Amazon’s prime wage
Our view: $15 an hour at the e-commerce giant changes the national debate
Eighteen states started this year with a new minimum wage, a recognition that the federal minimum wage of $7.25 has not kept pace with the cost of living and that the widening gap between the wealthy and working poor continues to tear at the nation’s social fabric. In that context, the “Fight for 15” has become a battle cry, but even the most aggressive localities — including California, Massachusetts and the District of Columbia — have set a $15 minimum wage as a future aspiration: California in 2022, Massachusetts in 2023, and D.C. in 2020.
Move over, state legislatures, county councils and city halls, Amazon just raised the bar. The online retail giant announced yesterday that beginning Nov. 1, Amazon’s employees, including seasonal workers, will earn at least $15 per hour. The decision comes at a particularly fortuitous moment for Baltimore as the company’s Sparrows Point fulfillment center — with its estimated 1,500 employees — is expected to open soon. One imagines that the new standard will force many other local employer, from warehouses and distribution centers to retail outlets and grocery stores, to follow suit in short order or find themselves without a workforce.
And it doesn’t end there. Amazon’s Tradepoint Atlantic facility isn’t being staffed by college graduates (although they probably aren’t precluded from applying). Here’s what Amazon’s recent hiring events have been looking for: Full and part-time employees of at least 18 years of age with a high school diploma or the equivalent. That makes the $15 minimum a true entry level wage. The company obviously expects to pay more to those higher up the ladder. And that, too, should echo in the local job market.
We’ve had our doubts about a $15 minimum wage on the state level, and we opposed the Baltimore City Council’s effort to set such a minimum locally. The danger was — and still is — that increasing the minimum wage too high and too quickly might make us uncompetitive for employers, including, ironically, Amazon, which is in the midst of choosing a location for its second headquarters. But the Seattle-based company’s decision is a game changer in at least one regard: It will demonstrate that companies that traditionally have required lower-paid, lesseducated and even part-time staff can thrive with a minimum wage that is more than double the federal standard.
Still, some critics are likely to see this as a giant lobbying move by Amazon, which has demonstrated a savvy approach to taxes and regulations in the past — including the lucrative tax package that awaits its HQ2 should Amazon choose Maryland’s own Montgomery County. The company was against paying local sales taxes — until it decided that was actually in its best interests. And Amazon has been criticized in the past for not paying its fulfillment workers enough, particularly in light of those taxpayer-funded subsidies. And it follows a recent move by a major competitor, Target Corp., to raise its minimum wage to $15 per hour by 2020.
But enlightened self-interest is not a sin, it’s what we expect from responsible corporations. Andso Amazon’s decision has cast the $15 minimum in an entirely different light: If major corporations are already moving in that direction, what’s the proper response by government? Clearly, we can’t expect President Donald Trump or the Republican-held Congress to allow for a higher minimum wage. Such a move might have been in the DNA of past Republican presidents going back to Dwight Eisenhower, but it’s regarded as too progressive now. That leaves it in the hands of states.
No doubt, this action by such a large private employer will prompt others to follow. Given the state of the economy and the low unemployment rate, many other companies will need to raise wages to compete for workers. But not all, and that’s where state governments may need to step in. With the overall landscape tilting toward higher entry-level wages, a mandatory $15 minimum wage (at least at some reasonable future date) seems less like a burden on employers and more like a protection from less scrupulous actors in the marketplace — much in the same way government protects responsible businesses from competitors who put their workers at risk with unsafe conditions or release toxic pollutants into the environment.
And before anyone starts bemoaning the impact on consumer prices, let’s remember that people who earn a living wage spend that money. So a boost in wages at Sparrows Point is good news, not just for 1,500 people; it’s bound to have ripple effects for landlords and retailers, car sales and grocers. As they say on Amazon’s website, that’s something we “may also like.”