It’s hard for small business owners not to feel some schadenfreude at Amazon’s current predicament, facing a unionization drive at its Bessemer, Ala. fulfillment center.
Amazon has been the nation’s biggest corporate cheerleader of a $15 minimum wage, which would destroy countless small businesses across the country if implemented. Now that Amazon is getting a taste of its own progressive medicine, don’t expect small business owners or advocates to rush to its defense.
Roughly 5,800 Amazon employees at the company’s Bessemer warehouse are participating in a mail-in unionization vote that ends on March 29.
The Retail, Wholesale and Department Store Union (RWDSU) organizing effort could prove to be the camel’s nose under Amazon’s corporate tent, paving the way for a broader organizing push at the company’s 110 fulfillment centers nationwide. Workers in Seattle are reportedly watching the outcome of the vote for inspiration regarding their own unionization push.
For Amazon, it’s a case of progressive policy whiplash. The e-commerce giant has conducted a major federal lobbying campaign to pass a $15 minimum wage. For instance, Amazon purchased several days’ worth of expensive ad space in Axios AM and Politico Playbook, which are morning must-reads among D.C. political staffers and influencers. The ads brag that Amazon had recently implemented its own $15 pay floor and claim a $15 minimum wage helps communities.
But just because a $15 entry-level wage works for a corporate behemoth with $22 billion in profits last year doesn’t mean it will work for the Main Street convenience store with $22,000. In the real world, a $15 minimum wage would hurt businesses at the worst possible time as they’re trying to recover from the pandemic.
Drive by any suburban strip mall right now to see vast shuttered windows, demonstrating how fragile restaurant and retail businesses can be.
Strong economic and anecdotal evidence — not to mention basic logic — demonstrate that dramatic wage mandates on low-margin employers reduce jobs and kill small businesses. The nonpartisan Congressional Budget Office recently found that a $15 minimum wage would destroy as many as 2.7 million jobs nationwide.
Given the well-documented damage from dramatic minimum wage increases, it seems plausible (or even likely) that Amazon is backing a $15 minimum wage to further destroy its small business competitors and consolidate power. Therefore, small businesses justifiably have no sympathy now that Amazon is on the receiving end of a progressive pressure campaign that threatens its own profitability.
Of course — on the merits — unionization would be terrible for Amazon employees and customers. Rather than employees being given the opportunity to work their way up the Amazon corporate structure, they would likely be subjugated to a soul-crushing seniority system, characterized by small annual pay bumps and zero incentives. Effective employees would have to watch their coworkers who have been there twice as long but are half as productive get rewarded for pay that otherwise would have gone to them.
Unionization would also mean less flexible job opportunities because sclerotic union rules would make it harder for Amazon to staff up for holiday seasons quickly. As a result, popular job opportunities for single mothers, seasonal workers, and others who need flexible work would disappear.
For the privilege of being constrained to this collective bargaining bureaucracy, employees would have to pay several hundred dollars’ worth of dues each year — money that could otherwise go to food, gasoline, or utility expenses.
Amazon has indicated that unionization may force it to reduce employee benefits. Why can’t the company also recognize that a $15 minimum wage would have the same impact on many small businesses?
The lesson Amazon should learn from this unionization drive is that when it comes to left-wing policies, what comes around goes around.
To defeat these policies, businesses — big and small — must stand together in opposition. If businesses don’t hang together, progressive policies will surely hang them separately.
Elaine Parker is President of the Job Creators Network Foundation.