Amazon is raising its minimum wage to $15 on the first of November for American part-time full-time, temporary and seasonal employees.
Amazon Minimum Wage
They’ve also said they’ll lobby Congress to push for a similar bump federally. Small Business Trends contacted Small Business & Entrepreneurship Council (SBE Council) president and CEO Karen Kerrigan to find out what all this means for small businesses.
Painting a Picture
Kerrigan started by painting a picture of what she feels is Amazon’s attempt to undermine their competition by trying to sway policy.
“Many of the small business owners I have talked to think Amazon is using its political influence to push for a policy that will undermine small to mid-size business competitors. These entrepreneurs do not like that at all,” she wrote to Small Business Trends in an email.
Common Business Tactic
Kerrigan feels that while Amazon can afford to give their employees a bump to $15 an hour, many small business owners allocate raises based on whether they can afford them.
She points out what Amazon is doing is a common business tactic used by bigger players to stamp out their competition with smaller budgets. In a recent press release, she underlined how important costs and margins are and that any mandated wage hike will hurt many small businesses.
She also pointed to the general negative reaction from colleagues and makes a prediction.
“The reaction by most of the small business community has been pretty harsh,” she writes in response to the Small Business Trends questions. “This is not a feel-good campaign on their part, but a pure business strategy to use government to take action to raise labor costs on all businesses. This will not make small businesses happy with Amazon.”
Rising Minimum Wage
The issue of a rising minimum wage isn’t new. In fact, 20 states will give these workers a mandated boost in 2018. New York, Washington and places in California have taken the lead and gone to a $15 benchmark already.
Kerrigan says the issue is best debated at the local level so entrepreneurs looking to break into markets and small business with tight margins get a break.
“If business owners are getting hit hard, for example, in Seattle or San Francisco by the big wage hikes that have happened in those cities, they can more easily relocate, although this is still often difficult.”
Small Business Sails
Not surprisingly, Kerrigan says Amazon should back away from using their political clout to take the wind out of small business sails.
“It is great that Amazon’s employees received wage increases – that is fantastic news. At the same time, we’ve heard they are cutting their bonus program,” she writes offering a final prediction.
“If they continue to push on the lobbying front, I think it will serve as more fuel to the buy local, support Main Street movements.”
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