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article imageAmazon pay hike — Cheers, jeers, and skepticism on Twitter

By Karen Graham     Oct 3, 2018 in Internet
After Amazon announced thousands of its warehouse workers will be paid at least $15 per hour under a new wage hike, the e-commerce giant got a round of applause. Now that the dust has settled, people are wondering what really happened.
Bernie Sanders, a very vocal critic of the way Amazon treats its employees, was one of the first politicians to heap praise on Jeff Bezos, Tweeting, "I want to congratulate Jeff Bezos for doing exactly the right thing by raising the minimum wage at Amazon and Whole Foods to $15 an hour."
Jeff Bezos, in turn, profusely thanked Sanders in a Tweet, saying: "Thank you @SenSanders. We’re excited about this, and also hope others will join in."
Rep. Ro Khanna (D-Calif.), who along with Sanders introduced legislation last month to impose a tax on companies with 500 or more employees that would see them fully compensate for any government benefits their workers draw, was also impressed, comparing Bezos to auto pioneer Henry Ford.
The majority of social media comments were favorable over the increase in Amazon's minimum wage, and certainly, it was needed. But even with a raise to $15 an hour, many people, particularly those with families are now wondering how a raise in pay to $2400 a month before taxes is going to help them in the long run.
What was the reason behind the wage hike?
With all the adulation from two of Amazon's toughest critics, it doesn't mean the e-commerce company is off the hook. Yes, Amazon employees needed and deserved a hike in their minimum wages, especially after it was disclosed that its median worker salary is $28,000.
Many commentators are skeptical as to the real reasons behind the sudden announcement of the pay hike. In reading some of the responses on hashtag #Amazon15, including a number of tweets by apparent employees, some cracks begin to appear in this employee-focused move by Amazon.
An interesting question has raised its ugly head on social media. Some people are suggesting that Bezos, in order to protect his company's standing in the e-commerce market, raised wages in an effort to kill the competition.
And that is a possibility when you look at it from a corporate view. After all, it is a dog-eat-dog world out there. “It's a super tight labor market and Amazon is under political pressure, so Bezos did it for business reasons,” Matt Stoller, a fellow at the anti-monopoly Open Markets Institute, was quoted as saying by Politico.
“They get some good press out of it and they’re under political pressure so this is an attempt to ward off antitrust action,” he argued, adding even though the pay raise may have eased the political pressure a bit, “the pushback it is getting from its anti-competitive behavior is not going to stop.”
Stacy Mitchell, co-director of the Institute for Local Self-Reliance points out that Amazon's long-range game plan is to have fewer employees and more automation. “They have a long game that involves cutting labor costs by cutting workers out of the picture,” said Mitchell, whose group opposes economic consolidation, in an interview.
Actually, as was noted in Digital Journal on Tuesday, the increase to $15 an hour would cost the company about $1 billion or less annually and be offset by a recent $20 increase in the cost of Prime memberships. So Bezos is not taking a hit and neither is the company.
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