Tuesday, December 10, 2019

A thought experiment

Riffing on the theme of the $11 billion that Amazon had in tax-free profits last year, and adding the couple of thousand that they received in tax rebates, I decided to see what would happen if they lowered their target quotas for the warehouse by 10 percent. According to the information that I could find, they have about 125,000 full-time warehouse employees. That might not be totally accurate, but we're doing back-of-the-envelope type of estimates. That means they would have to hire another 12,500 warehouse employees to make up for the lowered productivity.

Now, we're not going to include the cost savings they would incur from not having as many injuries, replacement training time, administrative savings, etc. Those are real, but too hard to calculate for our purposes. So, based on 12,500 new employees, at $15/hour, 40 hours/week, 52 weeks/year, they would incur an extra $390 million in wages. Now, for a normal corporation, that would be a burden, but all we did with Amazon is wipe out their tax credits. They still make $11 billion in profit. Probably more, because, as I said, the hidden costs of injuries and replacements would be minimized.

Now, just for the sake of "what-if," suppose they raised the wages of every warehouse employee by $5.00. What would that cost them? Well, around $1.5 billion. Again, for a normal corporation, that would be the difference between profit and loss. But for Amazon, it would lower their tax-free profits to a cool $9.5 billion. I think they could survive on that, although it might be tough. . .

Perhaps with that $9 billion, they could next consider being humane to their "last-mile" providers? I know, I'm asking for them to be human, and their algorithms aren't human. But, every algorithm has its original in a human presupposition. Algorithms aren't amoral. Think about that for a while and then buy local when you can.

No comments: