Comment by photochemsyn | Hacker News Reader

Comment by photochemsyn | Hacker News Reader

The general issue with the largest employers in the neoliberalized countries (Amazon, Walmart) relative to the outsourced sectors (manufacturing mainly) is that wages are now much lower for the blue-collar worker, who is now doing service/shipping (~$15/hr -> ~$30k/yr) rather than manufacturing (~$30/hr -> ~$60k/yr).

Amazon employs about one million people in the United States, and unionization and collective bargaining could easily result in a doubling of their labor costs. This would certainly benefit the local economies surrounding Amazon warehouse locations, but would mean profits and dividends would fall. This is a significant number, an increase in labor costs by about $30B per year.

Amazon's gross profits vary year-to-year, but are on the order of $150B, so they can clearly afford to pay their workers a wage that would allow them to move up to respectable middle-class status - and this would also likely result in less employee turnover as well. The investors and executives would have to absorb the costs, but isn't that reasonable?

Amazon as a whole is profitable, but AWS subsidizes the rest. Amazon retail loses money because it's constantly undercutting competitors, and investing heavily in further CapEx to reduce costs.

If they had to pay living wages to those employees, they would stop being able to undercut every other business.

Sounds like labor is subsidizing AMZNs ability to undercut competitors.

Without Bezos, when will AWS be spun off? It's a stock payoff for execs waiting to happen, and the execs can only turn a blind eye to that for so long.

Well, if Amazon spun off AWS they would have no choice but to treat all the retail-side issues (counterfeit goods, BS reviews, garbage search results, shoddy delivery subcontracts, facilitating the sale of stolen merchandise, warehouse working conditions) as actually worthy of Day 1 focus. Are they ready to do that? Unfortunately it's not as glamorous as building rocket ships, buying news companies or building web service infrastructure...

Amazon net income is less than $30B. They also do not pay dividends.

And that is basically all AWS. Retail has actually lost money in the past 3 quarters.

If they cannot afford a good salary, then the business is a liability

This is a fun soundbite, but it's completely arbitrary and meaningless. You could just as easily and accurately come up with something along the lines of "if a union causes its employer financial distress, it is a liability".

I think a key fact is the right to unionise in America is protected by law. You could make two contradictory statements like:

> If they cannot afford proper safety equipment then the business is a liability.

And

> If buying safety equipment causes an employer financial distress then it is a liability.

But I think most people would agree with the first statement and disagree with the second.

>"if a union causes its employer financial distress, it is a liability".

Except that has been an actual feature of unions. Plenty of unions have agreed on work reduction and other cost abating ways to help a struggling company continue to function in times of distress. Workers plenty well understand that a failed company provides them none of the benefits of the union.

I'd expect that an across-the-board increase in Amazon prices would be a side effect of unionization and wage increases, perhaps by 10%. I don't think that this would reduce consumer demand much, however, or make Amazon a non-viable concern.

Reply on news.ycombinator.com