Has Amazon's domination been stymied by a $15 minimum wage?

By Karina MitchellAmazonFOXBusiness

Should the US government dictate how much companies pay their staff?

Mercatus Center senior research fellow Veronique de Rugy and Wall Street Journal editorial page member Jillian Melchior on how Amazon raised it minimum wage to $15 and whether the government should play a role in determining how much companies pay their employees.

Amazon was an unstoppable force until it ran into its biggest nightmare – the $15 minimum wage. The fall out, if you belive them, has been employees that work at Amazon-owned Whole Food Markets who claim they are actually making less money since the minimum wage was raised in November, because their hours have been cut.

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Whole Foods tells FOX Business that such allegations are false, adding “full-time store Team Members worked the same number of hours in January and February 2019 as they did during the same period last year."


Adding to Amazon's woes, the e-commerce giant has suffered another setback. This time, its foray into brick-and-mortar hit a brick wall. The company says it plans to close all 87 of its pop-up stores in the U.S. The move has left many analysts believing the retailer does not have what it takes to excel in physical retail.

FOX Business’ Charles Payne points out Amazon stock has taken a big tumble in recent months, until finding firm ground on Christmas Eve. Since then, however, it has not climbed back to its September 2018 highs, adding the negative ramifications of increasing the minimum wage may have hurt employees, the business and its investors.

So, should the government dictate how much a business should pay employees?

Meracatus Center Senior Research Fellow Veronique de Rugy says when companies raise wages for the right reasons -- including because they are growing and want to retain good employees -- the upside brings with it many advantages, but if a company is “...pandering, effectively, to the political class it runs the risk of being inadequate to the business.”

Jillian Melchior, an editorial page writer at The Wall Street Journal, agrees, pointing out “...any time you mess with the margins in the stock market there are going to be tough decisions,” adding it is the most vulnerable that are usually the most affected.


As Payne points out, however, the surge of companies engaging in share buybacks can create a negative optic if it comes at the expense of paying employees a fair wage, or even the notion of such.

One thing is clear, Amazon’s profitability increasingly stems from its cloud play and web services operations, rather than from its retail business, no doubt eliciting some relief from large and small physical retailers across the country and perhaps impacting the way the behmoth utilizes its labor force.

What do you think?

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