Amazon has just proven a contention of Karl Marx’s, that it is competition which produces higher wages for the workers. This isn’t actually just from Marx which is why he got it right – the bits he did get right generally being lifted from elsewhere. It’s also one of those bits of economics which is obvious even if all too few do manage to grasp it.
When Amazon raised the wage it was willing to pay it got more people applying for jobs. From which we can gather two things. One being that standard economics works, those supply and demand curves do describe reality. There are more people willing to work in an Amazon workhouse at $15 an hour than at $12. Supply increases as price does. We can also say that there’s no monopsony in low end labour markets in the US. For if there were then we’d not see this result. The only major argument in favour of higher legislated minimum wages is therefore incorrect – for that only potentially correct argument is that there’s a monoposony there.
Excellent therefore:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] One of the most important takeaways from Amazon’s 2018 fourth-quarter and full-year earnings report, released Jan. 31, had little to do with the usual financial results. Amazon disclosed in the report that it received a record 850,000 work applications for hourly jobs in the US in October 2018 after announcing it would raise its minimum wage to $15 an hour starting Nov. 1. The company said that was more than double its previous record for job applications received in a single month. [/perfectpullquote]As to Karl and The Beard. He said that if productivity rose, if profits rose, then wages would too. Or, they would in the absence of a reserve army of the unemployed. For the capitalist needs labour to be able to make his profits. If those potential profits rise then he’d like more labour to make even more. But if all are already working then he’s got to tempt the desired labour away from other jobs. He does this by raising the wages on offer.
In a low to no unemployment environment wages rise as productivity does. Which is exactly what Amazon has just shown us. In order to get the labour they desire in a low unemployment market they’ve raised wages. And thus got the labour they desire.
Standard economics works. Which shouldn’t be all that much of a surprise, as it became standard because it works. Even as all too many struggle with it simply because they don’t like the implications.