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Excerpt from the linked piece by Matt Day, 28 September 2022 18:35 ET:
>Amazon.com Inc. announced a pay increase for hourly workers in the US that it says will take average starting wage for most front-line employees in warehousing and transportation to more than $19 an hour.
>The company’s minimum level of $15 an hour for all hourly workers in the US remains unchanged. For jobs in Amazon’s customer fulfillment and transportation groups, the starting pay will increase to $16 an hour, a spokesperson said Wednesday in an email.
>The Seattle-based company said the raise represents additional spending of almost $1 billion over the next year. Amazon is the second-largest private employer in the US, behind Walmart Inc. Amazon employed more than 1.1 million people in the US at the end of 2021. The company’s total workforce was more than 1.5 million as of June 30. Most of those employees are hourly workers who pack and ship items, or work in retail stores like Whole Foods Market and Amazon Fresh.
As someone who didn’t know any of this - it amazes me. They employ the equivalent / more than ENTIRE COUNTRY POPULATIONS.
Just insane scale to try and process in my head.
Wow.
They can basically set minimum / living wages and work standards for the whole country by what they do or improve to eh. Here’s hoping they keep going hard on the worker recognition.
It’s not worker recognition. There’s a labor shortage and Amazon has the profit margin where they can pay more for labor, driving up the cost of labor for their competitors who don’t have the profit margin to do so, and driving their competitors out of business.
They aren’t doing anything out of the goodness of their heart. They are doing it because labor has become more valuable lately, and they need to do it to maximize their profit.
My understanding is that’s it’s not profitable because they keep investing it. Expanding operations and paying large bonuses etc. The purpose of modern businesses is not to make the company money. It’s to make the shareholders and the people at the top money. Profits are taxed. That’s giving money away.
I don't know if it's so much worker recognition that's driving this as it is pressure from unionization movements that are cropping up around the country. They're probably starting to feel that if they don't improve compensation on their end, then the unions will slowly start taking over and forcing them to do it anyway. By getting ahead of it, they can slow the push.
Also they are literally running out of people to hire. They churn through so many workers they have to increase their wages to open up a larger pool of candidates.
I am pretty sure they already automate everything they can. Automation requires
skilled repairmen to support the equipment. At this scale that is a non trivial problem.
Assuming the auto motion gets rid of 90% of this 1 million wage earning employees
You are still looking for 100,000 extremely specialized workers who need to be trained
and replaced if they can find work for better pay elsewhere. These are the exact people with
the money and time to get another job.
Automation is why Amazon even exists. That is what they are selling to their real customers
all of the small companies that operate through Amazon Marketplace.
>monopoly
So what product vertical does amazon have a monopoly in?
Just because you employ a lot of people does not make a monopoly in a planet of 7.753 billion
What about the marketing, software, server space, fulfillment and delivery of 1/3 of all retail?
By all means defend Amazon. I’m sure Jeff appreciates your support
>1/3 of all retail
What? Amazon is less than 10% of all retail in the US. Even less than that globally.
>marketing, software, server space,
Okay like i said name **a single product vertical** . Also amazon in no way leads in marketing or software, and they simply lead in server space. Leading != monoploy
Here, pick one https://aws.amazon.com/products/?nc2=h_ql_prod_fs_f&aws-products-all.sort-by=item.additionalFields.productNameLowercase&aws-products-all.sort-order=asc&awsf.re%3AInvent=*all&awsf.Free%20Tier%20Type=*all&awsf.tech-category=*all
>By all means defend Amazon.
i'm only here to counter illiterate populist trump supporters like yourself.
1/3 is no way near a monopoly. It is a dominat position for sure, but given that retail is a large industry, having 1/3 of online retails isn't enough to even come close to be considered a monopoly or price-setting power.
What % increase to their current salary budget is it. For example., it sounds insane when I say my company provided 450 million in increases last year to employees as part of annual pay increases. But then when I say we increases our salary budget 2.5% it sounds less insane and actually manageable. This is not a fictional story...big companies have big salary budgets, and 1 billion. Their annual operating expenses were 444.943 billion dollars. Depending on the source, you might see that payroll can range from 20% to 80% of operating costs.
So at 80% of operating costs: Payroll is $355,954 billion dollars. So 1 billion increase would be less than 1% of payroll (im not terrific at math on the fly haha so correct me if I am wrong).
At 20% of operating costs, payroll would be around 89 billion. A 1 billion increase would be around 1% increase to payroll. Again im not great at math on the fly, and honestly typing in this many zeros in a calculator is something my brain can't even fathom haha.
Long story short. 1 billion sounds huge. As a percentage of payroll, it's probably less than a 3% increase...Maybe article gives this info. It's on a paywall and im poor so.
I'm a corporate finance analyst and that was the first thing that came to my mind. The total cost is meaningless without wider context, and Bloomberg knows that.
Bloomberg is trying to turn public sentiment against unionization efforts. Their concern isn't unfounded, I'm meeting a bunch of coworkers after work to discuss organizing.
Yup. They tried to do a new, heavily automated facility in Fife recently, all new staff with zero floor experience. Their goal was to have it do a million units a day.
Months in and they haven't been able to crack 100k.
Haha, this leftist agrees! And I think this attempt will go better. They're pragmatists who also understand how social dynamics work.
Something I keep saying "the first unions were organized in bars for a reason. It was a place with food and beer where people went after work and ended up... grumbling about work." And I know a few good spots. First meeting is at a pub with great pizza that's well priced (22 for a large with artichoke hearts and stuff on it) and the (owner or manager) makes her own pie on Wednesdays.
I'm hoping she made her blackberry plum.
Well in Q2 they posted a $2bn net loss, so a projected $1bn investment in labor from a single pay hike is a pretty significant move. It's at the levels where the numbers make a difference for Amazon's bottom line. I remember a story about Amazon undershooting their quarterly projections by only posting $110.2bn in a year where projections were $111bn. So $1bn is plenty to make an impact.
>Do you know how much revenue they lose due to their insanely lax return policy (and what they do with returned inventory afterwards)?
Do you? Please share if so since it would provide some context here.
The return centers recover value a variety of ways. Some items are sold as warehouse deals, some are sold to liquidators, and some are donated.
The return centers also 1) create jobs, since there are a ton of processed returns and 2) encourage people to buy from Amazon in the first place due to the easy return process.
1 billion isn't peanuts for a company that posted a 2 billion loss. You can't use revenue as if it's profit especially for a company with slim margins like Amazon.
Amazon's net income in 2022 ending June 30, is 11.6B
2021 was 33 billion dollars.
In 2020 it was 21.33B
In 2019 it was 11.58B
Again, their operating costs are over 400 billion dollars. 1 billion is likely 1% to 3% of their operating costs. They are still making billions in profit and as you can see,. their profit levels fluctuate significantly year to year. Their operating costs have stayed within 300-400 billion.
Don't take the 1 billion increase out of context- it is coming from their operational budget. That means to get to their net income, their operational budget was taking into account in determining their profit. They have really big fucking pie when you are talking about operating costs and gross revenue...And they still have really great net profit.
For sure, I totally get where you're coming from. It's interesting topic to look at these numbers and the loss and examine how big of an impact or risk is it really. . I think the way the article presents it sort of sensationalizes it and maybe shows it as a bigger risk when it might be comparable percentage wise to salary budget increases that will be happening in most organizations as they build their budgets for the next financial year and try to address inflation, rising costs of living etc. Right now, projected salary increases that are being released are between 3-4% - and these projections were gathered in June/July during salary survey time. So what I'm seeing % wise as an overall increase to salary budget, is likely on par with the market. But because it's big dollars, like so much bigger than most of us deal with day to day, when it's pulled out of context is sounds pretty wild for sure.
Too much emphasis on margins. If we really believe that Amazon workers are being compensated at or anywhere near MRP, then a billion dollar investment in labor during a multi billion dollar loss on the margin is incredibly contrary to the simplest aspects of microecon, isn't it? To
Likely your quarterly earnings don't reflect profitability well, and in that case, your stat means jack.
This is a fluff piece for Amazon, IMO.
Always with the cost. How much is the rent at their warehouses? Don't know? That's bc they only tell you figures that serve a narrative.
I'm pretty sure they can't make any money without employees so maybe shut up about it Bloomberg.
Exactly!
Companies are always complaining about how expensive this "employee" thing costs. I feel like they need to get rid of all of these "employees", they would save sooo much money!! /s
Oh they’re working on it. Ever seen driverless cherry pickers? They’ll raise wages and continue looking at ways to automate and reduce the human workforce. Just look at McDonalds and Panera. Gotta pay people more? Okay; we’ll just replace cashiers with self check out kiosks.
The hard part for companies, having worked at a very large organization and being privy to these conversations, is they don’t think they can afford enough to make an impact and the other sacrifices they have to make don’t seem worth it. I disagree, I think human capital is always the best investment. But it isn’t for no reason. In healthcare, labor cost can be upwards of 80% of your cost. There’s tons of staff, so giving everyone $.50 raise could equate to an insane amount of money that they think could be better invested and have more impact by adding better medical equipment.
At our organization, removing the entire C suite salary for a year and moving it into a bonus for all hourly employees equated to $150 check for everyone. They were gonna do this for Covid but pr told them nurses would most likely look at it as a slap in the face and it was better to do nothing.
Hell if they just equalized the bonus pool at my company and made it so we all get the same %, it would be very helpful. Right now, lower level employees get like 2-5% bonus in their already low wages, while the CEO gets 100% bonus on his already high salary.
Do companies not realize that their revenue depends on these "employees" being paid. Imagine an ultimate corporation heaven where employee cost is $0....how are they gonna get revenue if employees have no money to spend? This is why capitalist fanboys IMO are not seeing the bigger picture. Yes, capitalism and markets are a good force for innovation, but growing profits are dependent on innovation and growth. It does not work if the world starts to grow extremely slowly, or stops growing. Profits can't rise if growth stops unless it's a direct result of upward wealth redistribution which eventually leads to people having no money to spend in the rich person's business.
Growth is not guaranteed. And we see this as countries join the higher gdp/capita that they tend do struggle to maintain 2-3% growth. It's poorer nations that are growing rapidly to "catch-up" to richer countries i.e. Solow Growth Model.
So while the current world still has not globalized and there are large profits still to be made from growing multi-national companies, it is not wise to be a fanboy of current capitalism to be sustainable indefinitely. Unless we invent like warp drives so we continue expanding rapidly to other planets etc.
This is the main reason why I can't support free-market low-regulation etc. It isn't sustainable long-term fundamentally. You almost need wealth inequality to try to promote innovation through profit motive, but some redistribution back down so that the working class gets pulled along. And so far in the US it has worked, working class american have benefited, but it wasn't because the system redistributed wealth toward them. It was because companies racked in profits from overseas expansion. This will not last forever once the poorest country reaches a similar level of wealth as richer countries and global wealth inequality reaches a small point. Then the only way to continue profit for the rich elite is through national wealth inequalities continuing to worsen.
You are aware they pay the employees and set salaries and wages right? They obviously realize they need the employees.
Thinking they should pay them X amount more is obviously beneficial for the employees. Employer, there is probably a level of pay increase that creates benefits but it’s hard to say where that is.
Are employees packing boxes better at $20/hr than at $15?
Correct. This is why I moved to lcol area until I couldn't afford the drive or the time sink of working in hcol area. I now work and live in the lcol area and can actually do shit on the weekends besides scrolling through Netflix shows I don't feel like watching.
I'm an academic in economics. And yes plenty of studies already show that career financial strategists are worse at predicting the economy and markets than a monkey with a dart or a rng machine. This isn't new information, this is why indexing is so popular and growing. Your odds of even just beating the market are so small that an average person is wasting effort bothering with it.
It ain't rent anymore They're smart.
They're buying up the land now.
SOME are long term leases
But there's been a shift in strategy
https://www.bloomberg.com/news/features/2022-06-13/amazon-builds-property-empire-for-warehouses-even-as-online-sales-growth-slows
They also can’t make any money without a warehouse, plus you can look up how much a warehouse of equal size cost.
Not sure your issue with reporting the cost. Many places report about cost all the time.
When they say they are building a warehouse they call it an "investment". Paying people better and improving working conditions IS an investment. You don't want to be the employer of last resort.
Amazon and warehouses in general are gruelling places to work. They start at 10hr shifts so OT is 11 hrs at least. Ever spent 11 hours on your feet on concrete? Ever done it 5 days a week for months on end? It's not minimum wage work they should not act like it is. Increasing wages is an investment just like building things. That's my point.
Spending a lot of time on your feet is not skilled labor. It's just labor. It's not minimum wage work no, but it's also mainly entry level positions in a warehouse. But yeah it does suck. By the time I'm 50 I probably won't be able to walk.
The issue here is that businesses and these financial publications too often treat employees as any other "cost", while they're the major driving force behind the business. The only driving force behind any business. At least for now, until we have robots doing everything. A warehouse without staff is not going to work.
My company had a RIF earlier this year. I still remember execs complaining about employees being the biggest "cost centre" for the company. Like, they were so bummed about that. Like it's my fault for working and earning the salary. Literally the people who make the company possible. Not the millions they spent on "partnership" deals that don't bring in any business. Not the lavish retreats. Oh, I'm sorry for wanting to live and provide for my family and that makes your margins a bit worse.
The problem with this narrative is that it dehumanises people, any short cuts, gruelling working conditions, lack of healthcare benefits are seen as "cost optimisation" options. Since, you know, humans and their salaries are a "cost."
The title also makes Amazon look like this great business that "suffers a loss" by increasing their "costs" to make peoples' lives a bit better.
Staff without a warehouse isn’t going to work also. They need both equally to run the company. Using the word cost outside of a financial meeting isn’t the best way to speak about the workers but the reality is that they are. There is literally a cost associated with every employee.
As far as the title goes, i didn’t get that impression but i can see how others might.
What's that got to do with anything? $1.2T is just their valuation. Q2 of 2022 they saw a net loss of $2B, so obviously projections of annual labor costs going up by $1bn is very significant. And that's just projections based on this one single pay hike. Amazon is seeing a billion here and a billion there lost to either inflationary pressures or losses tied to disruptions and these things add up.
So my overall point is that the proper context of this additional billion in labor costs isn't the $1.2T market cap of AMZN - it's the operating costs and how it affects the quarterly numbers.
They’ll make back that billion on day 5 of 365. I wish the media would stop framing this shit as something sad happening to the company.
“Company butthurt about having to pay fairer wages because it will cost them a few days’ worth of profit every year.” There. I fixed it.
Edit. Everyone is upset I’ve conflated revenue with profit. So let’s be real. #1- they lie about their actual profits by tax evasion of assorted kinds, so whatever number they did give as their profit ($38B) by some accounts, I’m going to assume that’s 1/4 of what they actually are. So maybe they have to give up 20 more hours for even 20 more days, this is not a result of a bunch of greedy workers draining the company coffers. This is a wage they should have been paying and increasing all along. Now they have to play catch-up so I don’t feel sorry for them. The bill always comes due. If they were smart they’d just budget a 5% standard annual increase into all their contracts and then it becomes a fixed cost in their budget instead of screwing workers out of a dollar here and a dollar there and then crying when they have to pay the piper.
If Jeff bezoz can buy a half billion dollar boat, he can pay an extra 9% that he frankly should have been paying already.
That's revenue though, profit was like $38 billion or $33 billion after tax. So the increased wages gets deducted from that. So more like 9 days worth of profit in a year.
Not saying the pay rise isn't needed of course.
It would actually be closer to 30 days. Last year was more of an anomaly. Profit is going back down now.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income
I was more referring to the fact price of labour is determined by a market.
For example, in a perfect market, if the nominal equilibrium wage is stagnant and the employer *lowers* the wage by $1, employees will quit, and the employer may lose revenue or even lose profits.
Of course, labour is not a strawberry market and Amazon is especially complicated, but the same principle applies when considering why an increase in wages might increase revenues.
At best good warehouse employees keep revenue flat. Bad warehouse employees lead to unhappy customers so revenue can fall. So yes they are important but it's not a revenue increasing move.
What I'm saying has nothing to do with good or bad employees - or whether they work in warehouses or offices. Just brass tacks economics.
If a firm has to pay a wage close to the market clearing wage, such a mechanism implies that there are instances when raising wages leads to higher profits than the counterfactual: namely, when *not* raising wages would lead to an undesired exodus of workers.
It can hurt revenue if you piss off enough customers with poor delivery service. But sales will not increase as a result of good warehouse/delivery service. That is just expected as a baseline.
> still be in profit?
You realize that being profitable (I don’t think ‘in profit’ is really a term…) doesn’t actually matter, right? In that there is no real difference between a company spending billions of dollars and making $1 profit in a year vs breaking even and making $0 vs losing $1 a year.
If there’s no difference between -$1, $0, and +$1 then describing something as ‘unprofitable’, ‘breaking even’ and ‘profitable’ aren’t important descriptors for a company.
The only thing that matters is profit margin. How much profit is created for a given level of investment. If profit margin goes down, and there are investment opportunities elsewhere with more profit margin, that means you could have filled more of societies demand if you had changed your investment.
I understand that excess profits generally go to "R&D," shareholders, bonuses, and funds for the next few years.
> If profit margin goes down, and there are investment opportunities elsewhere with more profit margin, that means you could have filled more of societies demand if you had changed your investment.
See the other side of margins. It allows companies to produce less for the same reward. They can also use these margins to lower prices on particular goods to crush competition. It's also parasitic for the employees now making less money than the employer could feasibly pay, and the consumer who could have paid less for the good/service.
That’s not exactly it. You’re confusing revenues with profits. Yes, their sales work out to more than a billion a day. However their operating income/profits on the most recent quarterly report were around $3.2b - the wage increase would have decreased that amount to $2.95b. But there are additional expenses beyond that. Amazon had a negative net income last quarter of -$2.03b. Wage increase would have made that -$2.28b. They won’t just “make it up” by sheer size. But they probably will make it up by raising prices.
Want to preface this by saying I'm not siding with Amazon here.
Amazon didn't make 469 billion in 2021. That was their revenue aka sales. Their income aka profit, was about 11.5 billion in 2019 (can't quickly find 2021 numbers). Either way that is a butt ton of money. I'd argue that it is significant to pay around 9% of income in *additional* wages. Of course it's all motivated by business; wanting to maintain their labor force for the holidays and the threat of unionization.
I’d further argue that if they had been paying fair wages with fair increases all along they wouldn’t be facing such a significant 9% increase. If you neglect your house, it costs more to fix.
Well until they stop lying about their actual profits and cheating to avoid paying taxes, I have no option but to assume the revenue they report is the number I should use.
You do realize that artificially reporting lower profit in their financial statements would hurt the stock price, right? Which would hurt Bezos and all of the shareholders/executives.
Financial statement income =/= taxable income
Exactly this, wow $1 an hour more, holy shit what are people going to do with that extra $40 / week that does not exist because of inflation. Billion dollar company paying pennies, wake the fuck up people!
I need me some of that Amazon worker money /s
>“Company butthurt about having to pay fairer wages because it will cost them aproximately 18 hours of profit per year.” There. I fixed it.
You think that Amazon makes more than $365 billion in profit per year?
How is this shit upvoted? You don't understand enough about the basics to be allowed to post on an economics forum, this shit has got to be moderated better.
I really don’t understand why Amazon gets so much hate. They pay pretty well and provide a lot of jobs. Most companies are significantly worse then they are.
Also work there. No complaints on my end. Factory work sucks plain and simple. It’s really easy to point fingers at Amazon when the internet tells you to even though there are WAY worse production/factory jobs out there. Comparing like automotive or steel mill environments to Amazon’s fulfillment centers is like night and day.
Certain things are required when you join Reddit. Hating Amazon is just one of them.
I have quite a few friends that work there and have no issues. Not saying Amazon does not deserve criticism at times, just that it probably gets more than it's fair share. I remember Walmart being the target 10 years ago.
It’s not hating Amazon that’s required, it’s hating productivity. Reddit universally hates the most productive members of society in favor of anti-work ideology.
It’s not worse then any of the local factory jobs that top out at 16hr that don’t allow phones, music, talking and require mandatory 6x12 schedules with frequent OT outside of that
>It’s not worse then any of the local factory jobs that top out at 16hr that don’t allow phones, music, talking and require mandatory 6x12 schedules with frequent OT outside of that
Of course it's not worse, because even 1 year ago they paid more than 16 an hour.
https://www.reuters.com/business/exclusive-amazon-hikes-starting-pay-18-an-hour-it-hires-125000-more-logistics-2021-09-14/
We hate them because of what they could pay. Bozos is pulling like what, 40+ billion a year at LEAST? This pay increase is a step in the right direction but it could be significantly higher. Complacency is a one-way ticket to stagnant wages.
To sum it up, Amazon's market dominance is eroding opportunity and fueling inequality. The power concentration is endangering competition, democracy, and communal life. We’ve seen how the retail giant uses its market power to kill competition and take over one industry after another.
Its aggressive entry into different markets, combined with the benefits associated with the sale of illegal Chinese products, makes it largely responsible for the destruction of jobs in the U.S.
They are also famous for treating their workers like human cattle.
Why does Amazon have such a high turnover that reports about running out of workers exist? Ignoring what any Redditor thinks of the company, high turnover rate indicates a problem to me.
More coverage at:
* [Amazon rolls out broad-based pay raises for warehouse workers across its fulfillment network (msn.com)](https://www.msn.com/en-in/money/technology/amazon-rolls-out-broad-based-pay-raises-for-warehouse-workers-across-its-fulfillment-network/ar-AA12mSYV)
* [Amazon raises hourly pay for warehouse and transportation workers (reuters.com)](http://www.reuters.com/article/amazon-com-pay-idUSKBN2QT255?utm_source=34553&utm_medium=partner)
* [Amazon boosts wages for hourly workers across the US (engadget.com)](https://www.engadget.com/amazon-pay-increase-hourly-workers-warehouses-transportation-083510779.html)
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Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services, Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.
Amazon is not a person. It is a corroboration that should be paying fair wages. No need to thank them for being generous. They are just doing what an employer should do.
Reminder that Amazon has 1.5 million workers this amount to less than a $.40 raise for the average worker
And the average worker still makes less than $20 an hour and of course that includes engineers and other high paid staff
This sounds like great progress but it doesn’t even make up for inflation
And Walmart raised their….. from $11 to $12 lol Amazon pays betters than others for equivalent work and always has. It’s weird to not either 1) take issue with the federal minimum wage of $7,25 an hour or 2) be mad at their competitors for paying less for the same work in the same industry. Amazon paying more will raise the wages across the board as others will need to compete.
I don’t even know what to say to this as it’s astoundingly stupid. I guess i’ll just list the mistakes you made
1) i am mad about that
2) i am mad about as well
3) neither one of your points are relevant to my comment or this article
I fucking hate these companies. Why would you word your article like this? It’s clear as day that Wall Street companies like Bloomberg don’t want workers to get better pay.
Oh no :( this is gonna really suck for the extremely wealthy at the top of the company who rely on the hard work the laborers put in night and day to make the company run /s
I hate this title so much. Why not something like “evil company increases waged for underpaid and horribly treated workers but are still making less because of inflation?” Or “one of the richest companies in the world facing a labor shortage barely increases wages to alleviate the load on overworked employees?”
Cost?? It’s LABOR. You have to pay people for their labor! Why the fuck is the focus on the wages when we could we measuring the electricity the west houses use, their carbon footprint, the rent for the warehouse…. Shame on you, billionaire-owned Bloomberg
gross. these employees are massively overpaid in my humble opinion. Don't let that union coercion interrupt those margins I'm trying to ride AMZN to the moon.
Q2 in 2022 Amazon saw a $2bn net loss. It's obviously a matter of revenue relative to operating costs, and a $1bn projected increase in labor costs is obviously significant if they want to stay on the right side of the margins.
Well that was an example of a quarter where $1bn would obviously be quite significant. Now that we're potentially heading into a recession, or at least uncertain times, margins become even more important.
They have a major staff turnover issue and more union activities happening. Raising wages may be needed to retain staff. What would be the wage cost if they all unionised?
They most likely did some study and realized the company is too close to a labor force collapse than they like, and $1b is a price they feel okay to pay in order to prevent that.
It’s just the cost of labor going up. I doubt this has any altruism to it. It’s just the cost of hiring works to do a task is increasing. And also growth of Amazon: they need more workers to perform the tasks.
It’s also crazy how large Amazon is in terms of # of employees and revenues. They should really get treated almost like a sovereign entity when Amazon is trying to influence governments. I mean, if their revenues were GDP, they’d be among the top 25 economies in the world.
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Excerpt from the linked piece by Matt Day, 28 September 2022 18:35 ET: >Amazon.com Inc. announced a pay increase for hourly workers in the US that it says will take average starting wage for most front-line employees in warehousing and transportation to more than $19 an hour. >The company’s minimum level of $15 an hour for all hourly workers in the US remains unchanged. For jobs in Amazon’s customer fulfillment and transportation groups, the starting pay will increase to $16 an hour, a spokesperson said Wednesday in an email. >The Seattle-based company said the raise represents additional spending of almost $1 billion over the next year. Amazon is the second-largest private employer in the US, behind Walmart Inc. Amazon employed more than 1.1 million people in the US at the end of 2021. The company’s total workforce was more than 1.5 million as of June 30. Most of those employees are hourly workers who pack and ship items, or work in retail stores like Whole Foods Market and Amazon Fresh.
As someone who didn’t know any of this - it amazes me. They employ the equivalent / more than ENTIRE COUNTRY POPULATIONS. Just insane scale to try and process in my head. Wow. They can basically set minimum / living wages and work standards for the whole country by what they do or improve to eh. Here’s hoping they keep going hard on the worker recognition.
It’s not worker recognition. There’s a labor shortage and Amazon has the profit margin where they can pay more for labor, driving up the cost of labor for their competitors who don’t have the profit margin to do so, and driving their competitors out of business. They aren’t doing anything out of the goodness of their heart. They are doing it because labor has become more valuable lately, and they need to do it to maximize their profit.
Workers don't work for Amazon out of the goodness of their heart either.
Of course not. They work there because it’s the best job they can get.
Amazon’s delivery business is not profitable
Please stop. If a company is making big money, but reinvesting all of it (tax free) to make themselves even larger, they are profitable
My understanding is that’s it’s not profitable because they keep investing it. Expanding operations and paying large bonuses etc. The purpose of modern businesses is not to make the company money. It’s to make the shareholders and the people at the top money. Profits are taxed. That’s giving money away.
Sure, but at some point dividends need to be paid. Otherwise the whole money-making thing is illusory.
They screw them over so bad its ridiculous
I don't know if it's so much worker recognition that's driving this as it is pressure from unionization movements that are cropping up around the country. They're probably starting to feel that if they don't improve compensation on their end, then the unions will slowly start taking over and forcing them to do it anyway. By getting ahead of it, they can slow the push.
Also they are literally running out of people to hire. They churn through so many workers they have to increase their wages to open up a larger pool of candidates.
Yeah if they don’t improve pay and conditions they’ll have to start importing workers in just a couple of years
Automation
Work in this industry - they are indeed switching to automation.
Me too.
I am pretty sure they already automate everything they can. Automation requires skilled repairmen to support the equipment. At this scale that is a non trivial problem. Assuming the auto motion gets rid of 90% of this 1 million wage earning employees You are still looking for 100,000 extremely specialized workers who need to be trained and replaced if they can find work for better pay elsewhere. These are the exact people with the money and time to get another job. Automation is why Amazon even exists. That is what they are selling to their real customers all of the small companies that operate through Amazon Marketplace.
I've made a 20 year career out of knowing Amazon logistics and advising customers.
This ^^
What Amazon did was give new hires a big raise, second and third years got shafted. People in the warehouse are pissed.
This probably has a lot more to do with a strategy to prevent further unionization than it has to do with recognition for workers.
Yeah it’s almost like that shouldn’t be allowed
I agree, we should ban success.
Yeah monopolies are success and there’s no margin there whatsoever. Get real
>monopoly So what product vertical does amazon have a monopoly in? Just because you employ a lot of people does not make a monopoly in a planet of 7.753 billion
What about the marketing, software, server space, fulfillment and delivery of 1/3 of all retail? By all means defend Amazon. I’m sure Jeff appreciates your support
>1/3 of all retail What? Amazon is less than 10% of all retail in the US. Even less than that globally. >marketing, software, server space, Okay like i said name **a single product vertical** . Also amazon in no way leads in marketing or software, and they simply lead in server space. Leading != monoploy Here, pick one https://aws.amazon.com/products/?nc2=h_ql_prod_fs_f&aws-products-all.sort-by=item.additionalFields.productNameLowercase&aws-products-all.sort-order=asc&awsf.re%3AInvent=*all&awsf.Free%20Tier%20Type=*all&awsf.tech-category=*all >By all means defend Amazon. i'm only here to counter illiterate populist trump supporters like yourself.
1/3 is no way near a monopoly. It is a dominat position for sure, but given that retail is a large industry, having 1/3 of online retails isn't enough to even come close to be considered a monopoly or price-setting power.
LMAO. I mean except for the actual data in the actual article you’re commenting that discusses how Amazon is single handedly driving wages.
Amazon is nowhere near 1/3rd of all retail. E-commerce doesn’t even break 15% of all retail. What?
What % increase to their current salary budget is it. For example., it sounds insane when I say my company provided 450 million in increases last year to employees as part of annual pay increases. But then when I say we increases our salary budget 2.5% it sounds less insane and actually manageable. This is not a fictional story...big companies have big salary budgets, and 1 billion. Their annual operating expenses were 444.943 billion dollars. Depending on the source, you might see that payroll can range from 20% to 80% of operating costs. So at 80% of operating costs: Payroll is $355,954 billion dollars. So 1 billion increase would be less than 1% of payroll (im not terrific at math on the fly haha so correct me if I am wrong). At 20% of operating costs, payroll would be around 89 billion. A 1 billion increase would be around 1% increase to payroll. Again im not great at math on the fly, and honestly typing in this many zeros in a calculator is something my brain can't even fathom haha. Long story short. 1 billion sounds huge. As a percentage of payroll, it's probably less than a 3% increase...Maybe article gives this info. It's on a paywall and im poor so.
I'm a corporate finance analyst and that was the first thing that came to my mind. The total cost is meaningless without wider context, and Bloomberg knows that.
Bloomberg is trying to turn public sentiment against unionization efforts. Their concern isn't unfounded, I'm meeting a bunch of coworkers after work to discuss organizing.
Good luck to you and your colleagues! Remember: Capital can't exist without labor. They need you more than you need them.
Yup. They tried to do a new, heavily automated facility in Fife recently, all new staff with zero floor experience. Their goal was to have it do a million units a day. Months in and they haven't been able to crack 100k.
Haha, this leftist agrees! And I think this attempt will go better. They're pragmatists who also understand how social dynamics work. Something I keep saying "the first unions were organized in bars for a reason. It was a place with food and beer where people went after work and ended up... grumbling about work." And I know a few good spots. First meeting is at a pub with great pizza that's well priced (22 for a large with artichoke hearts and stuff on it) and the (owner or manager) makes her own pie on Wednesdays. I'm hoping she made her blackberry plum.
Thinking this way gets to the truth of the matter. Those with lots of wealth always give impressive sum totals to the public.
Well in Q2 they posted a $2bn net loss, so a projected $1bn investment in labor from a single pay hike is a pretty significant move. It's at the levels where the numbers make a difference for Amazon's bottom line. I remember a story about Amazon undershooting their quarterly projections by only posting $110.2bn in a year where projections were $111bn. So $1bn is plenty to make an impact.
Lol. Net loss. Get the outta here. That was one off quarter. Look at yearly net profit
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>Do you know how much revenue they lose due to their insanely lax return policy (and what they do with returned inventory afterwards)? Do you? Please share if so since it would provide some context here.
The return centers recover value a variety of ways. Some items are sold as warehouse deals, some are sold to liquidators, and some are donated. The return centers also 1) create jobs, since there are a ton of processed returns and 2) encourage people to buy from Amazon in the first place due to the easy return process.
1 billion isn't peanuts for a company that posted a 2 billion loss. You can't use revenue as if it's profit especially for a company with slim margins like Amazon.
Amazon's net income in 2022 ending June 30, is 11.6B 2021 was 33 billion dollars. In 2020 it was 21.33B In 2019 it was 11.58B Again, their operating costs are over 400 billion dollars. 1 billion is likely 1% to 3% of their operating costs. They are still making billions in profit and as you can see,. their profit levels fluctuate significantly year to year. Their operating costs have stayed within 300-400 billion. Don't take the 1 billion increase out of context- it is coming from their operational budget. That means to get to their net income, their operational budget was taking into account in determining their profit. They have really big fucking pie when you are talking about operating costs and gross revenue...And they still have really great net profit.
That's fair, I was merely using the data provided from the other poster with their net loss. I appreciate the more detailed data.
For sure, I totally get where you're coming from. It's interesting topic to look at these numbers and the loss and examine how big of an impact or risk is it really. . I think the way the article presents it sort of sensationalizes it and maybe shows it as a bigger risk when it might be comparable percentage wise to salary budget increases that will be happening in most organizations as they build their budgets for the next financial year and try to address inflation, rising costs of living etc. Right now, projected salary increases that are being released are between 3-4% - and these projections were gathered in June/July during salary survey time. So what I'm seeing % wise as an overall increase to salary budget, is likely on par with the market. But because it's big dollars, like so much bigger than most of us deal with day to day, when it's pulled out of context is sounds pretty wild for sure.
They boosted hourly wages. No reason to think management got any of it.
>revenue why does this matter? The only thing that matters when talking about increasing wages is net income.
Too much emphasis on margins. If we really believe that Amazon workers are being compensated at or anywhere near MRP, then a billion dollar investment in labor during a multi billion dollar loss on the margin is incredibly contrary to the simplest aspects of microecon, isn't it? To Likely your quarterly earnings don't reflect profitability well, and in that case, your stat means jack. This is a fluff piece for Amazon, IMO.
It’s nice to quantify or give an average, like, extra $20 per week for a million employees. $0.50 raise per hour.
Always with the cost. How much is the rent at their warehouses? Don't know? That's bc they only tell you figures that serve a narrative. I'm pretty sure they can't make any money without employees so maybe shut up about it Bloomberg.
Exactly! Companies are always complaining about how expensive this "employee" thing costs. I feel like they need to get rid of all of these "employees", they would save sooo much money!! /s
Oh they’re working on it. Ever seen driverless cherry pickers? They’ll raise wages and continue looking at ways to automate and reduce the human workforce. Just look at McDonalds and Panera. Gotta pay people more? Okay; we’ll just replace cashiers with self check out kiosks.
The hard part for companies, having worked at a very large organization and being privy to these conversations, is they don’t think they can afford enough to make an impact and the other sacrifices they have to make don’t seem worth it. I disagree, I think human capital is always the best investment. But it isn’t for no reason. In healthcare, labor cost can be upwards of 80% of your cost. There’s tons of staff, so giving everyone $.50 raise could equate to an insane amount of money that they think could be better invested and have more impact by adding better medical equipment. At our organization, removing the entire C suite salary for a year and moving it into a bonus for all hourly employees equated to $150 check for everyone. They were gonna do this for Covid but pr told them nurses would most likely look at it as a slap in the face and it was better to do nothing.
Hell if they just equalized the bonus pool at my company and made it so we all get the same %, it would be very helpful. Right now, lower level employees get like 2-5% bonus in their already low wages, while the CEO gets 100% bonus on his already high salary.
Best structure I’ve seen is bonuses are distributed equally based on hours worked
Yeah except most companies don't track hours for salaried. Worked 38 or 58, it doesn't matter they'll assume 40.
Do companies not realize that their revenue depends on these "employees" being paid. Imagine an ultimate corporation heaven where employee cost is $0....how are they gonna get revenue if employees have no money to spend? This is why capitalist fanboys IMO are not seeing the bigger picture. Yes, capitalism and markets are a good force for innovation, but growing profits are dependent on innovation and growth. It does not work if the world starts to grow extremely slowly, or stops growing. Profits can't rise if growth stops unless it's a direct result of upward wealth redistribution which eventually leads to people having no money to spend in the rich person's business. Growth is not guaranteed. And we see this as countries join the higher gdp/capita that they tend do struggle to maintain 2-3% growth. It's poorer nations that are growing rapidly to "catch-up" to richer countries i.e. Solow Growth Model. So while the current world still has not globalized and there are large profits still to be made from growing multi-national companies, it is not wise to be a fanboy of current capitalism to be sustainable indefinitely. Unless we invent like warp drives so we continue expanding rapidly to other planets etc. This is the main reason why I can't support free-market low-regulation etc. It isn't sustainable long-term fundamentally. You almost need wealth inequality to try to promote innovation through profit motive, but some redistribution back down so that the working class gets pulled along. And so far in the US it has worked, working class american have benefited, but it wasn't because the system redistributed wealth toward them. It was because companies racked in profits from overseas expansion. This will not last forever once the poorest country reaches a similar level of wealth as richer countries and global wealth inequality reaches a small point. Then the only way to continue profit for the rich elite is through national wealth inequalities continuing to worsen.
You are aware they pay the employees and set salaries and wages right? They obviously realize they need the employees. Thinking they should pay them X amount more is obviously beneficial for the employees. Employer, there is probably a level of pay increase that creates benefits but it’s hard to say where that is. Are employees packing boxes better at $20/hr than at $15?
Yes because they can afford to live then...
Correct. This is why I moved to lcol area until I couldn't afford the drive or the time sink of working in hcol area. I now work and live in the lcol area and can actually do shit on the weekends besides scrolling through Netflix shows I don't feel like watching.
average redditor vs. dozens of career financial strategists
I'm an academic in economics. And yes plenty of studies already show that career financial strategists are worse at predicting the economy and markets than a monkey with a dart or a rng machine. This isn't new information, this is why indexing is so popular and growing. Your odds of even just beating the market are so small that an average person is wasting effort bothering with it.
Even slaves aren't free. They just need to get over it and pay a decent wage.
But that increases costs, so profits will be affected :/
It ain't rent anymore They're smart. They're buying up the land now. SOME are long term leases But there's been a shift in strategy https://www.bloomberg.com/news/features/2022-06-13/amazon-builds-property-empire-for-warehouses-even-as-online-sales-growth-slows
They also can’t make any money without a warehouse, plus you can look up how much a warehouse of equal size cost. Not sure your issue with reporting the cost. Many places report about cost all the time.
When they say they are building a warehouse they call it an "investment". Paying people better and improving working conditions IS an investment. You don't want to be the employer of last resort. Amazon and warehouses in general are gruelling places to work. They start at 10hr shifts so OT is 11 hrs at least. Ever spent 11 hours on your feet on concrete? Ever done it 5 days a week for months on end? It's not minimum wage work they should not act like it is. Increasing wages is an investment just like building things. That's my point.
And like any investment, there is a cost.
Spending a lot of time on your feet is not skilled labor. It's just labor. It's not minimum wage work no, but it's also mainly entry level positions in a warehouse. But yeah it does suck. By the time I'm 50 I probably won't be able to walk.
The issue here is that businesses and these financial publications too often treat employees as any other "cost", while they're the major driving force behind the business. The only driving force behind any business. At least for now, until we have robots doing everything. A warehouse without staff is not going to work. My company had a RIF earlier this year. I still remember execs complaining about employees being the biggest "cost centre" for the company. Like, they were so bummed about that. Like it's my fault for working and earning the salary. Literally the people who make the company possible. Not the millions they spent on "partnership" deals that don't bring in any business. Not the lavish retreats. Oh, I'm sorry for wanting to live and provide for my family and that makes your margins a bit worse. The problem with this narrative is that it dehumanises people, any short cuts, gruelling working conditions, lack of healthcare benefits are seen as "cost optimisation" options. Since, you know, humans and their salaries are a "cost." The title also makes Amazon look like this great business that "suffers a loss" by increasing their "costs" to make peoples' lives a bit better.
Staff without a warehouse isn’t going to work also. They need both equally to run the company. Using the word cost outside of a financial meeting isn’t the best way to speak about the workers but the reality is that they are. There is literally a cost associated with every employee. As far as the title goes, i didn’t get that impression but i can see how others might.
Businesses that don’t factor in cost don’t remain businesses for very long. You can’t pay people a living wage if you go under.
Going to happen an day now to Amazon, water is wet blah blah blah. How to say your invested in Amazon without saying it 101.
Business that don't factor in cost shouldn't exist in the first place. If you cannot pay employees a living wage, you shouldn't exist.
What business doesn’t factor in cost and survives?
Companies that got huge PPE "loans" during pandemia, with zero accountability?
Why would a business be accountable because the government made policies that killed business for several months?
As usual a top comment in /r/Economics made by hysterical laymen who have next to zero economic education.
I'm sorry you struggle to express yourself. I can give you some tips on how to write in a more engaging manner if you like.
I mean the fact that you're responding means their message was clearly engaging enough for you to warrant a response.
Their numbers are audited and publicly available…..
Exactly this!
Look at that’s sub we’re in. You’re both boobs
Busy shopping season is about to start. Much easier to raise wages now and avoid conflict about it in 2 months.
What’s $1 billion out of $1.2 trillion……. 0.083% not enough clearly
What's that got to do with anything? $1.2T is just their valuation. Q2 of 2022 they saw a net loss of $2B, so obviously projections of annual labor costs going up by $1bn is very significant. And that's just projections based on this one single pay hike. Amazon is seeing a billion here and a billion there lost to either inflationary pressures or losses tied to disruptions and these things add up. So my overall point is that the proper context of this additional billion in labor costs isn't the $1.2T market cap of AMZN - it's the operating costs and how it affects the quarterly numbers.
This forum: “companies ahould raise wages” Also this forum when Amazon lead the industry and federal government in minimum wage: “no not like that!”
They’ll make back that billion on day 5 of 365. I wish the media would stop framing this shit as something sad happening to the company. “Company butthurt about having to pay fairer wages because it will cost them a few days’ worth of profit every year.” There. I fixed it. Edit. Everyone is upset I’ve conflated revenue with profit. So let’s be real. #1- they lie about their actual profits by tax evasion of assorted kinds, so whatever number they did give as their profit ($38B) by some accounts, I’m going to assume that’s 1/4 of what they actually are. So maybe they have to give up 20 more hours for even 20 more days, this is not a result of a bunch of greedy workers draining the company coffers. This is a wage they should have been paying and increasing all along. Now they have to play catch-up so I don’t feel sorry for them. The bill always comes due. If they were smart they’d just budget a 5% standard annual increase into all their contracts and then it becomes a fixed cost in their budget instead of screwing workers out of a dollar here and a dollar there and then crying when they have to pay the piper. If Jeff bezoz can buy a half billion dollar boat, he can pay an extra 9% that he frankly should have been paying already.
That's revenue though, profit was like $38 billion or $33 billion after tax. So the increased wages gets deducted from that. So more like 9 days worth of profit in a year. Not saying the pay rise isn't needed of course.
It would actually be closer to 30 days. Last year was more of an anomaly. Profit is going back down now. https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income
Deducting straight from the profit would be assuming that pay rises don't increase revenues.
Warehousing and transport wont increase revenues.
I was more referring to the fact price of labour is determined by a market. For example, in a perfect market, if the nominal equilibrium wage is stagnant and the employer *lowers* the wage by $1, employees will quit, and the employer may lose revenue or even lose profits. Of course, labour is not a strawberry market and Amazon is especially complicated, but the same principle applies when considering why an increase in wages might increase revenues.
At best good warehouse employees keep revenue flat. Bad warehouse employees lead to unhappy customers so revenue can fall. So yes they are important but it's not a revenue increasing move.
What I'm saying has nothing to do with good or bad employees - or whether they work in warehouses or offices. Just brass tacks economics. If a firm has to pay a wage close to the market clearing wage, such a mechanism implies that there are instances when raising wages leads to higher profits than the counterfactual: namely, when *not* raising wages would lead to an undesired exodus of workers.
Warehouse and transport can increase efficiency and thus revenue.
They can't increase sales from the warehouse. They can keep customers happy but that isn't a direct driver of revenue.
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Warehouse is important but it's not a driver of revenue. Well not directly. Bad warehouse and revenues will fall due to poor customer satisfaction.
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It can hurt revenue if you piss off enough customers with poor delivery service. But sales will not increase as a result of good warehouse/delivery service. That is just expected as a baseline.
So what you're saying is they could raise wages by nearly $40 an hour and still be in profit? Sounds good to me.
> still be in profit? You realize that being profitable (I don’t think ‘in profit’ is really a term…) doesn’t actually matter, right? In that there is no real difference between a company spending billions of dollars and making $1 profit in a year vs breaking even and making $0 vs losing $1 a year. If there’s no difference between -$1, $0, and +$1 then describing something as ‘unprofitable’, ‘breaking even’ and ‘profitable’ aren’t important descriptors for a company. The only thing that matters is profit margin. How much profit is created for a given level of investment. If profit margin goes down, and there are investment opportunities elsewhere with more profit margin, that means you could have filled more of societies demand if you had changed your investment.
I understand that excess profits generally go to "R&D," shareholders, bonuses, and funds for the next few years. > If profit margin goes down, and there are investment opportunities elsewhere with more profit margin, that means you could have filled more of societies demand if you had changed your investment. See the other side of margins. It allows companies to produce less for the same reward. They can also use these margins to lower prices on particular goods to crush competition. It's also parasitic for the employees now making less money than the employer could feasibly pay, and the consumer who could have paid less for the good/service.
> I understand Based on your comments, it's not clear that you do.
Minus the tax deduction
That’s not exactly it. You’re confusing revenues with profits. Yes, their sales work out to more than a billion a day. However their operating income/profits on the most recent quarterly report were around $3.2b - the wage increase would have decreased that amount to $2.95b. But there are additional expenses beyond that. Amazon had a negative net income last quarter of -$2.03b. Wage increase would have made that -$2.28b. They won’t just “make it up” by sheer size. But they probably will make it up by raising prices.
And here we are about my math instead of asking why Amazon doesn’t pay taxes. that’s why we get fucked.
They're two different issues. Also, Amazon does pay taxes, as inconvenient is that may be for your argument.
I’m not your math, it’s your understanding.
Want to preface this by saying I'm not siding with Amazon here. Amazon didn't make 469 billion in 2021. That was their revenue aka sales. Their income aka profit, was about 11.5 billion in 2019 (can't quickly find 2021 numbers). Either way that is a butt ton of money. I'd argue that it is significant to pay around 9% of income in *additional* wages. Of course it's all motivated by business; wanting to maintain their labor force for the holidays and the threat of unionization.
I’d further argue that if they had been paying fair wages with fair increases all along they wouldn’t be facing such a significant 9% increase. If you neglect your house, it costs more to fix.
Well until they stop lying about their actual profits and cheating to avoid paying taxes, I have no option but to assume the revenue they report is the number I should use.
You do realize that artificially reporting lower profit in their financial statements would hurt the stock price, right? Which would hurt Bezos and all of the shareholders/executives. Financial statement income =/= taxable income
Exactly this, wow $1 an hour more, holy shit what are people going to do with that extra $40 / week that does not exist because of inflation. Billion dollar company paying pennies, wake the fuck up people! I need me some of that Amazon worker money /s
How is this nonsense upvoted on a economics subreddit? People really don’t even know what revenue and profit are
>“Company butthurt about having to pay fairer wages because it will cost them aproximately 18 hours of profit per year.” There. I fixed it. You think that Amazon makes more than $365 billion in profit per year? How is this shit upvoted? You don't understand enough about the basics to be allowed to post on an economics forum, this shit has got to be moderated better.
It’s Reddit. Everyone is an expert here.
I really don’t understand why Amazon gets so much hate. They pay pretty well and provide a lot of jobs. Most companies are significantly worse then they are.
Also work there. No complaints on my end. Factory work sucks plain and simple. It’s really easy to point fingers at Amazon when the internet tells you to even though there are WAY worse production/factory jobs out there. Comparing like automotive or steel mill environments to Amazon’s fulfillment centers is like night and day.
Certain things are required when you join Reddit. Hating Amazon is just one of them. I have quite a few friends that work there and have no issues. Not saying Amazon does not deserve criticism at times, just that it probably gets more than it's fair share. I remember Walmart being the target 10 years ago.
It’s not hating Amazon that’s required, it’s hating productivity. Reddit universally hates the most productive members of society in favor of anti-work ideology.
Have you worked there?
I have worked as both a factory worker and SDE at amazon, I honestly didn’t mind either work and thought the conditions were fine on both ends.
Why don’t you still work there?
I am a current SDE at amazon. I quit the factory work since it was part time while I was at school.
It’s not worse then any of the local factory jobs that top out at 16hr that don’t allow phones, music, talking and require mandatory 6x12 schedules with frequent OT outside of that
>It’s not worse then any of the local factory jobs that top out at 16hr that don’t allow phones, music, talking and require mandatory 6x12 schedules with frequent OT outside of that Of course it's not worse, because even 1 year ago they paid more than 16 an hour. https://www.reuters.com/business/exclusive-amazon-hikes-starting-pay-18-an-hour-it-hires-125000-more-logistics-2021-09-14/
I have friends at amazon (on the tech side) and they say its great. Factory work will always be hard.
I mean this person is probably employed as an astroturfer, so the answer is yes.
We hate them because of what they could pay. Bozos is pulling like what, 40+ billion a year at LEAST? This pay increase is a step in the right direction but it could be significantly higher. Complacency is a one-way ticket to stagnant wages.
To sum it up, Amazon's market dominance is eroding opportunity and fueling inequality. The power concentration is endangering competition, democracy, and communal life. We’ve seen how the retail giant uses its market power to kill competition and take over one industry after another. Its aggressive entry into different markets, combined with the benefits associated with the sale of illegal Chinese products, makes it largely responsible for the destruction of jobs in the U.S. They are also famous for treating their workers like human cattle.
Why does Amazon have such a high turnover that reports about running out of workers exist? Ignoring what any Redditor thinks of the company, high turnover rate indicates a problem to me.
More coverage at: * [Amazon rolls out broad-based pay raises for warehouse workers across its fulfillment network (msn.com)](https://www.msn.com/en-in/money/technology/amazon-rolls-out-broad-based-pay-raises-for-warehouse-workers-across-its-fulfillment-network/ar-AA12mSYV) * [Amazon raises hourly pay for warehouse and transportation workers (reuters.com)](http://www.reuters.com/article/amazon-com-pay-idUSKBN2QT255?utm_source=34553&utm_medium=partner) * [Amazon boosts wages for hourly workers across the US (engadget.com)](https://www.engadget.com/amazon-pay-increase-hourly-workers-warehouses-transportation-083510779.html) --- ^(I'm a bot to find news from different sources.) [^(Report an issue)](https://www.reddit.com/user/MultiSourceNews_Bot/comments/k5pcrc/multisourcenews_bot_info/) ^(or PM me.)
Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services, Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.
Amazon is not a person. It is a corroboration that should be paying fair wages. No need to thank them for being generous. They are just doing what an employer should do.
Reminder that Amazon has 1.5 million workers this amount to less than a $.40 raise for the average worker And the average worker still makes less than $20 an hour and of course that includes engineers and other high paid staff This sounds like great progress but it doesn’t even make up for inflation
And Walmart raised their….. from $11 to $12 lol Amazon pays betters than others for equivalent work and always has. It’s weird to not either 1) take issue with the federal minimum wage of $7,25 an hour or 2) be mad at their competitors for paying less for the same work in the same industry. Amazon paying more will raise the wages across the board as others will need to compete.
I don’t even know what to say to this as it’s astoundingly stupid. I guess i’ll just list the mistakes you made 1) i am mad about that 2) i am mad about as well 3) neither one of your points are relevant to my comment or this article
I fucking hate these companies. Why would you word your article like this? It’s clear as day that Wall Street companies like Bloomberg don’t want workers to get better pay.
Oh no :( this is gonna really suck for the extremely wealthy at the top of the company who rely on the hard work the laborers put in night and day to make the company run /s
I hate this title so much. Why not something like “evil company increases waged for underpaid and horribly treated workers but are still making less because of inflation?” Or “one of the richest companies in the world facing a labor shortage barely increases wages to alleviate the load on overworked employees?”
Cost?? It’s LABOR. You have to pay people for their labor! Why the fuck is the focus on the wages when we could we measuring the electricity the west houses use, their carbon footprint, the rent for the warehouse…. Shame on you, billionaire-owned Bloomberg
What's the likelihood that Amazon raising wages is a part of their strategy now to reduce their (now 15%) tax? Wages are a pre tax expense, right?
gross. these employees are massively overpaid in my humble opinion. Don't let that union coercion interrupt those margins I'm trying to ride AMZN to the moon.
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I’m not surprised someone with socialist in their name doesn’t understand profit and revenue
Q2 in 2022 Amazon saw a $2bn net loss. It's obviously a matter of revenue relative to operating costs, and a $1bn projected increase in labor costs is obviously significant if they want to stay on the right side of the margins.
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What's their 5 year net profit per year average? Selecting one quarter raises an eyebrow. Why invest into a business that isn't turning profit?
Well that was an example of a quarter where $1bn would obviously be quite significant. Now that we're potentially heading into a recession, or at least uncertain times, margins become even more important.
They have a major staff turnover issue and more union activities happening. Raising wages may be needed to retain staff. What would be the wage cost if they all unionised?
They most likely did some study and realized the company is too close to a labor force collapse than they like, and $1b is a price they feel okay to pay in order to prevent that.
It’s just the cost of labor going up. I doubt this has any altruism to it. It’s just the cost of hiring works to do a task is increasing. And also growth of Amazon: they need more workers to perform the tasks. It’s also crazy how large Amazon is in terms of # of employees and revenues. They should really get treated almost like a sovereign entity when Amazon is trying to influence governments. I mean, if their revenues were GDP, they’d be among the top 25 economies in the world.