector are not likely to suggest losing their welfare program administrator jobs any time soon, so there are rational human self interest reasons why the minwage is always going to be around the lower bound of optimum. If the general public is not always of the opinion that its somewhat on the low side, then the central regulators and planners are messing up. There should always be this low level of turmoil about it being somewhat too low.

We should indeed just get rid of the minimum wage, and replace it with universal basic income guarantee.

Minimum wage + unemployment insurance is basically UBI anyway, except very poorly implemented - with ridiculous overhead, and, most crucially, subsidized through what is, essentially, a regressive tax.

Consider: when you raise minimum wage, the employer will try to put as much as they can into the price of the produced goods. They might be forced to eat some of it by shrinking their profit margin, but ultimately most of it will be passed to the consumer.

Now, who consumes goods and services produced by minimum-wage workers? Everyone, of course - but, generally speaking, the less you earn, the more you have to rely on that. So as the prices on such goods and services go up, poor are the ones that see the biggest increases as a proportion of their overall spending (and hence, their overall income). It's the ultimate con - you get one mark to pay for the other, and the best part is that they don't even notice.

UBI wouldn't have this problem, because the tax would be explicit, applied to income, and (ideally) progressive. So you actually redistribute from the top of the ladder all the way down to the bottom. Better yet if you also tax capital gains for this purpose.

The rich will not have less, they will have a lot more (in dollars at least), because they are mostly storing wealth in inflation-proof assets. And businesses owners will make more than 10x, because when you increase the wages from $10/hr to $50/hr, the amount of spare (fun) money actually grows much more than 5x.

That will hurt the current middle class the most, those earning close to $50/hr. These are skilled professionals who will get equalized with someone who dropped out of high school. It's actually a good example of why socialism is such a dumb idea.

> Increasing the minimum wage from 5 to 50 dollars is unlikely to cause a 10x inflation, it more likely would cause a 3x or 5x inflation.

I' guessing it would rather create massive unemployment, and subsequently be cancelled. Think about it - middle-class people are ok with paying $4 for their Starbucks coffee, but if they were to pay say $10 (because the baristas salaries just tripled), probably a lot of them would cut back on them. Maybe even Starbucks would disappear altogether. Multiply that effect across all industries hiring minimum-wage workers. It would be a train wreck.

Most of Starbuck's cost doesn't come from paying baristas. It comes from coffee, real estate, utilities, and corporate.

Here's some real world evidence:

https://www.washington.edu/news/2016/04/18/early-analysis-of...

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5615576/

https://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies

I think the point is that many people aren’t worth $15/hour. Having a well-stocked grocery store is worth $15/hour if the person doing the job is fast. But slower stockers may lose their jobs altogether.

Most companies I’ve worked at have had mailrooms. Very few have had people actually working in them. Which tells me that when the buildings were designed, the mailroom was considered valuable enough to include in the floor plan, but before I was hired, it stopped being valuable enough to staff. It’s worth something, but many companies apparently think it isn’t worth $7.25/hour.

I can think of tons of jobs that are worth less than $1/hr. That doesn't mean I think people should actually do those jobs. Over time we tend to get more-valuable jobs.

Or you know, email and that internet thing got pretty big.

I recently read Fischer Black’s book Exploring General Equilibrium. I’m sure I’d seen the argument before, but one passage that stuck out was the discussion on how something can lose all value when technological advances make it obsolete. It is true that’s partly to blame.

But those companies still send and receive a lot of paper and packages. It’s just that there isn’t any staff dedicated to doing the sending and receiving; instead it’s included in everyone’s job description.

Yes, as encompassed in "it stopped being valuable enough to staff."

> I think the point is that many people aren’t worth $15/hour.

Who cares? If markets are allowed to compete freely, unskilled labor rates trend towards zero. Most of the people currently working at $7.50 probably would be paid even less if the law didn't forbid it now.

We live in a capitalist society where people are expected to work for a living. Saying that someone doesn't deserve to be paid a living wage is the same as saying they don't deserve to live.

> Saying that someone doesn't deserve to be paid a living wage is the same as saying they don't deserve to live.

I’m not saying anything about what anyone deserves.

I happen to know a general contractor who is incredibly charitable and willing to hire just about anyone who can swing a hammer. He mentioned that one year, he hired so many people that the per-employee costs and taxes ate all of the company’s profit. He had to live on savings that year. Obviously that isn’t sustainable, even if many independent coffee shops and bookstores try it.

Companies that pay more for labor than the value they get from that labor go out of business the same as companies that sell items at a loss and try to make it up on volume.

I wish I could still edit my comment. Instead I have to revise and extend.

I think there’s a disconnect between the phrase “what someone deserves” and “what someone is worth [to a company].” Yes, because you are human, you have intrinsic value and can even claim you deserve certain things. Whether there’s some cosmic guarantee that you will get what you deserve is beside my point.

But your value to a company as their employee can be given a measurable number. It probably has more to do with my age than with the job itself, but I actually enjoyed the minimum wage jobs that I took when I was younger. Even today, when I see a “help wanted” sign at the kind of place I would have worked as a teenager or young adult, I reminisce about those jobs. But I never apply, because my value to them has a hard limit: they aren’t going to pay me more than the market price to keep the store clean, count back change, and provide good customer service. I’m not significantly better at those jobs than the average teenager. My knowledge of C++, C#, web services, databases, UI design, etc. has no value to them, although it has value to many other companies. I would never expect them to pay me more than my value to them.

I’m happy that Amazon has changed its pay scales. But this change will involve laying off people who are profitable at, say, $8/hour or $10/hour but not $15/hour. That’s how the world works. Today, those employees can find other jobs at $8/hour or $10/hour. They may even get a raise. But if minimum wage is increased to $15/hour, they could find themselves priced out of the market.

Or maybe they won't employ humans at all because robots will be able to stock the shelves and flip burgers for <$15/hr. At least sooner than they'll be able to for <$7/hr.

Also some jobs will just go away, like grocery baggers (mostly) did. Which customers liked and was a good entry level job for teenagers.

There are a lot of factors to consider and have to be careful about unintended consequences.

> $15 an hour will push a lot of people out of being employable.

On the other hand, isn't it illogical in a free market economy that wages do not increase at a rate at least equal to the inflation? How do you keep the economy running if people have less and less purchase power as time goes by? (These are genuine questions, I'm not an economist at all.)

I think the answer is that full employment is increasingly not necessary to keep the economy running in this increasingly automated economy.

But how come low wages do not impact negatively the domestic consumption, which is an important part of the GDP?

Have you not seen the explosion of consumer debt over the past decades? Buying power is now tied to how much a bank is willing to lend you, not how much you have in your savings accounts. Synchrony, who Amazon partners with to offer their store card, will give basically anybody with a pulse a $500 credit line and ramp them up to thousands fairly quickly as long as they don't default.

I don't even want to get into the real debt traps targeted at the least fortunate among us like payday/title loans, buy-here-pay-here car dealerships, etc.

With increased income disparity, the top can make up for the bottom on domestic consumption metrics.

Some of the answers are that technology makes things cheaper, people feel wealth from house prices rising faster than wages, easy access to cheap credit gives another more temporary feeling of wealth

It's not illogical at all. Wages and inflation are not dependent on each other. Inflation means money supply is growing faster than productivity, but it doesn't mean wage-earners are getting that extra money. Banks and capitalists might be.

Uh... yes. Let's replace "illogical" by "irrational" in my first question, then. :-)

I got mine vs an infinitely sustainable long term stable system, is not really an economic problem its a cross cultural human problem for as far back as we have records (or archeology, it seems).

So, no, the economy not being on a survivable path is not really all that unusual of a situation for humanity in general. You'd be amazed what extracting and burning or otherwise disposing of an impossible to replace resource can do to boost a declining economy. "cheap oil" or "cheap fertilizer" masks a lot of problems... for awhile...

How do you keep the economy running as purchase power goes down? Traditionally, I don't think you can.

Henry Ford was one of the people to point this out; in the general case, you need to pay your workers enough (and keep prices low enough) that they can afford your products; else who can? (other threads have quoted him as well )

Note that one of the reasons the great depression was so bad was people underestimated the income elasticity of demand. This especially showed up in car manufacturing, where new car sales were almost entirely replaced by the used and repair markets.

> $15 an hour will push a lot of people out of being employable. There is a greater tolerance for whom you will accept at current wage points.

I don't believe that. People aren't going to dig the ditches and flip the burgers themselves just because it costs them a few $ per hour more now. These people aren't taking part in "charity" jobs that will dissapear if the wages go up, they're still going to stack shelves, they're just going to do it for more $.

Additionally, paying people an actual livable wage I'd suggest makes it more likely they will be reliable. When you're not juggling poverty related health problems with more jobs than it's sensible to have I'd suggest you will perform better at whatever job you do.

> The other effect of a much higher starting wage is you will have people enter the market who did not think the wage was worth their time. The people who cannot be relied on to show up on schedule, quit and want to come back, have some issues in their credit or criminal backgrounds, and more.

I'm not sure I follow you there. It seems that you're saying that there's a band of workers that are unreliable (credit/crimial issues) that are just waiting for wages to go up before they jump into the labor pool, but that the lower paid workers don't have these problems?

> Meaning more reliable candidates will come back in and those who dismissed fast food, warehouse, and retail, jobs as not paying enough will now accept those jobs. You will get some retirees, stay at homes, college kids, and even some recent graduates, coming in.

This seems to contradict what you said in the last paragraph so I might have misunderstood something somewhere. Regardless, I doubt there's a pool of workers who are well enough off that they don't have to currently work who on discovering that the lowest paid jobs in the country now pay a bit more will suddenly want to start work.

A national $15/hour minimum wage isn't going to fly in places like small town Kentucky or West Virginia. Those places don't have good jobs anymore, and the only businesses left are a drive-thru and a Dollar General. They can barely afford a dozen or so people working at minimum wage now, and they can't run a place with half the employees. Their customers can barely afford to shop there and can't take paying more to cover it. The only reasonable option in this scenario is to close.

Dollar General and other national chain drive thru eateries are substantially profitable (profits in the billions of dollars, DG margins are ~%30). The odds of Dollar General, McDonalds, and company and closing up in rural America is so close to zero, for our purposes we can round down to zero.

They might raise prices a bit, and be slightly less profitable to shareholders, but they won't close up shop.

I was thinking more along the lines of a local mom and pop drive thru where people get their daily 6 pack and lottery ticket than a McDonalds.

Then mom and pop will need to work their store, instead of underpaying employees.

Does this not mean those employees are out of work? Benefit some lucky workers with increased wages, while driving others out of work entirely?

We're talking about doubling the national minimum wage. That's a hefty increase, especially for areas where cost of living is quite a bit different than say, California.

One of the biggest Amazon distribution warehouses in the country happens to be in Lexington, KY. I’m sure this $15 / hour wage increase is going to go over very well there. I’m from Lexington, KY originally but live in Chicago now (since there aren’t local jobs for Linux Software Engineers)

Lexington, Kentucky is the 60th-largest city in the United States. That is not the "small town Kentucky" that the grandparent is talking about. (S)he is talking about small businesses (or business franchises, like Dollar General) that are barely scraping by in small towns -- a gas station, a diner, a dollar store -- typically with a only 1-3 employees working at a time. A place like that would take a substantial hit from a doubling of the minimum wage.

Don't get me wrong -- workers are grossly underpaid in most of the US, and wage gains are good. But those wage gains do have to be relative. In NYC/SF, a $15 minimum wage is just enough to scrape by with a couple of 20-30 hour a week jobs. In a poorer part of the US, a $10 min wage is plenty... but anything more might be enough to kill what few businesses currently survive there.

Fair enough, but Dollar General is doing just fine: https://qz.com/1120552/the-retail-apocalypse-isnt-just-amazo...

The small mom and pop stores have been closing at record paces due to things like Walmart and Amazon. A higher minimum wage might speed that up, but it just moves things faster in the direction they've been moving for decades already.

The thing that blows my mind is what the federal government (by the definition of the IRS) considers the poverty level is based on the cost of food plus inflation, while entirely negating the cost of living. Minimum wage is made based on the poverty level, but the poverty level is wildly inaccurate due to not taking into account housing.

Couldn't agree more. It's also silly that there's a federal poverty level at all -- I see a poverty level as only useful on a scale as granular as county/parish, even state level is probably too large to give any useful data (for reference, I grew up in Northern New York State and now live in NYC, and any New York State poverty level is meaningless in both of those places because they're so disparate). It's a shame that the GOP, which is supposedly anti-federal power consolidation, no longer embraces that ideal. We would likely be better served here in the US by something more akin to a confederacy.

On the subject of Dollar General: I imagine the corporation as a whole is profitable, but I'm curious about their franchisees. If it's something like the McDonald's setup, then I imagine that their franchisees could be seriously hurting while the name Dollar General remains lucrative. Unfortunately I don't know much about their structure -- maybe they don't have franchises?

A federal minimum wage as a "line that you have to meet or beat" seems sensible enough to me for states that want to screw people. That said, it should definitely be per state and even per-city, as you've mentioned. I was just pointing out the severe problem with the current system and how it is really doing a disservice to those underprivileged citizens.

Why not take this a step further and understand that their customer base will have more money to spend in those stores with a higher minimum wage?

I get that it's inconvenient for everyone in town to get up and leave, but once a region is no longer economically productive, it's the only thing that makes sense.

... and it increases the ROI of investing in automation and robots.

I think this is a calculated move against Walmart.

Amazon could easily survive in a $15 minimum wage environment, but it'd be a much larger blow to Walmart (which employs many times more low wage workers), which would have to increase prices or reduce profitability.

"Your margin is my opportunity" - Jeff Bezos. This quote also works when thinking about raising your competitors' expenses.

This is disastrous for low skilled workers. It removes the bottom rung of the economic ladder -- if you have no skills or little skills, the best way to develop skills is to be employed. If you don't provide more than 15$ per hour of value then you won't be able to get a job.

This also helps create a moat around amazon - if they can get the costs of everyone to go up, when they unleash better picking/warehouse automation no one will be able to compete with them.

I don't think that's how employment pools work.

Sure, there's an element of "this job is only worth $7.5/hour, so if we have to pay someone $15/hour we won't do it", but I'd suggest that those jobs are actually not that common.

I'd instead suggest that most jobs need doing, and they will just cost more. Ditches still need digging, burgers still need flipping, and it will just cost a bit more now.

You don't need to speculate. There is a research that shows it does hurt lower skill workers : http://www.nber.org/papers/w12663.pdf

That's an interesting read, in summary it seems that rises in the minimum wage have a small negative impact, mostly for low paid young people.

That makes sense, there's going to be jobs that just aren't profitable when the wages go up. If I can make $4 on a box of shleem, and the kid who packs the shleem's wages go up $5 I have to pack the shleem myself, or stop selling it.

One thing that the report mentioned, and is maybe a possible cause of this negative increase, was that kids will leave school sooner when the minimum wage is higher. Perhaps to counter the issue there could be some sort of means-tested grant system to help keep kids in school?

Lots of interesting things happen when you play with price. Sometimes its higher-paying workers that benefit the most: if you can handle data management manually at 7.5U$S you hire cheap labor. If it costs 15U$S you hire an engineer to make a permanent and scalable solution.

I am not enamored by the concept of minimum wage, and to this day its a fight among economists.

The minimum wage has exactly the same effect on labor as the carbon tax has on the energy industry. There are winners and there are losers. But generally, when the government decides, there is deadweight loss in efficiency.

That may be their target, but they probably think it's unlikely and when they end up actually getting $10/hr instead, they'll still be able to call it a win.

Similarly, my kids don't get credit for "doing the right thing" only when I'm about to storm into the room to lecture them on whatever they were doing wrong.

Amazon knows most of that $15/hour will be paid into Amazon - regardless of employer - as they have 51% of American commerce. They're turning America into a huge company town.

I think that is a bit of an exaggeration. Housing, utilities, groceries, insurance, transportation, education; all major areas where Amazon has zero or negligible presence. eCommerce is not a major family budget item for most households.

They don't have anywhere near close to 51% of American commerce.

* Total US Retail sales in 2018: ~$5.4 Trillion

* Amazon trailing 12 months revenue as of June 30, 2018: $208B.

This is a little less than 4% (and that's assuming all Amazon revenue is US-based and retail sales, rather than AWS or other...)

You may be thinking of share of growth of US eCommerce.

Raising the minimum wage to what they know they can afford looks more like an anti competitive manuever than a PR move. That would be a massive strain on most large retail chains.

Which is how the system should work. Raising wages puts you at a cost disadvantage against competitors, but if all employers take collective action they only have to pay more for wages (rather than lose market share). That's why the early American robber barons lobbied for government regulation of child labor at times - they wanted to be able to abandon it without giving opponents an advantage.

But if it lowers unemployment because people that are worth less than 15U$S/hour cant get a job, you just created a poverty machine.

$14... gotta look competitive.

If you take "increase to the minimum wage of $7.25" literally, it'd be $14.50

I'm confused, because it seems to me that your tone implies that it's something bad or unethical on their part.

If I'm mistaken - I'm sorry that I've misunderstand you. But I do think that I'm not alone in this, and that a clarification for tone-defa people like me would be welcome.

If I'm not mistaken, and you indeed imply this, can you elaborate further on why do you think so?

The problem is that minimum wage shouldn't be the end of the conversation. With an increase with minimum wage, rent and other costs will go up to match whatever pressure people will as near as sustainable without collapse as possible (indirect costs going up of course), along with other for-profit layers providing for basic necessities also increasing their prices.

People at the bottom of the wage scale getting a few bucks more an hour will not drive up costs. The additional demand is spread across categories of goods. You also assume that businesses are incapable of increasing production (or improving production efficiency) to handle moderate increases in demand.

Of course it does. It's known when there's more money made available (e.g. student loans) then cost goes up (e.g. education tuition).

If Amazon should be paying $15/hour, why should other companies not also pay that much? They are literally doing exactly what was asked of them. Do you not want the same for employees of other companies?

I can understand that its fair to be cynical of their motivations, but they are doing exactly what people have been demanding of them.

You seem to be saying that you think Amazon's lobbyists will advocate for Congress picking $15, though the article quoted them as saying they'd defer to Congress.

Did you not get the same thing out of Amazon's words, or are you saying that they're not telling the truth and will push for $15 despite saying otherwise?

It's to their advantage to do this on their clock, so I agree. If they push this through, they'll be much more prepared than any of their competitors.

US ±100 years ago: "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life." ( https://en.wikipedia.org/wiki/History_of_United_States_antit... )

Feels like AMZN is becoming a political power, a king of production, transporation and sale... Is it too big ?

Any risk Trump answers with a New Deal à la Roosevelt ?

Amazon is good at getting ahead of the political winds. They started collecting sales tax just before it would have become a legal requirement.

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