Posted: March 6th, 2023

What are positive and negative effects of Amazon raising its minimum wage to $15 per hour on its employees, total revenue, and other companies and their employees?

Amazon’s decision to raise its minimum wage to $15 per hour has caused a ripple effect; the move, while generally viewed positively by employees, could have an effect on Amazon’s overall revenue, as well as other companies and their respective employees.

The most obvious positive effects of this move are that Amazon’s workers will be able to earn more money for their labors and support themselves better (Ngai & Manning 2020). This increase in wages is likely to lead to higher morale among the company’s workforce given that they would no longer feel undervalued or taken advantage of. Higher employee satisfaction can also lead to greater productivity due to improved motivation (Kashtan 2018). Additionally, with higher wages come fewer turnovers, leading to a more stable workforce and potentially lower training costs which could offset any initial losses (Rouby 2019).

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The most negative consequence of Amazon’s new policy is potential loss of profit for the company. With increased wages comes increased labor costs which can cut into profits if not properly managed (Guevara & Toledo 2011). To remain profitable despite this change, Amazon may need to decrease expenses from other areas such as research and development and marketing campaigns. This could result in fewer product launches or reduced marketing efforts which would negatively affect sales revenues (Alam et al 2018).

What are positive and negative effects of Amazon raising its minimum wage to $15 per hour on its employees, total revenue, and other companies and their employees?

Another possible side effect of Amazon raising its minimum wage could be a domino effect in other businesses throughout the industry who may now be forced by market pressures raise their own minimum wages if they hope attract top talent away from Amazon. Businesses who choose not comply risk losing out on valuable employees who may prefer working somewhere else where they can make more money – even at the expense of their current employer’s profitability margins (Cappelli 2016). This phenomenon has already been observed within certain industries such as fast food restaurants following similar moves like those made by Amazon and it creates an interesting conundrum for small businesses trying to compete with large corporations paying above-market salaries without sacrificing too much profit margin potential (Chen 2017).

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In conclusion, while there are many potential positives associated with Amazon increasing its minimum wage for all workers – including improved employee morale and productivity – there are also risks involved in terms of decreased profits from having higher labor costs. These risks must be carefully weighed against any potential benefits before enacting drastic changes like this one. Similarly, smaller businesses should take caution when competing with larger corporations offering above-market salaries since doing so may prove difficult without cutting into profits too deeply or driving up prices significantly – both outcomes which carry their own set of disadvantages.

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