Quote:
Originally Posted by DuckieTigger
I don't see the problem. They used to undercut everybody else to grab marketshare, right? Why couldn't they do that again? Except this time they are not lowering the prices, but keeping the prices the same as if nothing happened. Don't worry, it will be only temporary until everybody else is forced to increase their prices after Amazon out of the goodness of their heart successfully lobbies for increasing all competitors wages as well.
That is how you stick it to the politician.
|
Even better for them: with a tightening job market, they were going to have to raise wages for the temps anyway. By moving ahead of their competitors they get first crack at available labor this holiday season. Competitors will either have to make do with lower ranked labor or face a shortage.
http://www.latimes.com/business/la-f...004-story.html
Quote:
Here's how wage analyst Sylvia Allegretto, a labor economist at UC Berkeley, put it in the Washington Post: "We have a tight labor market, and these are tough jobs with high turnover rates. You add in that Amazon is competing for workers, and it makes sense that it is raising wages."
Once the labor market hits full employment — an all too rare occurrence in recent decades — even employers of the magnitude of Amazon have to kick up pay to hire and keep the workers they need. Economists call demand for labor "derived" demand, as it is derived from the consumer demand for the goods and services workers produce. Such demand is strong right now, and companies either staff up to meet that demand or leave profits on the table.
|
Market forces alone would have moved them higher anyway but with the offset the net impact is reported at 1% whereas for the competition the impact will be much higher. Revenue growth can offset the 1% without impacting stock growth. Without a comparable offset, the impact will be higher on the competition. Walmart going to $11 was going to cost them $300M--going to $15 would add even more on top of that. For Amazon it's estimated at a billion before the offset. Walmart is not going to enjoy a billion increase in costs. Other competitors can't even dream of adding even a fraction of that.
The real driver is 4% unemployment, not political pressure.
But letting the politicians take credit was really useful.