Oct 2, 2018

Amazon and the Minimum Wage Debate

Amazon raising their minimum wage to $15 an hour shouldn't come as a shock—Amazon is in direct competition with other large-scale retail stores like Wal-Mart and Target to employ the same group of workers, and these "big-box retailers" have been steadily raising wages over the last few years to attract and keep the best workers. Amazon hired 120,000 workers for the holiday rush last year and will be hiring even more this year, so the wage increase just makes economic sense, especially given the current low unemployment rate. 

The real story, however, is how Amazon intends to lobby the federal government to raise the federal minimum wage. This is a tactic that economists call "raising rivals' costs" and it's intended to make it harder for business competitors to compete on the basis of lower prices. It's a great example of how the government policy can be weaponized to serve special interests.

Photo credit: Cliff Owen/AP/Shutterstock

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