Progressives’ War on Big Business Hurts Workers
When Amazon announced it would pay all of its U.S. employees a minimum of $15 an hour — more than double the minimum wage — CEO Jeff Bezos called on “other large employers to join us.” No company has risen to the challenge yet, but you can be sure some of them are talking about it. Much of the commentary has claimed Amazon was forced to do this by political pressure or the tight labor market. But as Robert Atkinson and Michael Lind write for Bloomberg, what has been missing from the discussion is that it is easier for Amazon and other large corporations to raise wages simply because these companies are more productive.
Today’s critics of big business argue that the reason large companies like Amazon can pay their workers more is that they have market power and can use it to charge higher prices. But as a rule, the companies’ productivity is what explains their advantage. Instead of trying to raise wages by the dubious and roundabout technique of antitrust, why not just raise wages directly? A national minimum wage will mean higher incomes for millions of workers, and would boost productivity and GDP. If progressives really care about low-wage workers, they should abandon their battle against big companies and push Congress to pass a higher national minimum wage that applies to all employers.