Amazon raises wages to $15/hour

The Thinker by Rodin

The news has been pretty miserable recently. But yesterday brought an event that truly made me cheer out loud and actually made me teary. Amazon’s CEO Jeff Bezos, whose wealth grows by $250 million every day, decided to pay his workers at least $15/hour. Starting November 1, all Amazon employees, including the part time and temporary ones, will be paid a minimum of $15/hour. This resulted in something you would not expect: Amazon employees cheering their employer (see video).

This should make everyone cheer, except perhaps Amazon stockholders. This wage increase may reduce Amazon’s profits, and thus its stock value. More than likely though Amazon stockholders will grow to understand that this move makes business sense and will help ensure Amazon’s long-term profitability.

Early in the auto industry’s years, Henry Ford realized that if he paid his autoworkers generously they would buy his cars. If like many Amazon employees you now make ends meet (if you can) with second and third jobs, plus food stamps and Medicaid (in states where Medicaid is an option), receiving $15/hour means a whole lot more money in your pocket. Given that you can buy almost anything on amazon.com, a lot of that extra pocket money should go back into Amazon’s coffers.

If you are a taxpayer, you should be thrilled that Amazon workers shouldn’t need government assistance to survive anymore. The U.S. government doles out huge amounts of money in the form of corporate welfare, which in 2012 cost taxpayers about $100B a year. The primary beneficiaries of corporate welfare (unsurprisingly) are large corporations, which can afford to lobby for theses benefits. Because the government subsidizes their costs, this puts small businesses at a disadvantage. So when companies like Amazon wean themselves off of indirect corporate welfare (in the form of food stamps and Medicaid costs borne by taxpayers for their low wages), this competitive advantage largely disappears while also reducing federal and state spending.

Small businesses presumably won’t be happy if they have to increase their wages to compete with higher wages at places like Amazon. They are under no obligation to do so. But workers who can opt for higher wage employers like Amazon will try to get jobs there instead. Higher wages allow Amazon to pick from a better talent pool and retain workers. Ultimately small businesses have to either become more efficient (like Amazon) or pay their employees a living wage too. This may result in higher costs, but higher costs are easier to handle if there are consumers with more money to spend. And that’s another benefit of these actions: putting more money into circulation, so the economy does better overall.

Other large employers are raising wages too. Target is on track to raise its minimum wage to $15/hour by 2020. Given that Amazon will offer more sooner, they might want to match Amazon’s wage rate sooner too. Early this year Walmart raised its minimum wage to $11/hour. They may now face similar pressure. More progressive companies were there way before Amazon. Costco pays its employees a starting salary of $20/hour.

In the case of Amazon, it looks like shame was an effective strategy. Just last month, Senator Bernie Sanders (I-VT) introduced the Stop BEZOS Act, which would have levied a tax against large employers equal to the public benefits their employees receive. In a Republican congress, the act had no chance of passage. But just by introducing it and making noise about it, it convinced Jeff Bezos to raise wages. In fact, Bezos thanked Bernie Sanders. Bezos is now on record as a supporter of a living wage and hopes Amazon’s actions spur other employers to do the same.

The great thing is that it probably will. Amazon’s action feels like the straw that broke the camel’s back. The $15/hour minimum wage proposal is very popular with the public. Back in 2016, 53% of Americans supported raising the minimum wage, and 48% of Americans supported a $15/hour minimum wage. Those numbers are likely higher now. By setting a new floor of $15/hour, it also encourages employers to raise wages generally. These are important steps to address the widening income inequality between rich and poor, but also between the rich and the middle class.

$15/hour is still probably not really a living wage in most of the country, but it’s closer to getting there. Its main benefit is simply to make work pay again. One reason for the generally low labor participation rate in the United States is because work does not pay for most jobs that require few skills.

These actions are not happening due to an employer’s beneficence. They are the result of a lot of sustained actions by Democrats and progressive groups. It’s quite clear which party is really on the side of the working class, and which is not.

Like many Americans, I spent time eking out a living (if you can call it that) at or just above the minimum wage. It is nearly forty years in my past, but I never forgot just how hard it was, and it is much harder today than it was then. That is why I have supported actions like Fight for $15 to set $15/hour as a new minimum wage and to better allow these workers to unionize. It’s hard for me to understand how anyone who had to survive on these miserly wages could not. Basic decency requires that all Americans be paid a living wage. $15/hour is a start.

Whites are being horribly exploited … by other whites

The Thinker by Rodin

Fox News host Laura Ingraham drew some attention in August when she said this on her Fox News TV show:

“In some parts of the country, it does seem like the America we know and love don’t exist anymore,” she said, with videos of agricultural work playing over her shoulder. “Massive demographic changes have been foisted upon the American people. And they’re changes that none of us ever voted for and most of us don’t like.”

Donald Trump’s election proved there are plenty of white people worried that America isn’t quite white enough for their tastes anymore. It’s making them nervous and scared and not coincidentally is causing many of them to stock up on guns.

The browning of America is hardly new but for decades Republicans have been riding this anxiety to political power. Richard Nixon’s 1968 Southern Strategy (as well as his Silent Majority strategy in his 1972 reelection) harnessed this fear. Ronald Reagan stoked it too, with images of imaginary welfare queens buying steaks and driving Cadillacs. Donald Trump of course made this anxiety the center of his campaign and his presidency. Fear, particularly fear of “the other” is a powerful motivator.

Reagan’s imaginary welfare queen was probably not a white person. This is strange because whites receive the majority of food stamps. In 2015, 40% of SNAP recipients were white. That’s more than blacks (26%) and Hispanics (10%) combined. If you are one of those whites on food stamps though, it may be scary though because it suggests that you can’t do any better economically than those other “lesser” races in our country. That can be unsettling. But whites traditionally have always been the biggest recipients of food stamps because they are a majority of the country.

Still, Laura Ingraham’s remarks are awfully odd considering that she has an adopted Guatemalan daughter. With images of brown agricultural workers in the background during her tirade, you have to wonder how long it’s been since most of our agricultural workers were white. Whites don’t want to work agricultural jobs, even for increased wages. I live in Western Massachusetts where local farmers advertise heavily for agricultural workers but get few takers. That’s because these jobs are brutal, far away and don’t pay well. Just 23% of agricultural workers in the United States were born here. I was born in 1957 and I’d be very surprised if in my 61 years the majority of agricultural workers were ever white.

As for Ingraham’s assertion that none of us ever voted on these changes, what a load of malarkey! Congress makes immigration law so we have only ourselves to blame. Agricultural interests though doubtless pushed these laws. They succeeded with guest worker programs and policies that gave short shrift to immigration enforcement on our Mexican border. This was not bad. It allowed our agricultural section to flourish and keep their prices low. With native born Americans unwilling for the most part to take these jobs, that we still have an agricultural sector is due principally to these workers we’re told to despise. To this day, it’s largely unheard of for an employer to be held liable for undocumented workers they employ.

Yes, America certainly did look a lot whiter in 1957 than it does today. The places I lived in when I was young were so far in upstate New York that I don’t recall even seeing a black person until I was in high school. Lots of these places still exist, but in cities like Hazelton, Pennsylvania they are finally coloring up. And it’s making lots of whites in Hazelton anxious. In 2013, a Hazelton-area chief of police channeled his frustrations with a crazy YouTube video.

There are plenty of reasons for whites to be anxious, but it’s not because the nation is coloring up. It’s because pathways for whites to enter the middle and upper classes are narrowing. Things are particularly bleak for blue-collar whites, the base of Trump’s support who he’s largely left out to dry. A good paying blue-collar job is hard to find and harder to retain. When lost these workers usually quickly fall into jobs that don’t pay a living wage, even if they work two or three of them. People like Amazon warehouse workers, many of whom are on food stamps. Amazon CEO Jeff Bezos is worth $164B but can’t pay his warehouse workers a living wage. He’d rather let the U.S. government try to fill in the difference with food stamps instead. Amazon is hardly alone, which is why a $15/hour living wage proposal polls so well.

It’s the rise of wealth inequality that is driving most of this white anxiety. While courting whites though Republicans (and sometimes Democrats) have worked instead for their real masters: corporations and rich people. They’ve enacted tax cuts that disproportionately allow the rich to keep more money. They cut services and when possible entitlements that principally benefit the rest of us, like affordable public college tuitions, that used to be free in many states. Corporations use their tax cuts to buy back their own stocks rather than raise wages for their employees or invest in the future. Minimum wage laws rarely move upward, making it impossible for people falling through the cracks to reach for the next rung. So-called Right to Work laws make it hard for workers to organize for higher wages. Moreover, Republicans shamelessly feed the myth that if you work harder and try hard enough you can scale the economic ladder. In most cases though they took the rungs out of the ladder decades ago. Middle and lower classes have been disenfranchised not by accident, but by design. Bernie Sanders long ago recognized the real issue: the system is rigged against working people.

The game is rigged but there are some signs that whites may be waking up at last. Midterms in two months should be revealing. In deeply red states like Oklahoma, West Virginia and Arizona teacher strikes have drawn the sympathy of the public, including working and middle class whites. They are even electing politicians who commit to raising their taxes in exchange for more services. They can certainly understand how teachers are struggling economically on substandard wages. It may be that Republicans have played the race card about as far as it can be played.

In any event, it’s absolutely clear that the rich and the powerful, who are principally white men, have been systematically and cynically abusing middle income and working class whites, feeding their anxieties and promoting false rationalizations for their anxieties. Curiously the best way to make this anxiety ebb is for whites to rise up against their economic masters and elect people who will put rungs back in the economic ladder again, many of whom will be brown, black or female. White politicians are horribly misleading and abusing them.