It appears that President Trump isn’t the only one who is winning these days. Sen. Bernie Sanders, the aging socialist, declared a win last week after Amazon announced that starting November 1 it will pay all its U.S. workers, including part-time, temporary, and seasonal workers, a minimum of $15 an hour, and all United Kingdom workers at least £9.50 an hour. This move will affect more than 250,000 full-time employees and 100,000 seasonal or part-time workers.
Sanders has been on a crusade against Amazon, especially its founder, Jeff Bezos. It clearly bothers Sanders that Bezos is the richest man in the world, with an estimated net worth of $168 billion, while reports show some Amazon employees use welfare such as food stamps and Medicaid.
In Sanders’ words, “the wealthiest person in the world is advertising jobs that pay workers wages that are so low that they have to go on public assistance and be subsidized by the middle class of this country. That’s wrong. That has got to change.”
Like all socialist arguments, this one sounds so fair and righteous on the surface that people who choose not to think any deeper are easily swayed to outrage. Also like all socialist arguments, this one doesn’t stand a chance against logic and reason.
Take the Log Outta Your Own Eye First, Buckaroo
Bezos wasn’t born with a silver spoon in his mouth. He didn’t become super-wealthy because of any government mandate, nor by sticking his hands in someone else’s pocket, like a typical politician. “Society” didn’t bestow any wealth on him. No government officials ordered him to build Amazon, nor offered him any useful ideas on how to turn a business profitable.
Like all great entrepreneurs, he used his mind, took a great deal of risks that few people would, and built a successful business by providing products and services that millions of customers not only want but also can’t live without. Because of his vision and audacity, 563,100 people (the total number of Amazon employees as of April 2018) have a secure means to provide for their families and find upward mobility.
It’s funny whenever I hear Sanders complain about other people being rich, because the self-proclaimed socialist from Vermont is a millionaire himself. Although he wasn’t born rich either, he accumulated his wealth through more than two decades of being a “public servant,” mostly from a six-figure salary as a senator.
Sanders’ wealth makes him one of the top 4 percent wealthiest Americans, even though he can’t point to a single job he has created as a result of his lifelong “public service.” Also as a typical socialist, he is all about redistributing other people’s wealth but never volunteers to redistribute his own to people in need.
A Job Is an On-Ramp to Better Things
Amazon’s online retailing business model relies on more low-skill workers than other typical tech companies do. Low-skill workers are a vulnerable group because their employment choices are limited and their type of work makes them easily replaceable. When the economy is bad, they are often hit the hardest because they are usually the first group to be let go. When the economy is good, they are often the last the group to recoup any real economic benefits.
We don’t know how many of them were already on various public assistance programs before they started working for Amazon. But we do know that the best way to help them to get out of poverty is work. To many, securing employment at Amazon is probably one of the best things in their lives. One thing Sanders and other “living wage” proponents don’t get is that a job at Amazon that requires little skill and pays at $11.25 an hour (before benefits) is a starting point, not an end, for many of these low-skill workers.
For these workers, employment with Amazon, even at the lowest point on the pay scale, provides them a steady work environment, an opportunity to learn new skills, and to take the first step to climb out of the poverty trap and to ascend the economic ladder.
Of course Bezos isn’t the only billionaire that Sanders has problems with over employees’ pay. Walmart and the Walton family have long been accused of ripping off millions in taxpayer subsidies by paying employees low wages. Yet according to Wal-Mart, 75 percent of its managers started in low- or minimum-wage positions but now earn between $50,000 and $170,000 a year.
Sanders’ Policies Kill the Economy that Benefits Workers
But as we already learned, facts, logic, and reason don’t matter to socialists. Only last month, Sanders introduced legislation called “Stop Bad Employers by Zeroing Out Subsidies,” or Stop BEZOS Act, to “demand that Mr. Bezos, the Walton family of Wal-Mart and other billionaires get off of welfare and start paying their workers a living wage.”
Specifically, this bill “would establish a 100 percent tax on corporations with 500 or more employees equal to the amount of federal benefits received by their low-wage workers. For example, if a worker at Amazon receives $2,000 in food stamps, Amazon would be taxed $2,000 to cover that cost.”
Even though this bill has no chance of passing, Amazon announced a wage increase for its employees less than a month after Sanders introduced it. No wonder Sanders is taking a victory lap for the effectiveness of the power of government coercion.
But the truth is that Amazon raised workers’ wages because of market conditions, rather than political pressure. The latest unemployment number is at 3.9 percent, a historical low. The last time we saw the unemployment rate this low was at the end of 2000 and January 1970.
Socialist Policies Kill Strong Jobs
This strong job market isn’t caused by any government mandate but is the result of a booming economy. There are more jobs available than workers who are willing and capable to take them. The Wall Street Journal reports that “There were a record-high 6.9 million job openings in July, including 757,000 in retail and 299,000 in the category that includes transportation and warehousing.”
With the job market this tight, it’s only a matter of time for businesses like Amazon to raise wages to retain existing employees and attract new ones. In fact, Labor Department data shows “wages in several low-skill occupations including warehouse workers, retail clerks and restaurant waiters are rising at a faster rate this year than overall hourly pay.”
Let’s also not forget that the holiday shopping season is coming soon and Amazon will compete against other retailers and businesses for seasonal workers. So Amazon’s minimum wage announcement on Tuesday is more of a reaction to market forces, rather than bowing down to Sanders’ demand.
Of course, Bezos and his politically savvy team know announcing the wage raise will shoot two birds with one stone: keeping their workers happy while keeping politicians like Sanders at bay. Rather than patting himself on the back, Sanders should have learned by now that good things will happen to American workers if he just stays out of way of entrepreneurs and businesses and lets the market run its course.