Suppose that Jeff Bezos is visited by three ghosts and wakes with an epiphany. He has long been aware that his lower-level employees are not paid enough. Many qualify for government assistance and some are even homeless. It’s time for him to do something about it and he has a vast personal fortune with which to do it.
Which leads to my question: What, realistically, could Mr. Bezos do to improve the compensation for the rank-and-file Amazon employees?
A little bit of Googling reveals that Bezos is now the Executive Chairman of Amazon. He is paid $81400 for his services. Amazon also pays about $1.6 million (last year) for Bezos’ business travel and security expenses. Those are not enormous numbers. Most of Bezos’ wealth is tied up in Amazon stock. I don’t see how merely selling off that stock improves conditions for workers. Even if it did, it isn’t a sustainable strategy – eventually that resource will dry up. Bezos cannot simply cut his personal compensation from Amazon and do anything to materially make changes.
I’m not wanting to make excuses for our oligarchs. Surely there is something that Bezos could do that would be fair to Amazon workers and still be fair and sustainable for Bezos himself. What could he do?
I don’t know if he is still in the position to make such changes (but if he isn’t, some other wealthy oligarch is), but the obvious answer is to simply raise the wages of the rank and file Amazon employees at the expense of Amazon profits. That delivery driver making $15 an hour*? Increase their wage to $25. The warehouse worker making $17.50 an hour? Raise that to $27.50 per hour. And so on.
*. Numbers for illustrative purposes only. I don’t know what their actual pay is.
He doesn’t give those workers his own money. All of it would be a one-time drop in an ever-draining bucket that needs refilling every 2 weeks.
Instead he raises their wages to levels that provide them with an adequate living. Which in turn cuts Amazon’s profits & dividends. Oh well, sucks to be the shareholders.
If necessary he raises Amazon’s selling prices. It would not take much percentagewise. They already significantly undercut most competition; just reduce the undercutting some. As well, they have a de facto sorta-monopoly on large swathes of retailing. For those of us who use Amazon a lot, where can we go if they raise prices? In many cases the answer is “nearly nowhere else”. So we’d grumble and pay up, not switch away.
This. I’m ok with that. Why am I ok with that? Because the workers actually work for their wages, and for the most part the shareholders (guys like Bezos) didn’t earn their shares with their own labor.
Convert Amazon from a for profit company into a co-op and slowly distribute ownership of the company to the workers who have worked there. Also sell off his stock and use the money to fund programs for the bottom 99%. Health care initiatives, pensions for the elderly and disabled, tuition assistance, etc
Bezos only owns 1/10th or so of amazon, so he doesn’t have the power to do that by himself. The next best thing is for him to slowly sell off his stock, or distribute the stock to the employees.
Bezo’s ex-wife Makenzie Scott got about 1/4 of Bezo’s stock during their divorce. She got about 40 billion in stock, and already has given away about 30 billion of it in just the last few years. But due to growth in the stock she is still worth about 30-40 billion. So rich people selling their assets and redistributing the wealth can be done. The issue is if they’re just selling the assets to other rich people, it doesn’t really ‘solve’ the problem (I could be wrong). To truly solve it, you need to convert companies into co-ops or mandate that at least 50% of shares go to workers, something like that.
People talk about how bad income inequality is, but they have no idea how bad wealth inequality is.
0 is perfect equality, and 1 is perfect inequality. Even thought a lot of western nations have gotten their income inequality down to 0.3 or so, their wealth inequality is still around 0.8.
Thats why we need federal and global cooperation on things like wage floors and taxes on wealth. If all companies that sell products in the US are forced to have a minimum wage of $20/hr along with benefits, then nobody can undercut each other with cheaper labor. There have been efforts to have a global minimum wage of $3/hr or so too.
Sure, short term he can raise wages of the employees, but that leaves him vulnerable to shareholders’ lawsuits that accuse him of not turning as much profit as is physically possible, which many courts have affirmed is the sole measure of being a fiscally responsible CEO.
So he could use his personal fortune to try eliminate that problem. Fund political movements intended to enshrine workers’ rights in law, establish unions as a default practice in every business, and enact laws that make it clear that “maximise profits” is not the sole measure of fiscal responsibility, so as to forestall whiny lawsuits from the people who haven’t been Marley’s Ghosted.
IANAL, but I don’t think there’s a fiduciary responsibility to pay low-ranking employees starvation wages. If maximizing profit were the only obligation of the CEO, why aren’t they sued for extravagant executive salaries and obscenely huge bonuses and other benefits?
I think those who suggested simply changing Amazon policy and raising the salaries of warehouse workers and other low-ranking employees have nailed it. And it need not even impact profits if they also cut some of the fat from executive ranks, as I just noted.
Maybe Amazon executives should talk to Costco, which is a public company that I understand has starting wages for front-line employees that top local minimums, and feature regular automatic pay increases, robust benefits for part-timers, and premium weekend rates.
Giving away some of Bezos’ personal wealth is an entirely different issue, which is something that should happen as well.
Or Buc-ee’s. If they can build an empire of convenience stores, including the largest convenience store in the world, while paying people $20 an hour to clean bathrooms, it’s possible to do it. They just don’t want to.
You’re free to think anyone who disagrees with you is uninformed.
However the tax foundation is a right wing think tank so they have their own bias.
Also this is why you need a global wealth tax, so that the wealthy cannot move funds around.
Norway took the profits from their fossil fuel sector and invested them in a sovereign wealth fund. This is better than alternative systems of having 2 trillion dollars in the hands of a handful of rich people (the political leaders in the middle east, shareholders in fossil fuel companies, etc).
If you simply divide Amazon’s 2025 net profits by the number of employees they had, each employee would get a $50,000 bonus. Cash. That’s life changing money for most people. And that’s not draining anything, that just means that Amazon’s cash pile doesn’t grow by $77 billion one year.
I actually think you’re underestimating how wealthy Bezos is. This isn’t a realistic plan, but for illustrative purposes, let’s consider this quick math:
Bezos personal wealth is valued around $300b. Google says he employs roughly 275,000 Amazon drivers. If Bezos wanted to personally give them all $5hr raise for the next 20 years he could easily do it. It would cost about $3b a year and $60b total. Leaving Bezos with only $240b net worth.
$5hr is an extra $200 week or $10k a year. Pretty substantial.
Again, illustrative only. Forget present value, what is $5hr worth in 20 years, what would happen if Bezos sold his stock, etc etc.
sorry, that came out wrong and I certainly wasn’t referring to you. It was a frustrated reaction to hearing people screaming “tax the rich” into the interweb without a clue as to what that actually means or the consequences (intended and unintended) involved. my apologies. Let’s just agree it’s a complicated subject that would probably deserve it’s own thread to discuss further.
I guess my point is that there are efforts to tax wealth that attempt to circumvent capital flight. Things like land based taxes, or a global minimum corporate tax, a global minimum wealth tax, or ensuring the wealth created from natural resources go to sovereign wealth funds rather than private companies and individuals, etc.
Bezos isn’t CEO of Amazon anymore. Andy Jassy is. He’s not even a billionaire. Loser.
Look, it’s much simpler than that.
Amazon has a net income of $30 billion a year. They employ 1.5 million people. They could give the lowest third an extra $20k a year if they wanted and still have $20 billion left over.
I say the lowest third because there are a lot of people at Amazon in management or tech roles at AWS who make good money and probably don’t need more.
Or he spends the $3B to replace them with robots…which he will probably try to do anyway.
I’m as much frustrated by people on the right who scream that the rich are untaxable or that the “free market” will magically fix everything or that corporations shouldn’t be made to actually eat the cost of doing business. And I say this as a kind of rich guy who believes in the free market.