Amazon Will Raise Its Minimum Wage To $15 For All 350,000 US Workers (recode.net) 327
Amazon said Tuesday it's raising the minimum wage for all 350,000 of its U.S. employees to $15, effective next month. From a report: The new pay threshold will go into effect Nov. 1 and impact all full-time, temporary and seasonal workers across the company's U.S. warehouse and customer service teams as well as Whole Foods, the company said in a blog post. It did not disclose what its current minimum pay wage is for U.S. workers, perhaps in part because there is not one set rate. "We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," Amazon founder and CEO Jeff Bezos said in a statement. "We're excited about this change and encourage our competitors and other large employers to join us." Alongside the cash compensation bump, Amazon said it will eventually eliminate its practice of granting stock to these workers and will instead institute a program that allows them to purchase Amazon stock through the company. The announcement comes as Amazon faces increased criticism over its pay and treatment of warehouse workers. Senator Bernie Sanders, in particular, has been relentless in his criticism of Amazon over the last few months, proposing a bill that would tax the company as a penalty for having workers who need food stamps and other public assistance to make ends meet.
2nd 18th century (Score:5)
... for having workers who need food stamps and other public assistance to make ends meet.
So, in effect, nothing has changed in 300 years. This is work ethics from the steam age.
Ford and the Fed (Score:4, Interesting)
The frightening aspect is price inflation that has already occurred and will accompany a broader application like a $15 minimum wage. Such a tremendous rising wage is a symptom of expansion of credit and money.printing, courtesy of the Federal Reserve since 2008.
As long as productivity is going up (Score:5, Insightful)
If anything we need shorter work weeks and higher pay to absorb job losses due to increased productivity. At my job it's been the same 3 man team for 15 years (with folks coming and going here and there) and our user base continues to increase. We haven't had to hire more because the software keeps improving so there's less to break, keeping the amount of work pretty consistent even as the number of users we support climbs.
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And productivity has doubled in the last 20 years
In America, productivity has gone up about 30% in the last 20 years.
... and continues to climb
In America, productivity growth has been mostly stagnant since 2004 [bls.gov].
If anything we need shorter work weeks and higher pay to absorb job losses due to increased productivity.
There is little historical evidence that increased productivity causes job losses. There is much more evidence for the opposite, and productivity improvements are more often than not correlated with rising labor force participation rates.
As workers become more productive, it is more profitable to employ them, so demand for labor goes UP, not down.
Countries with low produc
If you measure by manufacturing output (Score:3)
And we most certainly have had technology unemployment in the past. The Luddites weren't just overly conservative, they were losing their livelihoods. We produce twice as much with 2/3rds the workforce.
When there are new jobs they're low paying service sector jobs. But the trouble there is there's less money in the economy, so less money floating around and an overall slowdown
Re:Ford and the Fed (Score:5, Interesting)
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They had 10-11 hour shifts back then.
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They had 10-11 hour shifts back then.
The standard shift was nine hours in 1914 and probably included a break at some point. Originally the daily wage was $2.50 for a nine hour shift. Ford had to hire 52,000 men (there were no women back then) to maintain a staffing level of 14,000 in the production plant. The high rate of turnover was causing very serious production problems and costing Ford a lot more money than doubling the wages would. Ford doubled the wage to $5, reduced turnover and saved a lot of money.
Re:Ford and the Fed (Score:5, Interesting)
A different way to calculate the value of $5 in 1915 would be to compare it to house prices. A 48 week year of 5 days a week at $5 would net you $1200, and house prices were ~$3200. So Ford paid around 37.5% the median house price per year. Current median US house price is roughly $200k, so if Bezos wants to deserve a comparison to Ford he needs to up wages to about $39 an hour.
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The median house in America today is more than twice the size it was in 1914. If you calculate by square foot of housing, wages today are about the same.
But housing prices have climbed faster than general inflation for most of the last century, so it is not a good benchmark for comparing wages.
Re:Ford and the Fed (Score:5, Interesting)
Current median US house price is roughly $200k, so if Bezos wants to deserve a comparison to Ford he needs to up wages to about $39 an hour.
In 1915, $5 would buy a quarter ounce of gold. To keep up with Ford, Bezos would have to pay ... 1/32 oz/hour ... $1200/oz ... $37.50 an hour. I'd say your math checks out!
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House prices these days are based on two incomes per household, in 1915 that would have been 1 income/household. House prices have been climbing faster than inflation for a long time.
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Re:Ford and the Fed (Score:5, Interesting)
Not only the Fed, Congress and our alleged Presidents went along with massive reductions in tax receipts and massive increases in spending. Inflation will really bite because to tame it will require the Fed raise interest rates. In a year or so, the U.S. will spend more every year on servicing its debt than it spends on the military.
Now, let us all bow our heads in remembrance of those solemn vows Republicans gave us that the tax cut will pay for itself in the hopes we fail to notice the deficit going to over a Trillion dollars every year. Remember also that Trump once claimed he was the kind of debt. Also remember that he destroys all that he touches.
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300 years ago they didn't have food stamps (Score:2)
Still, this is great news. The public shaming (mostly from Bernie Sanders) worked. It worked for Disney too.
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Would you outlaw jobs for teenagers? It's already vastly harder to get a teenage shit job than it was in my day,
There's a place in the market for shit jobs for peolpe still living at home, going to school, and looking for both pocket money and learning how to work any job (show up on time, sober and well groomed - you'd be amazed). It's bad when adults find themselves working such jobs, but if you have no skills at all, you have to start somewhere.
Amazon warehouse jobs are a tier above that, and it makes
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If raising the minimum wage would effectively outlaw part time warehouse work at Amazon, how do you explain Amazon voluntarily increasing to $15/hr? Looks like it isn't so impossible after all.
And if it's not actually impossible, then nothing is "effectively outlawed" at all.
I'm reminded of an interview with a sandwich shop owner in N.Y. city complaining bitterly that with unemployment going down he has to be nice to his employees and even, God forbid, make sandwiches himself sometimes.
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If raising the minimum wage would effectively outlaw part time warehouse work at Amazon, how do you explain Amazon voluntarily increasing to $15/hr?
I never made any such claim. But demanding that all Amazon workers are paid enough where they don't need food stamps? Hows that going to work for people who work 24 hours a week? 12 Hours a week?
This is not helpful (Score:5, Insightful)
Doing something like this across the board makes no sense since so many locations have completely different costs of living.
Some areas, this will be so over paid that it will cause prices to rise as other companies start having to match the wages.
In other areas, 15 is not even close to meeting a living wage that it will do nothing to help.
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$15/hr is overpaid in what context?
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Yeah, I'd say most of Texas outside of some of the major cities.
In fact, in San Antonio 30,000 is enough for a single person to get by comfortably. (May not at the comfort level a lot of the higher middle class that a lot of Slashdot users live at.)
I was making $46 thousand and was the sole provider for my family of 4. Cooking your own meals and not going out for lunch makes a huge difference in a budget.
Re:This is not helpful (Score:5, Insightful)
So people who live in a populated area, with a lot of job opportunity (high price areas) will move from living in abject poverty to just poverty.
The people who live in a less populated area, with little other job opportunities (low price areas) can now have a comfortable life style.
Perhaps there should be more effort in finding way to lower cost of living in Cities, vs. finding ways to improve property costs (AKA raising the cost of living)
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Warehouses are all located just outside cities. About the same distance, because they are logistic centers. They need to be close to the places the ship to (and next to major truck routes), and where land is cheaper.
Prices only really rise (Score:5, Insightful)
If I may rant a bit here, I do wish we could get rid of this pernicious lie that raising wages is pointless because it just means prices will go up. It's so obviously wrong on the face of it. If such a thing were true we'd never have gotten out of the gilded age.
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"We've doubled productivity in the last 20 years while wages remained the same or went down. "
Average non-farm real output of workers per hour [stlouisfed.org] has risen by 50% over the least 20 years.
Average non-farm real total compensation of workers per hour [stlouisfed.org] has risen by 20% over the last 20 years.
The question, though, is what is the distribution of those two items. Has the rise in average productivity been driven by the productivity of a few, high-earning non-average workers, or has productivity risen for all workers?
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You realize that our productivity rises are do to technological advances, not actually people working 50% harder.
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Re:This is not helpful (Score:5, Informative)
Wages tend to be a small part of the cost of most goods though. When you look at he volume of bread coming out of factories and the number of people working there, wages don't contribute much to the sale price.
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Wages tend to be a small part of the cost of most goods though. When you look at he volume of bread coming out of factories and the number of people working there, wages don't contribute much to the sale price.
That argument is very narrow in scope. As a whole, wages are the only cost of most goods. Sure, the staff at the bread factory may not be a significant portion of the cost, but other resources are purchased to make the bread. Those resources have labor costs.
The grain mill has staff to turn the wheat into flour.
The truck driver has to be paid to transport the flour
The farmer has to be paid to grow the wheat.
The truck driver has to be paid to transport the wheat.
It takes labor to find and extract a
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The grain mill has staff to turn the wheat into flour.
And the mill spends much more on buying wheat than on paying that staff.
The truck driver has to be paid to transport the flour
And his pay is a very small fraction of the cost of the load.
The farmer has to be paid to grow the wheat.
The farmer isn't getting paid a wage, so he's irrelevant to this discussion.
The truck driver has to be paid to transport the wheat.
And his pay is still a very small fraction of the cost of the load.
It takes labor to find and extract any natural resource.
That doesn't mean labor is the most expensive part of that process.
Re:This is not helpful (Score:5, Informative)
In most of those examples, there is still an underlying labor cost.
And no one is disputing that. What we are disputing is your attempt to make that labor cost a large part of the overall cost. And it simply isn't.
In the end, the vast majority of the cost of any goods are labor.
[Citation Required]
Let's look at some numbers instead. Raising the minimum wage from $7.25 to $15 is a more than 100% increase. So what affect would that ~100% increase have on prices? Well, let's look at the worst-case scenario: Fast food. Because unlike all your examples, a significant percentage of the costs in a fast food restaurant is wages.
That 100% increase in wages translates to....a 4% increase [purdue.edu] in the cost of the food. Or about 17 cents for a Big Mac.
If a 100% increase in wages only yields a 4% increase in one of the most wage-intensive industries in the country, we probably shouldn't be worried much about the effect on the price of milling wheat into flour.
Re:This is not helpful (Score:5, Insightful)
That will increase the costs throughout the entire supply chain.
Here's what you're desperately skipping over:
It will increase the costs throughout the entire supply chain by a trivial amount because wages are a tiny fraction of the costs in the supply chain.
You keep insisting that the increase will be large because you keep mistakenly thinking wages are a large expense. They aren't. That 4% increase on a 106% increase in wages is one of the worst-case scenarios.
When you sum all of the costs down the supply chain, labor is the dominant force.
Once again [Citation Required].
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And at each and every one of those steps, labor is a small contributor to the price. Profit for the management and capital class is a larger chunk.
Even less of the cost is attributable to people being paid minimum wage.
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Part of the problem as I see it, is that people expect, for example, a Big Mac to cost the same whether you are at a McDonalds in the middle of San Francisco, or a McDonalds in Nowhere, OK
People have been unable to expect this within a single city, much less across the country. There are nearby McDonalds that are expensive and some that are cheap.
My typical "Oh shit I'm late for work" breakfast is about $2.75 at the one near my house, and about $4.75 at the one near work.
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They will likely see some improvement as well since they could more easily get another job paying $15 and their employer can't afford for everyone to leave.
So no, they won't be pissed off. They will see benefits as well.
Good for you Amazon (Score:2)
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no, it's the companies that don't want to pay that minimum wage that make people unemployable. Don't blame the decision of a company on anyone else.
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Amazon seems to be ready to compete on wages. Which isn't a total shock since economists have been saying there is no way companies could hold out forever with record low joblessness and continue to deny market realities which dictate a raise in wages.
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Which isn't a total shock since economists have been saying there is no way companies could hold out forever with record low joblessness
It is a surprise, if not a shock, because record low unemployment is a myth [shadowstats.com].
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Even with that very broad measure, it's going down, which means upward market pressure on wages. As the economy continues to improve, wages will continue to rise. Let's just keep this economy going as long as we can before the next stupid bubble.
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An employment-population ratio of 100% is not something to strive for. But that assumption underlies all of the methodology used at ShadowStats.
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That metric is interesting because while it is not a record low as you say, you can see the disparity g
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Comment removed (Score:5, Interesting)
Pre-emptive action, to avoid lawmakers. (Score:2)
This is a pre-emptively action, that is to avoid this.
Diverting 0.0x% of their profit to their actual workers is not an actual cost
They are trying to look good in front of the growing critics.
If 15$ is a living wage, remains to be discussed.
For people citing inflation, please consider that
McDonalds in for instance Denmark are able to pay workers an ok salary + 5 weeks of vacation,
while Big Mac prices are not that much higher than the US
Yes
Why would Amazon want to "lead" to $15? (Score:4, Interesting)
Why lead and suggest other companies go to $15 for their minimum pay? At this time they will be paying a premium for workers. This is just good business. They will retain workers better, and attract better workers. Turns out if you pay more you get to pick from more applicants with better skills.
So why would you want your competition to meet the same pay? I suppose this is simply a political move. Looks good if you go first. Unfortunately, in the business world this will be forgotten by next Monday.
Not sure what the impact will be about the stock grants their losing. Maybe they will give a discounted stock purchase plan, which might compensate the lost income. Also, you don't need to hold the stock grants till they mature, usually like 4 years for all of the grant.
Wow how much were they getting paid before? (Score:2)
That's the trouble with the American economy (Score:3)
Yeah, you can buy used, but the price of used cars keeps going up
Um, it's $16/hour in Seattle (Score:3)
Talk about being behind the curve, Amazon.
We listened to our critics AKA the Market (Score:2)
Over the last 12-18 months, finding people to work a bit above minimum wage (due to the fact that we receive federal aid for those jobs, we can't post them any higher) has been increasingly difficult. We recently posted one for basic grunt work and got only 3 applicants and I keep passing McDonalds locations that have signs up at $15-18/h for shift managers.
Economic growth is exploding, the lowest unemployment in decades drives wages up. NYS is increasing minimum wages to $11.15 next year but nobody even wa
Re:A living wage for workers? (Score:5, Insightful)
but that's SOCALISM!!
In this case it is capitalism because Amazon is doing it to keep hold of it's workforce and probably to have a better public image so it will sell more crap. The government isn't forcing Amazon's hand so it is capitalism.
Re:A living wage for workers? (Score:5, Insightful)
No, its the threat of government intervention like the tax mentioned that would likely cost it more in the end. Don't get me wrong, I'm happy with this result. But don't pretend they would have done this absent the likelihood of higher penalties.
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No, its the threat of government intervention like the tax mentioned
There is little chance of government intervention, and ZERO chance of Bernie's idiotic tax on hiring poor people.
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The tax is a penalty for hiring crappy workers.
What they choose isn't relevant, basically never is. They made all their choices that mattered in middle and high school.
Re:A living wage for workers? (Score:5, Insightful)
You mean at an age where we don't believe they are mature enough to vote, make decisions about cigarettes and alcohol, or enter into binding contracts?
What's next from you? Making people carry through with what they said they wanted to be when they were four years old?
What of people who were doing everything "right" who got derailed by circumstances beyond their control? Or does that not exist in your odd little world?
Re:A living wage for workers? (Score:4, Insightful)
What of people who were doing everything "right" who got derailed by circumstances beyond their control?
An obvious way to help these people is to make it EASIER for employers to hire them and give them a chance to turn their lives around. For instance, the EITC [wikipedia.org] is an effective program that has helped millions of people earn enough to support their families.
But Bernie's poverty tax does the exact opposite. It penalizes companies for hiring the people most in need of a job. It is an insanely stupid proposal, and I can't believe that anyone takes it seriously.
It is a myth that "low pay" is a significant cause of poverty. The real problem is NO PAY. Only 9 percent of adults living below the poverty line work full time [washingtonpolicy.org].
If Amazon hires a poor single mother, it is idiotic to say that somehow Amazon "caused" her to be poor. The truth is, that by giving her a job, they are helping her take the first step out of poverty. Punishing them for doing so makes no sense.
Poverty is a difficult societal problem, and we should all bear the cost of alleviating it. Dumping the cost onto the companies that are providing much needed entry level jobs, and thus disincentivizing them from doing so, is counter-productive.
Re:A living wage for workers? (Score:5, Insightful)
So basic income it is. Easier to administer and actually closes the gap. It also avoids rewarding employers for paying less than the work is worth and expecting the rest of society to pay enough to keep their workers from dropping dead.
Or were you thinking of lowering the minimum wage to a penny because surely working 80 hours a week for a cheeseburger will help get people out of poverty.
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So your main upset is that they don't hurry up and die?
You might find that they are willing to violently oppose your nice plan for them.
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Re:A living wage for workers? (Score:4, Interesting)
Yes, so outrageously expensive that Amazon is voluntarily increasing wages to match the goal.
But since you seem content to use your tax dollars to supplement inadequate pay, why not just finish the job and implement the basic income?
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They're not doing it for any of those reasons. They're doing it so that that can say they did it for positive reasons while simultaneously asking government for force their competitors to do the same, especially if it hurts the competition way more than it hurts Amazon.
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Re:A living wage for workers? (Score:4, Informative)
WSJ reported today that "Amazon, which has faced criticism about pay and benefits, said it would raise the minimum wage for all U.S. workers. The company will also start lobbying Congress for an increase in the federal minimum wage, which is currently $7.25 an hour"
Might not be mentioned in the original summary or article.
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A living wage is not the same as minimum wage, it is an idea that has been around in the UK for some time. What is the living wage depends on all sorts of things, one of which is where you live [livingwage.org.uk]. London is the most expensive place in England at £10.20 (== $13.30), so Amazon's $15 is OK (which I found surprising).
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$15 is probably fine most places in the US if you're only supporting yourself. I imagine in places like Bay area in California, or New York $15 is really hard to live on. Rural America $15 is easy to live on for 1 person if you don't have rich tastes.
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How much money you need also depends on how many kids you have, and if you are a sole breadwinner for your household.
Should employers be required to pay more to people with more kids?
What if an employee breaks up with his girlfriend, and she moves out, taking her income with her? Now he needs more money to pay rent. Should he get an automatic raise?
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$15 is probably fine most places in the US if you're only supporting yourself. I imagine in places like Bay area in California, or New York $15 is really hard to live on. Rural America $15 is easy to live on for 1 person if you don't have rich tastes.
The only major difference between and major metro area and any rural area is the cost of housing. Wages are lower in rural areas because most employers hold a jobs monopoly and the only way to get a pay raise is to quit and move to another region. Most cannot afford to move, so stay put and wages stagnate. I suspect Amazon cannot find workers in Seattle at $15 per hour. If Amazon goes to a rural area, their only real competition is probably Wallmart, which pays $11 per hour minimum plus health care benefits
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In the US, it literally refers to the "minimum living wage"
What would a minimum wage be, if not the least wage that a person could survive upon?
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Who goes back a century and tells Henry Ford that he's a Commie?
How come... (Score:5, Insightful)
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Their fear is that if the unwashed masses can actually afford something, the increased demand due to a larger amount of people being able to afford something, will drive prices for stuff that only they could afford before up.
What they fail to see is how our economy actually works. If anything, it will result in more supply to hoover up the increased amount of demand, creating jobs and employing more people. Which is pretty unlikely considering the minimal increase in purchasing power.
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How come no one worries about inflation due to the constantly rising wages of CEOs and Wall Street douche-bags? ....subsidized by government programs like foodstamps.
Because the powers that be prefer to pit skilled workers against unskilled workers. We tell the $40 per hour worker he's being screwed over by the $10 per hour minimum wage worker. All the while we rob both blind. Inflation is caused by monetary policy PERIOD. Wages. and everything else is a side effect of this policy because it effects the prices of everything that we buy.
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Historically minimum wage changes has small effect on inflation.
First there is a factor is someone gets paid more, they tend to work harder. So a business doesn't need to hire more employees to expand. As employees who are getting paid more, are in less stress of their finances. So a lot of the costs are balanced by efficiency.
Second being minimum wage, you do not have a lot of buying power. For the most part the extra wages goes into things that you should have, but have been putting off. Oil change to y
Re:This will spur inflation (Score:4, Interesting)
trickle up and trickle down
Any additional income paid to people will simply be spent. I think this was researched in Texas where they found pay rises generate a lot of economic activity.
Paying people more money is a way to get more money into circulation instead of it sitting inside a bank account doing nothing.
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I hear this myth every time, yet strangely it never happens. Maybe because there's exactly no reason why it should?
We, in our post-industrial, service based economy, are a, well, service economy. Depending on the area you're in, 60 to 80 percent of all jobs are services. In other words, jobs that depend mostly on workforce and less on natural or industrial resources. Now, inflation is driven by a surplus of money compared to goods and services offered, with a shortage of supply and an increased demand due t
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Hint: We have a shortage of capable workers today. To the point that people that can barely fog a mirror think they're worth $15/hour.
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If you were offered less than it costs to continue existing, you might not be willing to do much more than fog a mirror either.
Kinda like at one time, slaves were claimed to be universally lazy. It couldn't possibly have had anything to do with not being paid, no no no.
In days of yore (Score:3)
Like the difference between "you" and "you're"?
Or the difference between "you're" and "your"?
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As wages go up, you will see inflation pick up as well (natural consequence) and as a result the stock market will plummet.
Ok, so what's the downside?
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at best trump is riding Obama's coattails after Obama fixed the mess bush left. And all indications are trump is screwing the economy up overheating it with money supply. His bad decisions take a while to catch up.
Just curious, how is Trump providing too much money supply? From my minimal understanding of economics, the fed is more in control of the money supply via their interest rate. If Trump has no political control over them, as I believe the fed has claimed, he is not the one controlling the money supply.
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I don't think it will be all that slowly. Expect to see more and more pick&pack robots at Amazon real soon now.
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Good.
Slavery and cheap labor have always been anathema to progress and technological advancement.
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That's nothing. They are not getting their AMZN stock anymore.
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Keep it nearby, this ain't gonna change much.
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It's not "other retailers" as a vague threat. WalMart is stepping up their game online, and is starting to appear as a real threat (I've started comparison shopping between the two, for instance.) Raising the minimum wage to $15/hr affects 17,000 full time Amazon employees, but more than 100x for WalMart, at least 1,700,000