Amazon’s announcement of a $15 starting wage continues a trend of major companies, including Target and WalMart, voluntarily raising their minimum wage. Unfortunately, this positive development was soured by news that it would lobby for an increase of the federal minimum wage, which would cause business closures, job losses, and slashed hours across the country.
Amazon has no excuse to be ignorant of these negative impacts. In their hometown, Seattle’s $15 mandate has caused employees to lose $125 a month, on average, from lost work hours, in addition to thousands of fewer entry-level jobs. The story is similar in San Francisco, the first major city to mandate a $15 minimum wage hike. Home to a once vibrant restaurant community, economists from Harvard Business School, using data from Yelp, identified a 14 percent increase in Bay Area restaurant closures associated with each one dollar increase in the minimum wage.
Activists interested in securing wage increases should know that employees are already earning them. A study by economists from Miami and Florida State Universities disputes the claim that minimum wage employees need government intervention for wage increases. Almost two out of every three minimum wage employees will receive a raise within a year of starting, and the share of employees earning the minimum wage tends to decrease in the years following minimum wage hikes (only 2.3 percent of workers earn the minimum wage – this number has been decreasing since 2010).
Amazon’s senior vice president for global corporate affairs, who happens to be the former Press Secretary for President Obama Jay Carney, said Amazon would push for a minimum wage increase that will have a “profound impact” on people and families from coast to coast. Hopefully Congress will see that what doesn’t work in Seattle and San Francisco is unwanted in Shreveport and Sioux Falls.