Sen. Bernie Sanders practically vents steam when he discusses retail giant Amazon. The Vermont senator, a Democratic Socialist, characterizes Amazon CEO Jeff Bezos as the poster child for “corporate greed,” and his proposed wealth tax would lighten Bezos’s wallet by more than $5 billion per year. Sanders would also break Amazon into smaller companies, to stop what he calls “monopoly” abuse.
Yet Amazon (AMZN) has now joined Sanders in one of his key fights, the push for a $15 minimum wage. Amazon conducted a survey recently, with research firm Ipsos, that found 80% of Americans feel the current minimum wage, $7.25 an hour, is too low. Fifty-six percent of respondents support more than doubling the federal minimum to $15, while just 31% oppose the idea. (In a Yahoo Finance-Harris Poll earlier this year, 83% of respondents agreed that a person working a full-time job at the current minimum wage of $7.25 an hour isn’t making enough money to live.) Sanders has been pushing for a $15 minimum since his first presidential run in 2016, and while some companies pay their workers that much, Amazon may be the only big U.S. company actively campaigning for what is basically liberal legislation.
It’s in Amazon’s interest to support a $15 minimum wage. Amazon already pays that, so a hike in the federal minimum wouldn’t affect Amazon at all. But guess who it would affect: Some of Amazon’s competitors. A few other big companies, such as Target and Costco, start their workers at $15 or more. But most retailers don’t. Starting pay is $11 per hour at Walmart and CVS, and $10 at Dollar Tree, for instance. Some retailers claim their “average” pay is $15 per hour, but minimum starting pay is lower. So if Congress did raise the minimum wage to $15 per hour, labor costs would rise for most retailers, but not for Amazon.
Amazon would probably love to earn some goodwill from Sanders and like-minded allies such as Sen. Elizabeth Warren of Massachusetts and Rep. Alexandria Ocasio-Cortez of New York. All favor a wealth tax and other liberal policies, citing billionaires like Bezos and behemoths such as Amazon as evidence that American capitalism concentrates too much wealth among too few people. The biggest threat to Amazon from the left is probably the call for antitrust action that could split apart the company’s retail, cloud computing, delivery, entertainment and home technology divisions.
If Amazon is trying to woo Sanders, it doesn’t seem to be working. At a March 17 hearing of the Senate Budget Committee, which Sanders chairs, Sanders chided Bezos for declining an invitation to testify on wealth inequality. The committee did hear testimony from an Amazon worker in Bessemer, Ala., where some Amazon workers are trying to unionize—a move Amazon opposes. “If he was with us this morning,” Sanders declared, “I would ask Mr. Bezos … you’re the wealthiest person in the world. Why are you doing everything in your power to stop workers in Bessemer, Alabama, from joining a union?”
Fending off union activity
Backing a $15 minimum wage is something of an answer. If the government sets a high floor for pay, who needs a union? It wouldn’t be a stretch for Amazon to someday back government provided health care, for the same reasons: Amazon could bear the taxes needed to pay for it better than competitors, and it would undermine unions even more.
It’s also politically safe for Amazon to back a $15 minimum wage—because it’s extremely unlikely to happen. Sanders suffered a defeat in February when the Senate, surprising nobody, stripped a $15 minimum wage provision from the huge relief bill it passed a few weeks later. Democrats will try again this year to raise the minimum wage, which has been stuck at $7.25 since 2009. But even some Democrats think $15 is too high. Research from the Congressional Budget Office and others shows that a sharp boost in the minimum wage would raise pay for some workers while costing others their jobs. Democratic Sen. Joe Manchin of West Virginia, a key swing vote in a chamber where the Democrats have a one-person majority, says employers in his state might be able to handle a hike to $11, but not to $15.
Nevertheless, they persist. Sanders and Warren surely know the odds of getting a $15 minimum wage is essentially nil, but refuse to back down. Maybe their strategy is to shift the “Overton window” by reframing the debate and making a hike to some lower level, like $12 or $13, more likely than it would be otherwise. Or maybe they’re willing to fight for $15 for so long that in a decade or two, when inflation has eased the sting for employers, a $15 minimum wage might finally be plausible.
Meanwhile, the lack of any compromise leaves the minimum wage stuck at $7.25, even though there’s bipartisan support for at least a modest increase. Congress may be able to raise the minimum to $10 or even $11 at some point this year, with the hike phased in gradually over three or four years. Amazon has undoubtedly thought this through. The company’s advocacy for $15 is not likely to produce a $15 minimum wage, but it will make Amazon seem enlightened and progressive no matter the outcome. Bernie Sanders is a useful ally when you can take his side without any consequence.
Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.
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