State regulation of fair labor conditions for workers across the country is implemented by establishing the minimum wage, which postulates the possible minimum wage: a rate below this value is illegal. According to Herrera (2021), the state minimum wage for 2021 was $7.25 per hour. Against this background, Amazon’s raising the minimum wage to $16-20 per hour, nearly three times the minimum wage, sets an exciting precedent for discussing the relationship between commercial strategies for human resources struggles and government regulation of wages. The essence of the government setting the minimum wage is clear — the authorities are fighting for fairness and the well-being of the economy and seek to reduce national unemployment, according to Chapter 2. In particular, raising the minimum wage intensifies the labor force because more unemployed people become interested in better-paying jobs. In other words, the government shows concern for the population and the country’s economic growth by creating conditions for more employment among residents. Economic growth, in this case, is mediated by an increase in GDP due to an increase in the number of working people, a reduction of unemployment, and savings on social expenditures due to a change in the status of a non-working but non-disabled individual. In addition, the increase in the minimum wage is also explained by rising inflation: in conditions of rising prices of goods and services and the simultaneous depreciation of money, an increase in the minimum wage ensures that the pace of economic degradation matches the financial capabilities of the consumer.
Amazon’s similar but different strategy of raising the “minimum wage” has a different goal. As a private company, Amazon is not primarily concerned with the social well-being of the population but with the multiplication of its capital. Investing in human resources — the primary tool of operational efficiency — is the strategy that Amazon chooses. From this perspective, raising the minimum wage to $16 to $20 an hour aims to attract more workers and strengthen its production capacity. In a highly competitive workforce, Amazon has to choose this strategy to maximize its operational capacity and compete for employee inflows. In this case, as Herrera reported, industry competitors are held hostage to this strategy and are forced to raise their hourly rates to remain viable (2021). This leads to a growing labor market, the rules that Amazon sets.
Thus, the national minimum wage increase and Amazon’s minimum wage hike are implemented similarly but have different focuses. When Amazon is interested in the growth of its capital and competitiveness, the government implements a function of protection for the population’s welfare and overall economic growth. Moreover, Amazon uses a more aggressive strategy, forcing competitors to raise the minimum wage; the government also implements this, but the increase in the minimum wage is not aggressive but rather reactive.
Reference
Herrera, Sebastian. (2021). Amazon emerges as the wage-and-benefits setter for low-skilled workers across industries. The WSJ. Web.