Amazon And Bernie Sanders Now Have One Big Thing In Common

By Patrick Moorhead - March 19, 2021

At first blush, you might be hard-pressed to find one thing on which the progressive wing of the Democratic party and Amazon, the corporation, agree. Vermont Senator Bernie Sanders has railed against major corporations such as Amazon and its “wealthy” CEOs (or, in Jeff Bezos’ case, recently departed ex-CEO) for many years. One perhaps surprising place where the two share common ground is in the push for a minimum wage increase from $7.25 an hour (where it’s been stuck since 2009) to $15 an hour—a considerable jump that some advocates say will do much to boost the economy and the American worker. Some say otherwise, but imagine trying to support a family of four on the current minimum wage.

As things stand right now, it falls to corporations and state governments to raise wages—some do, while many others don’t. That could soon change, however. The $15 minimum wage hike has been in the news a lot lately, with the debate over its inclusion in the Covid-19 relief bill currently shuffling through Congress. This particular effort appears to be hindered for now by the Senate Parliamentarian’s ruling that it falls outside of the purview of what can be enacted through the budget reconciliation process. But the discussion isn’t over—Senators Bernie Sanders and Patty Murray and Representative Bobby Scott recently wrote and co-sponsored a new bill, the “Raise the Wage Act,” that calls for the same increase. 

To get an idea of what this raise might look like in practice, it’s useful to examine the companies who have already enacted a $15 minimum wage. Amazon raised its corporate minimum wage to $15 back in 2018. Let’s look at that wage hike and the impacts seen so far.

Amazon: a wage hike case study

Amazon turned heads in 2018 with the announcement it would be raising the minimum wage for all of its U.S. employees—full-time, part-time, temporary and seasonal—to $15, effective November of that year. Including Whole Foods, this raise immediately impacted over 350,000 employees—a number that has undoubtedly grown with the 275,000 new employees Amazon says it added in 2020 (thank the pandemic-fueled online shopping frenzy). Upon implementation, Amazon says it experienced an instant surge in job applications. One month in, the applications for Amazon’s hourly positions had more than doubled.

For the average person, financial insecurity breeds a lot of stress that can spill over into the workday and affect productivity. For this reason, amongst others, it makes good business sense to pay workers a livable wage. This is a crucial point to make when trying to encourage other corporations to join the push. So far, several big companies have made the same $15 commitment, including Target, Best Buy and Costco. I expect we’ll see more companies jumping on the bandwagon, especially if the federal government fails to enact the hike.

Detractors believe that raising the minimum wage will have adverse effects on the economy. The Congressional Budget Office (CBO) indeed projects that around 1.3 million people could lose their jobs due to the federal legislation, and the businesses hit hardest will be the smaller ones without the cash reserves to back such a raise. According to the CBO, the bill’s potential to boost the economy dwarfs that number—the CBO estimates it will raise the wages of roundabouts 17 million workers and lift 1.3 billion out of poverty.

It’s relatively simple—more money in workers’ pockets means more money will go back into the economy. Amazon employees say they are putting their newfound surplus into local businesses and economies by taking care of the various expenses they’ve been putting off—paying bills, getting cars serviced, perhaps hiring a plumber to fix that pipe that busted during the snowpocalypse. Let’s face it—in a country still reeling from the ongoing Covid-19 pandemic, both workers and the economy need as much help as they can get.  

Wrapping up

Since its wage increase, Amazon has been a vocal proponent of raising the federal minimum wage—a chorus that also includes Costco, Best Buy and Target. These early adopters are showing hard proof that these raises benefit workers, the businesses that employ them and the economy as a whole. Imagine trying to support a family of four on $7.25 an hour, and it’s fairly obvious why a raise is needed. Nobody should have to work three jobs to feed their family. I believe it’s only going to become harder to argue against a federal wage hike as more companies like Amazon take it upon themselves to lead by example.

Note: Moor Insights & Strategy writers and editors may have contributed to this article.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.