Of course Amazon supports a $15 minimum wage

When lawmakers reintroduced the Raise the Wage Act, which would raise the federal minimum wage to $15,  Amazon Senior Vice President of Global Corporate Affairs sent a letter to Congress in support of the bill.

It is quite possible that the Amazon corporation has good intentions. But that is something we can never know. However, a couple of things make Amazon’s support for a $15 minimum wage unsurprising and also worrisome.

First, Amazon already raised its minimum wage to $15. This means that the company won’t be affected by this change. Instead, small businesses that cannot afford to pay $15 will have to cut employment or go out of business.

Furthermore, Amazon generally has a higher capability to absorb higher labor costs than most other companies. What lawmakers need to worry about are the small businesses — the ones that operate on thin profit margins and low cash flows.

Minimum wage hikes, like most regulations, tend to hurt small businesses more than bigger ones. So, it is very possible that big companies like Amazon will gain from a $15 wage hike at the expense of numerous small businesses. Big businesses, like Amazon, did not face disruption during the pandemic. In fact, most of them soared when lockdowns forced small “non-essential” businesses to close.

All in all

There is little, if anything, that Amazon stands to lose by supporting a $15 minimum wage. A high minimum wage will instead crush Amazon’s competition — small businesses — and affect low-skilled and low-wage workers who comprise those businesses. Intentionally or not, Amazon is supporting a bill that has the potential to decimate its competitors.

We should especially be worried about the minimum wage when we consider how integral small businesses are to the economy. In 2020, for instance, the Small Business Administration reported that small businesses made up 99.7 percent of all businesses with paid employees. Additionally, small businesses employed 47.1 percent of all US workers and were responsible for 65 percent of new jobs created.