economy

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
PayPath
Follow Us on

GeistM Ranks High On Inc. 5000's Fastest Growing Company List

GeistM has ranked #433 on Inc.5000 elite list of America's fastest growing private companies. The annual index, which has previously honored current leaders in their fields like Microsoft, Dell & LinkedIn, gives you a glimpse at the fastest growing independent small businesses taking the US economy by storm.

GeistM, the #1 Performance MarTech Platform powering digital marketing for a portfolio of top class brands and innovative startups, has reported 3 year revenue growth of 1,157%.

Kevin Fortuna, Founder and CEO of GeistM remarked: "Our momentum is building, and we expect our explosive growth to continue. GeistM's performance-driven, partner-friendly business model -- together with our best-in-class technology, our close relationships with network partners and the top-notch work from our talented staff -- are creating a 'virtuous cycle' for our business" .

GeistM is a part of a prominent group of companies featured on the list, who are not only competitive, but have collectively achieved an astounding three-year average growth of 538.2 percent. The Inc. 5000's mass revenue was $206.1 billion, and is responsible for creating 664,095 jobs.

"Our data-driven model enables us to identify and scale winning combinations of content elements, offer dynamics, networks and targeting strategies. At GeistM, we don't think of ourselves as an ad agency or a "vendor" – we're an extension of the marketing teams of our partners. We look for category-leading companies with complex or unique value propositions and the capacity and commitment to scale spend in proven channels of customer acquisition. Our best-of-breed MarTech platform, BlackFire, and our obsessive focus on performance-driven results for our clients, have been the driving factors of our success."

GeistM has exhibited staggering growth in recent years, and it can be attributed to its winning combination of talented staff and innovative approach to marketing technology. The measure of GeistM's worth is clearly evident by not only its skyrocketing success, but by the glowing customer testimonies they receive. "The team at Geist has knowledge and insight unlike any other platform and partner I've worked with. Their passion for product marketing, ability to optimize and propose new ideas makes them the ideal partners to work with."

If their astronomical growth so far is anything to go by, GeistM shows no signs of slowing down and will continue to rise above the rest.

Related Articles Around the Web
digital marketing

What is net neutrality and what happens when it ends?

Pexels

On December 14, net neutrality rules put in place under the Obama administration were overturned. The Federal Communications Commission voted to remove these regulations after Trump's appointed FCC Chairman Ajit Pai proposed in May to remove the classification of internet service providers (ISPs) as public utilities. These rules were adopted in 2015. Should this be removed, ISPs would be able to charge more for customers to access the internet and different websites.

The economic effects of this action could be wide reaching. ISPs would have the ability to create what has been referred to as “fast lanes." Or boost traffic for certain websites while slowing others. As an example, AT&T could allow you to easily stream Netflix, but slow speeds for Hulu — which might render the site useless on your home broadband wifi. Additionally, Netflix may have to pay extra cash to AT&T to make sure their site runs properly on your wifi. And this extra cost would likely be passed down to the consumer in higher subscription fees.

Internet providers could also provide access packages similar to how your cable company does. Customers would have to pay a certain amount a month to access email and social media. But they could incur additional costs to gain access to news sites or video streaming services. Consumers could also face data caps similar to how phone plans currently work. With the popularity of cable companies on a steep downturn, it seems not many people would want these kinds of services from their internet providers.

Many supporters of the FCC's plan to remove net neutrality regulations argue that this is nothing to worry about. After all, these rules were only put in place in 2015. Before that, we still had the free and open internet we know today. Competition between different providers will show these companies what customers really want. Additionally, several internet providers (including AT&T and Verizon) have already issued statements supporting an open internet in some way, shape or form.

In theory, competition would be a possible avenue for consumers to exploit. But that won't quite work in practice. This is because broadband internet providers have virtual monopolies set up around the country. In 55 percent of the United States, there is only one internet provider available. If you want internet, you have to go through that company. End of story. This leaves consumers without a lot of bargaining chips. And this situation likely won't change any time soon. It is prohibitively expensive to set up any kind of wired broadband network. Verizon spent $20 billion on its FIOS network and that only covered a few suburbs in the Northeast and Los Angeles. Without true competition, it will be hard for consumers to protest or refute their service.

If internet providers decide to create “fast lanes" or comprehensive packages similar to a cable provider, customers will have no choice but to pony up the extra cash. The internet is essentially required for all kinds of tasks from job searching to paying bills to shopping. Consumers might have to pay more just to access sites like Amazon or a portal used for job applications. These hurdles would cause customers to drastically change their behavior. Agree or disagree, removing net neutrality rules would cause massive ripples through society and the economy.

Related Articles Around the Web
net neutrality

New York's flagship Lord & Taylor building is closing to make room for WeWork

Getty Images

Over a century ago, New York City's iconic Lord & Taylor building opened its doors. It has always been a monument to traditional, old-school retail. The building on Fifth Avenue in Manhattan was even declared a city landmark a decade ago. But on Tuesday, Hudson's Bay — the company that owns the department store chain — announced that it would be selling the building to seven-year-old start up WeWork. This sale is indicative of changes in an evolving economy.

WeWork's office-sharing model is helping to re-invent the concept of work space. Small and mid-size businesses can rent office space at a WeWork location. The company also aims to humanize work. They believe CEOs can learn from each other and that offices should have all the comforts of home. Hudson Bay's plan to sell the space to WeWork for $850 million reveals the economic value of co-working space over traditional brick-and-mortar retail space.

There are plenty of stories blaming millennials for the downfall of department stores and many other things. But millennials aren't making economic choices based on the intention of sinking long-established businesses. The failures of traditional department stores only demonstrates their lack of flexibility. These aging industries have not adjusted to the new culture millennials are bringing to the economy.

In the short term, these changes can seem negative and harmful. The effects can be widespread, resulting in thousands of lost jobs. But in the long term, these changes are natural and expected. There were major shifts during the Industrial Revolution or during the Dotcom boom of the '90s. And now, we are in the midst of a digital revolution of sorts. As a result, the culture is changing once again.

Millennials have different values from the generations that came before them. They have grown up with computers and mobile technology so they are used to convenience and ease of use. Traditional department stores are built to encourage as much purchasing as possible. Unlike generations before them, millennials often value experiences over items. When they need something, it makes more sense to buy it quickly online rather than sit through the sales pitch of a clerk. However, millennials are spending more than previous generations on activities like dining out and movies.

Another way to win over millennials is with lowering friction at check out. Starbucks is winning over customers with their customer loyalty app that makes paying as easy as waving a phone. The more stores support Apple and Samsung pay, the more millennials will want to shop there.

Soon, millennials will have more buying power than any other generation group. If businesses want to survive, they need to adjust to their desires. Millennials want customer experiences tailored to their preferences. Personalized experiences make them feel valued and wanted. They frown on general catch-all phrases and spiel. Showing attention in-store or through social media will create loyalty in millennials. Businesses should leverage their customer data to achieve the perfect personalized experience for these up and coming customers.

From Your Site Articles