Wouldn’t it be odd to see Amazon CEO Jeff Bezos praising Sen. Bernie Sanders (I-Vt.)? The notion that the richest man in the world and the de facto voice of America’s democratic socialists might tweet friendly messages at each other sounds laughable.
Yet it happened in October 2018, when Sanders praised Bezos on Twitter after Amazon raised its minimum wage to $15 per hour.
“What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be a shot heard around the world,” Sanders tweeted. “I urge corporate leaders around the country to follow Mr. Bezos’ lead.”
What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be a shot heard around the world. I urge corporate leaders around the country to follow Mr. Bezos' lead. https://t.co/06wIAHunPq— Bernie Sanders (@SenSanders) October 2, 2018
“Thank you @SenSanders,” Bezos said in a retweet. “We’re excited about this, and also hope others will join in.”
Why on earth would Bezos, a billionaire businessman who launched his career on Wall Street, praise a $15 minimum wage?
Perhaps it’s because big businesses like Amazon, which reported more than $230 billion in revenue last year, can easily afford to pay their workers a $15 hourly wage.
What about smaller businesses? To keep up with corporate superpowers like Amazon, smaller businesses will have to cut costs elsewhere to cover those expenses.
For small business owners to foot a $15-per-hour bill for every employee, they will have to raise prices or reduce worker hours, worker benefits, or worse — lay off employees. None of those moves would help workers.
Consider New York City for example. The restaurant industry is being annihilated in the Big Apple. A survey by the New York City Hospitality Alliance reported that in 2018, 36 percent of full-service restaurant respondents eliminated jobs, and 76.5 percent reduced employee hours.
These actions will have devastating long-term consequences. Up to 1.7 million jobs will be lost and 261,000 jobs will be eliminated off the bat, according to a study by the American Action Forum, which analyzed the minimum wage hikes that went into effect in cities and states across the country this year.
Expecting every state in the country to mandate a $15 hourly wage is foolish. California and Wyoming, for instance, are not on even financial footing.
To echo U.S. Secretary of Labor Alexander Acosta, “Should the states that are higher cost-of-living states be able to impose their cost structure on the lower cost-of-living states, knowing that it will cost a lot of jobs in those states?”
“We want to grow jobs,” Acosta said. “We don’t want to give up jobs. A $15 minimum wage is going to cost us jobs.”
Big businesses like Costco and Target, which offer minimum wages of $14 and $12 per hour, respectively, would not feel the burden of a $15 per hour mandate. For small businesses that can only afford to pay workers the $7.25 federal minimum, it will be a nightmare.
Big businesses like Amazon embrace policies love the $15 minimum wage — not because can they afford it, and not because it makes them look morally superior. They love it because it allows them to artificially force their competitors to keep up.
For some small businesses, a $15 mandatory hourly wage will be their demise.