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Comment by maym86 | Hacker News Reader

Jeff Bezos in the announcement. “We’re excited about this change and encourage our competitors and other large employers to join us"

Is this an attempt to pressure its competition with less money in the bank to do the same, loby for a higher minimum wage and drive them out of business?

Maybe it's a reaction to the union organizing taking place a whole foods and they think this will be cheaper in the long run.

I don't buy the "automation is just around the corner so we can afford to raise wages for a smaller workforce" argument I've seen here because that remains the same even if they kept the wages at the same level.

Happy with the result but I'm curious what the motives are. Bezos wouldn't do this unless he saw a benefit for the business or his hand was being forced somehow.

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He is going to lay off all of the employees through automation. You can have $150 an hour for warehouse employees as a minimum wage if there is only one of them.

Why would he bother raising wages then? No need for him to raise wages to do that. He isn't doing it for the sake of it. There is some other incentive involved. Automation happens either way and they have been gradually doing it for years without raising wages significantly.

To stop a union from being formed. Unions often institute work rules that contractually forbid automation.

Doesn't automation eliminate the need for negotiating with a union?

Only if you can automate everything at once

> Doesn't automation eliminate the need for negotiating with a union?

Not if the union literally forbids you from introducing automation in the first place. This is how the Transit Workers Union prevents the MTA from using technology that's been standard across the industry for decades.

An alternate strategy is to require the employer to pay the union when new technology is introduced. This drives up the cost of technology to the point where it costs more money than simply hiring the manual labor, thereby preserving the union jobs (at the cost of the taxpayers, in the case of the MTA).

Could you share some reading material about your MTA example? I've never heard that before.

> Trade unions, which have closely aligned themselves with Gov. Andrew M. Cuomo and other politicians, have secured deals requiring underground construction work to be staffed by as many as four times more laborers than elsewhere in the world, documents show.

> The critics pointed to several unusual provisions in the labor agreements. One part of Local 147’s deal entitles the union to $450,000 for each tunnel-boring machine used. That is to make up for job losses from “technological advancement,” even though the equipment has been standard for decades.

...and so forth. https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...

The TL;DR is that the L (and soon 7) line is automated with something called "communication-based train control". They still have an operator and conductor on every train, even though the train is perfectly capable of driving itself and making station announcements itself.

I think the MTA thought they could kill off the conductor's position when the trains were fully automated, because the operator could take on the conductor's role now that they don't have to actually operate the train. The union did not allow that.

In the end, this is not really the MTA's biggest problem. CBTC was supposed to increase capacity on the L, but it didn't in reality because the MTA doesn't own enough rolling stock to actually offer that capacity, and the terminals on the L don't allow them to turn trains quickly enough to make the signalling system the bottleneck. (The 7 will be better, though, as at least the Hudson Yards terminal has tail tracks that allow the trains to enter the terminal at full speed. The same cannot be said of 8th Ave. on the L, where trains have to crawl into the terminal because the track ends a few feet after the end of the platform.)

> CBTC was supposed to increase capacity on the L

This is not strictly true. CBTC was put on the L first since, at the time of procurement in 2004, it was an ideal testbed as a moderate-ridership, fairly long line isolated from the rest of the system.

It was not immediately obvious that the L would become the center of gentrification in the late 2000s and 2010s; in the '70s and '80s it had such low ridership that they were proposing its closure. So they only ordered enough train cars to meet the 2004 ridership demand.

Why did MTA agree to it? They were involved in writing and bargaining the contract too.

I doubt a private sector union at Amazon would have the power to get such a deal.

One thing that comes to mind is the union saying that clause is a dealbreaker, and being willing to strike unless it's included.

In New York, public-sector unions are not allowed to strike; instead both parties are forced into binding arbitration. https://en.wikipedia.org/wiki/Taylor_Law

According to an arbitration decision in 2010, it sounds like the MTA strategically withdrew an OPTO clause specifically to get less hammered by labor on other issues during arbitration: https://www.scribd.com/doc/18552062/The-M-T-A-and-T-W-U-Arbi...

This would be bargained between management and the union and is not automatic. Maybe it's a threat but not necessarily an issue Amazon would face even with the formation of a union if this is something Amazon really wanted to keep out of a contract.

At the end of the day both the company and the workers/union have to agree on the terms and people may not be willing to strike over this single issue if the rest of the deal was good.

There are plenty of other reasons for Amazon to want to prevent a union from forming including increased pay, benefits and time off but a union's ability to prevent automation may not be huge issue as Amazon is still growing and hiring workers faster than the jobs are being automated.

He's making too much in nominal profit and needs to put money somewhere productive. Today, that place is his workers' wages.

Uh, good publicity? A cheap way to wash off his name? (the attitudes I see about him in Seattle are surprising, even to me, even after being here a while). A great way to buy good publicity before steadily reducing your workforce through automation over the next decades as is surely the plan?

Bezos has shown few, if any, signs of altruism and the one instance I can think of would be roughly the monetary equivalent of me giving a homeless person a penny.

http://www.coyoteblog.com/coyote_blog/2018/10/amazons-15-min...

Summary: the raise in Amazon's wages isn't just something that happened. It's part of a lobbying push for a higher legal minimum wage. Amazon's outsized profits-per-employee, compared to other retailers, mean that raising the minimum wage will hammer competitors.

"Bezos wouldn't do this unless he saw a benefit for the business or his hand was being forced somehow."

I don't like this type of knee-jerk suspicion towards people running corporations. Don't forget that they have conscience too, and can make decisions for the better or for the worse. In fact, by not giving credit where credit is due, you disincentivize them from trying to do good things.

Yes, business people need to make hard decisions to stay competitive, and yes, they have an obligation to their investors to make a profit. But these investors are people as well and might be proud of owning the stock if the company makes positive decisions. Further, if there's a certain amount of leeway that is afforded a very successful company to do something like this, but still stay competitive, then capitalism doesn't force that person's hand.

I'm sure the full fallout of such a policy has been considered and it wasn't made impulsively. But immediately dismissing altruism as a partial motive is unfair and sets a bad precedent.

I don't think it's a "knee-jerk" suspicion. It's from experience and knowledge that companies don't generally behave altruistically. Amazon historically has not acted altruistically. There is a considered business reason for this and I was trying to understand it. Suggesting that they likely have a strategic reason is in no way "knee-jerk".

We've seen that its easier to act altruistically once you're a billionaire. I think there can be an element of that - but why lobby to force other companies to do the same?

If you think that conditions in your group would be substantially better off if everyone in the group did a certain thing, you're likely to both do that thing and advocate that others in your group do that thing.

Pretty sure it was in response to Bernie Sander's BEZOS bill

Even if it is motivated by an attempt to gain competitive advantage, it's still a good thing. If the competition can't find labor at less than $15 an hour, then they'll either go out of business or start offering competitive pay. It's an example of capitalism working both for business and employees.

Agreed. Capitalizm works best when the incentives are not all in one direction. It appears in this case some other incentives are at play be they looking for good PR, the threat of workers organizing or government regulation. It helps when the workers have some leverage on their side.

So once competition is gone what happens?

Regulate or break up the monopoly if they abuse their monopoly power.

The monopoly exists because competition cannot begin because of minimum wage, so how is that an abuse of power? You couldn't argue that in court to regulate it.

Being a monopoly isn't the problem. It's when monopoly power is abused that the government steps in.

So my original question was. Once the competition is gone... what happens? This a government regulation problem not a monopoly problem.

What happens? Are you asking what the government would do if Amazon gains a monopoly and abuses that power?

If so, there are lots of possibilities, including the break of Amazon into baby-Amazons like AT&T in 1984 or Standard Oil in 1911. They could install overseers like they did when Microsoft was found guilty of abusing their monopoly. It wouldn't be an unprecedented situation.

You’re missing the point. If a monopoly is created because of government regulation and no competition can thrive because of government policy. There is no monopoly abuse. It’s just how it is because the government screwed up.

So what was different with AT&T? You couldn't just create a phone company and compete with AT&T. They had franchise agreements with cities and exclusive rights for space on telephone poles.

They were still found to be an abusive monopoly even though their monopoly was created by government regulation.

It's like the complement of flooding the market with cheap goods. You can similarly hog up some resource that your competitors also need, driving up its price. E.g. labor. Force competitors to sell cheap, and/or pay more for inputs.

Totally a response to Bernie Sanders campaign against Amazon, and impending unionization.

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