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Tuesday, May 14, 2019

Bezos and his $15 an hour trick

In October, Jeff Bezos raised pay for 250,000 warehouse workers at Amazon to $15 an hour, a surprise move that received praise from liberals. Last month, he taunted competitors to emulate him.

But this week we leaned the rest of the story. The raise is a stunt. He plans to replace those workers who make a combined $3.75 million an hour.

Not with H1B workers who would cost less and speak broken English. Not with illegal aliens who speak with no English. But with robots who just don't speak.

Bezos with his $15 an hour stunt is pushing an unsustainable liberal fantasy that dangerously raises people's hopes before dashing them against the backs of a robot army.

Fortune magazine reported on April 11, "U.S. retail giants woke up Thursday to yet another challenge from Inc. Chief Executive Officer Jeff Bezos, this time with a call to match his company’s recent increase to a minimum wage of $15 per hour.

"'Do it! Better yet, go to $16 and throw the gauntlet back at us,' Bezos wrote in his annual shareholder letter. 'It’s a kind of competition that will benefit everyone.'

"The taunt is coming from a company that has been under a lot of pressure to improve working conditions worldwide. When Amazon pledged in October to raise pay to at least $15 an hour in the U.S., the e-commerce giant also eliminated monthly bonuses and stock awards. Amid a tight labor market, Walmart Inc. and Target Corp. also have increased wages and benefits.

"'We are finally seeing the beauty of tight labor markets,' said Dave Cooper, a senior analyst at the Economic Policy Institute, a think tank. 'And if they can force their competitors to pay more, that’s extra dollars that workers will spend.'"

A tight labor market.

Now we know why Bezos has such a deranged and ugly hatred of Donald John Trump.

Our president is responsible for that tight labor market because he is reducing illegal immigration and unfair foreign competition. Companies are hiring Americans again.

In so doing, President Trump has brought prosperity to America, which every liberal despises, especially the rich ones who see workers not as humans but as an expense.

And so the robots come.

PC Magazine reported, "Each robot packer can handle up to 700 orders per hour, and unlike their human counterparts, do not require regular breaks, never go home, and can't get sick. Worryingly for workers, one robot at a warehouse means 24 human roles are no longer required. If the same robot was rolled out to each of Amazon's US facilities, that would be 1,300 roles removed.

"Each robot packer costs $1 million plus running expenses, which sounds like a lot until you consider Amazon will recoup the money spent in just two years. Those savings come from employing fewer people, but also the efficiency and low maintenance costs such a machine enjoys."

So one robot equals 24 workers which means in a year and a half, the robot has paid for himself.

The $15 an hour trick was a going away present for those jobs about to be lost to a robot.

This also was a public relations stunt aimed at helping Democrats pass a national edict that all companies pay at least $15 an hour.


But now we see the Bezos move for what it was.

I thank him for helping to kill the $15 an hour mandate.


  1. The stunt helps Bezos drive up the labor costs of any competitors which makes his robots even more competitive. A business bait and switch strategy.

    Many Democrats are now contemplating the fact that the minimum wage has had a devastating impact on what was once their core constituency, and that their newer constituencies may end up being hit as well (kiosks at starbucks? robots making lattes? where does this all end?).


    1. I saw that. Somehow I'm thinking the failure rate is going to be 90%+, like all other small bidnesses. But, for a smarty, it looks good and I love vans ;o) I'm retired, dammit.

  3. The Jetson’s robot Rosie coming to a warehouse near you.

  4. Amazon has been at the forefront of robotics and being super efficient. They bought a robotics company a couple of years ago for automation, that basically replaced inventory pickets. Now amazon is targeting the packers. Amazing what Amazon has done, and how fast they can ship.

    Another area that is currently mails, is the packing / unpacking of containers / trucks. Automation in that area is coming.

  5. They can't get sick. Sure they can and when they do it's not pretty.

  6. AOC was right!! viva la banderilla rosa!

  7. I have thought that the push with AI and robotics will eventually lead to no jobs for humans other than those at the very top of the pile.
    Yet, when all the businesses, even construction and eventually repair businesses go to near full automation, who is going to buy the things they make? Who will need to have an office when there are no real customers for goods because the jobs are gone?

    I understand it to a point from a business sense. Though failures of these devices can be catastrophic, they are rare, and error rates are far lower with them than humans doing the job at a slower rate.

    Where does it leave us? Engineered out of a job with fewer prospects for work. How do you support yourself and family? Are you given an allowance to live off of, with limits on home sizes and family sizes? The Government would be the main employer. Even war goods are going toward drones, with more limits to casualties, so the only point where you stop a war is when you run out of robots to fight them.

    It seems pretty bleak for people in the future... yet, this is progress... right out of a job for most people.

    1. Everyone's future in flesh is bleak.

      To be reminded of the real nature of Creation is the bright side.

  8. But, but if we get a tractor to pull the plow what will my wife do?

    1. That Depends.

      Does your plow still work?

      And will she let you pull it?

  9. And then the day comes, when it must, and the Amazon warehouse robots rise up to fold, crush, spindle, and mutilate humanity.

    -Mikey NTH

  10. I stopped buying from Amazon about a year ago and don't plan to buy from them again. I encourage everyone to do the same. I don't want to make Bozos richer by even one dollar.

  11. Eventually there will be robots to remove the humans, dead or alive.

  12. Every union contract has boiler plate language that when minimum wage goes up, union wages go up in lock step. Unions don't care about minimum wagers whether they are replaced or companies raise prices. You have a choice of using Starbucks or ford. You don't have choices of DMV or irs. Most states and cities struggle under present wage and pension costs. Imagine them doubled or tripled?

    That's why unions fund these scams. Pandering and posturing self righteously of how they care about "victims" while seeking to victimise everyone equally. And vigorously.

  13. First, it is not a "robot" packer. It is a non-robotic automated packer. I interviewed a vp from cmc last month at the ProMat trade show in Chicago for Packaging Digest.

    It is a really cool machine that makes labor more productive. It still requires people.

    The big savings, more than labor, is materials. It uses about half the corrugated of a normal box. It uses no padding or stuffing at all.

    Because there is no box, the final package size is 25% or more smaller saving shipping and handling costs.

    This is really revolutionary system. Amazon is not the first to use it.

    I also talked to another, American, (CMCis Italian) company that makes a similar system that Amazon is also buying. I forget the name at the moment.

    Automation is what makes workers productive enough for their labor to be worth $15.

    Just ask Henry Ford. He invented the Toyota Production System and that allowed him to employ tens of thousands of workers at the equivalent of $25/hr today (double the prevailing wage)

    Henry was an absolute fanatic on automation: "NEVER employ a man to do something a machine can do"

    He knew what he was talking about.

    John Henry

  14. Amazon has been into robotics for a long long time.

    To the extent that they bought Kiva Robotics in Mass 7 years ago.

    Now Amazon Robotics, they build thousands (tens of thousands? ) of robots annually for Amazon.

    Actual "robots".

    John Henry

  15. Neither company mentioned they were working with Amazon.

    Absent a public announcement, that's to be expected.

    John Henry

  16. Don,

    For a more local example think of coal miners.

    They used to use pick and shovel to mine the coal.

    Now they use big chompers and one man can produce as much as a hundred hand miners.

    A lot fewer miners underground but those left make a lot more.

    Is the population of WV better or worse off overall because of mine automation?

    A lot fewer coal mine and mining related deaths, too.

    John Henry