Attacking Amazon, Bernie Sanders Ignores the High Cost of Low Wages
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Ludwig von Mises saw through Bernie Sanders before there was Bernie Sanders. Mises published Socialism in 1922, while the future Sen. Sanders didn’t wriggle into the world until 1941.

Mises observed that wealth creation is what gives socialist demagogues like Sanders life. Which means Mises could have easily predicted Sanders various attacks on Amazon, including his latest.

Just this week Sanders launched an investigation into how Amazon pays its employees. Readers can probably guess where Sanders stands. Amazon, a corporation with a $1.3 trillion market capitalization, must be underpaying its warehouse workers. Except that market realities belie Sanders’ emotion. Think about it.

As the New York Times reported back in the 2010s, Amazon reached 300,000 employees faster than any public company in history. Of course, if the compensation offered by Amazon had been subpar, it’s safe to say the Times wouldn’t have reported what it did. Facts are stubborn.

At present, Amazon employs somewhere north of 1.5 million. And it does so at a time of low unemployment in concert with a great deal of competition for available workers. None of what’s been written associates with exploitative pay. Quite the opposite if we’re being realistic. Underpaid or exploited workers don’t tessellate with the world’s richest, most commercially dynamic country.

Sanders and his partisans would logically respond that with Amazon, it’s about more than compensation. According to a Washington Post accounting of the senator’s probe, Sanders “demanded information about the company’s ‘systematically underreported’ injury rates, employee turnover, productivity targets and adherence to federal and state safety regulations.” Injury rates and safety will be addressed first.

Allowing for the high likelihood that Sanders is well overstating Amazon’s demerits in both areas, it’s worth pointing out that the surest sign that Amazon relentlessly pursues improved warehouse conditions can be found in the number of warehouse employees in its employ. Which, when you think about it, is tautological. To presume that Amazon management is blasé about worker safety is to presume that it just hires in order to hire, and is indifferent when hires go down due to injury. Except that Amazon can’t be indifferent to worker safety, and the proof once again is in the number of warehouse workers in its employ. Why employ what is routinely sidelined?

All of which ideally answers the question about Amazon adhering to federal and state safety regulations. Amazon almost certainly exceeds federal/state requirements not because the company is populated by angels, but because it wouldn’t go to the extraordinary expense of hiring what’s rendered idle by a lack of safety.

What about “productivity targets”? By all accounts, Amazon demands a lot of its warehouse workers. Put another way, the rich are different from you and me. Work at a trillion dollar company is more demanding than toil at one that isn’t. Some don’t measure up, thus expensive turnover.

Still, it’s crucial to point out that some don’t measure up not because Amazon isn’t trying. Indeed, Amazon’s critics clearly want it both ways. They claim warehouse work is too stressful out of one side of the mouth, only to claim Amazon is trying to automate away warehouse work out of the other. Well, which is it?

The answer is likely neither. Amazon invests heavily in the automation of certain aspects of warehouse work so that its existing employees can operate even more productively.

Why would Amazon do that? Because low-paid workers are very expensive, and it would really be expensive for Amazon to underpay hundreds of thousands of workers. Get it?

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors ( His latest book is The Money Confusion: How Illiteracy About Currencies and Inflation Sets the Stage For the Crypto Revolution.

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