Amazon has already devastated Main Streets and destroyed mom and pop businesses by the thousands, but that’s no reason for it to stop. For its next assault on small retailers, the corporate titan will call in reinforcements: the Democratic Congress and the Biden White House.
“It’s about time America raised the federal minimum wage,” Amazon is declaring in advertisements aimed at Washington’s ruling class. Amazon has placed these ads in Axios PM, Punchbowl PM, and probably other newsletters and publications. The latest ad in Punchbowl PM reads, “At Amazon, we raised our starting wage to at least $15 an hour in 2018 because it’s good for workers, good for business, and good for communities. It’s why we support raising the federal minimum wage.”
In other words: We found that higher wages worked best for us but that lower wages work best for some of our competitors. So we want to outlaw our competitors’ business plans.
It’s regulatory robbery, and it doesn’t merely hurt Home Depot.
Amazon says higher wages help communities, and that’s surely true. But when Congress outlaws low-wage jobs, which is what Amazon is calling on them to do, that hurts communities as well.
Minimum wage jobs are mostly at small and very small businesses. “Roughly half the minimum-wage workforce is employed at businesses with fewer than 100 employees,” a 2014 study found, “and 40% are at very small businesses with fewer than 50 employees.”
So the corner store that somehow has survived the pandemic and decades of competition from Amazon may pay a local college student $7.25 an hour to stock shelves. If you outlaw that job, you may help Amazon, but you also hurt that college student and that mom and pop. What’s more, you hurt the community.
Brick-and-mortar stores on Main Street draw people to Main Street. When people walk up and down Main Street, they bump into neighbors, they stop in at the coffee shop. Their children run into other children. These unplanned and serendipitous encounters are the building blocks of tight-knit communities.
The car-centric, inhuman sprawl caused by Robert Moses, Walmart, zoning laws, and yes, Amazon, makes it easier for most people (those with cars and who don’t have car-seat-aged children) to shop and harder for others (those without cars and who have to buckle the baby, unbuckle, and rebuckle, re-unbuckle, et cetera). It has also eroded communities by reducing how much people know their neighbors.
Stronger community isn’t some quaint concern. The collapse of community has helped cause America’s current crises, such as addiction, the retreat from marriage, men dropping out of the labor force, local economies’ collapse, extremism, conspiracy theories, and deaths of despair.
And outlawing low-wage jobs often amounts to outlawing jobs for high school and college-aged individuals. Teenagers are eight times as likely as those over 25 to earn minimum wage. Making it illegal for most teenagers and young adults to work deprives these would-be-workers of more than money. It also robs them of experience, connection to community, and a path to the American Dream.
Teenage labor force participation is one of the best predictors of upward mobility for children, according to economist Raj Chetty. While minimum wage laws often set lower rates for minors, still, they are likely to bar some jobs for 18- and 19-year-olds and even some 14-through-17-year-olds.
Again, the businesses employing young adults are disproportionately likely to be small businesses and, in turn, competitors to Amazon. Amazon knows that a higher federal minimum wage will not affect Amazon’s costs but will impose costs on its competitors. A lower minimum wage doesn’t prevent Amazon from paying $15 an hour. It just allows its competitors to survive.
Amazon and other giant corporations often lobby for costly labor regulations and mandates in order to kill their competitors. Uber has recently argued that states should require all gig companies to provide medical and disability coverage for injuries incurred on the job, and Walmart was an early supporter of Obamacare’s employer mandate in health insurance.
Whenever government is getting bigger, that’s good news for big business and typically bad news for mom and pop stores. This is a good way to understand why big business so overwhelmingly favored Joe Biden in 2020: They know they can afford the bill, while their smaller competitors cannot.
