Amazon's Minimum Wage Increase: Big Business Still Puts Money Before People

Business Insider

Amazon recently made headlines by raising its minimum wage for workers to $15 an hour.

The company had previously come under fire for "exploitative employment practices," so many people felt the raise was long overdue. But despite making $178 billion in 2017, Amazon appears to be unwilling to take the fiscal hit to ensure fair wages for their employees. Many Amazon workers have now said that the raise will actually decrease their total compensation because Amazon will no longer give employees new stock grants and monthly bonuses.

Unfortunately, Amazon is not an isolated example of the negative effects a higher minimum wage can have on employees due to employers unwillingness to lose money. Professor Jon Meer, one of the authors of a new paper that explores the effects of higher minimum wages, said, "[Higher minimum wages] impact other forms of compensation like benefits and possibly other things that aren't picked up in the data, like flexibility and free-parking."

A study done by researchers at the National Bureau of Economic Research seems to confirm Meer's findings. The study looked at employee pay data from 2011 to 2016, and found "robust evidence" that companies who raised minimum hourly wages also reduced the amount they paid for their employees' health-care benefits in order to make up for the added expense. The study found that workers whose minimum wage was increased by $1 found that 9% to 57% of their wage gains were offset by a decline in their employer's health insurance coverage. So, while workers were technically making more money, they had to spend a larger portion of that raise on health insurance previously provided by their employer.

Recode

In some cases of government-mandated minimum wage increase, workers actually end up with smaller paychecks because of employers unwillingness to cut profit in order to pay employees better wages. In Seattle, a 2016 increase to $13 an hour for minimum wage workers ended up meaning that many workers were scheduled for fewer hours in response to the change. A study by the University of Washington found that after the increase, Seattle workers clocked 9% fewer hours on average, and earned $125 less each month.

Considering Jeff Bezos once made $6 billion in 20 minutes, large companies like Amazon have little excuse not to pay workers enough to live without cutting their benefits. But for smaller businesses — often already fighting a losing battle against companies like Amazon — an increase in state mandated minimum wage can have dire consequences. According to the Employment Policies Institute, many small businesses are forced to close their doors when faced with minimum wage increases.

But then, it's important to consider, how viable is a small business that can't afford to pay workers enough to live? Does America need or want more companies that can't or won't meet minimum wage standards? Perhaps the ability to pay workers a fair minimum wage should be a standard by which we measure the quality of an American company. Unfortunately, the only way we are likely to see widespread progress in the minimum wage conversation is if the culture of American business changes, and companies like Amazon stop valuing money more than people.

Brooke Ivey Johnson is a Brooklyn based writer, playwright, and human woman. To read more of her work visit her blog or follow her twitter @BrookeIJohnson.

Related Articles Around the Web
minimum wage
Subscribe to PayPath Newsletter
PayPath
Follow Us on

Truebill Is The App Everyone Needs, I Use It Everyday To Track All My Finances

I thought I had a pretty good handle on my finances out of school. I worked several jobs while attending university and had little to no problem managing my income. However, once I graduated, I realized how much more complicated personal accounting could really be.

There were so many variables I needed to keep track of. Biweekly bills, monthly charges, and general necessities amounted to a heap of confusing numbers that were often impossible to decipher. The funniest part was that I was actually trying to do this by hand (I don't know what I was trying to prove to myself, either).

After messing up for the 17th time, I decided to give Microsoft Excel a shot. I used Excel a bit in school and I knew all the big-wig finance people used it, so what could I possibly have to lose? The answer is about six hours of my precious time. Excel isn't much of an improvement over handwriting and it's still dependent on the user to manually input all of the information. It's like doing everything by hand with the slightest help, meaning that it still required a tremendous amount of time and concentration. Well that was all for nothing, I guess.

It's sort of funny. I was certain that I could manage my personal finances with ease, when it's practically a full-time job. I was already stressed out enough with my first job and I knew I didn't have enough time to give my finances the attention it deserved.

That's why I decided to try out a budgeting app. My best friend told me that he uses an app called Truebill to manage his finances. "What does it even mean to manage your finances?" I asked him. He told me that Truebill was the personal financial assistant I wished I could have. It could aggregate all of my account information into one place and give me specific insights and actions.

I loved the idea of having full control over my finances, especially during a time of financial uncertainty, and I realized that Truebill would be the easiest way to accomplish this. The user interface is incredibly simple and intuitive, so it doesn't even feel like a finance app! Truebill offers a multitude of features, with their most popular being the ability to cancel subscriptions with the press of a button.

Okay, I had no idea how many subscriptions I was still subscribed to. In fact, I wasn't even using a quarter of the subscription services I was signed up for. Subscription boxes, streaming services, my old gym, and even an old subscription to my favorite magazine--it was all there and I was livid. How could I let myself waste all of this money and how did I never catch this? Thank goodness for Truebill.

Truebill also offers bill negotiations. There is a 40% fee based on how much you save and Truebill even claims that there is an 85% chance that they'll be able to lower your bill once a negotiation is requested. Why wouldn't I take them up on this? There was zero risk and I would only have to pay once my bill was lowered (which means that I would be saving money regardless).

More standard features of Truebill include the ability to generate a credit report on-demand and even request a pay advance. I only used the pay advance feature once when I wanted to buy a gift for my mom, but didn't have enough cash in hand and Truebill automatically reimbursed itself when I got my next paycheck.

The credit report is another fantastic feature and practically taught me what good credit meant. Truebill's credit report basically shows you which financial decisions have the most significant impact on your credit score and ways that you can improve your credit month-over-month. I've never had such control over my credit and it feels good.

I'll be the first to admit that I was extremely naive coming out of school. I figured that as long as I was attentive, I could manage my finances with ease. We manage money to some extent throughout our entire lives, but once you're thrown out on your own, it's a completely different story. With Truebill, I've finally been able to take control over my finances and stay on top of all of my responsibilities.

Update: Our friends at Truebill are extending a special offer to our readers! Follow this link to sign-up for Truebill.