September 07, 2018
Eileen Appelbaum
The Hill, September 7, 2018
Sen. Bernie Sanders (I-Vt.) has once again demonstrated that he understands the struggle facing millions of low-paid workers.
On Wednesday, Sanders introduced legislation targeted at Amazon that illuminates the contradiction at the heart of America’s long economic expansion — workers paid too little to put food on their tables are building successful, cutting-edge companies that are making their owners rich.
Recent tax cuts only add insult to injury, making clear the role of public policy in redistributing income upward.
If Amazon were to pay its lowest-paid workers a living wage — enough to get by on without turning to food stamps to feed their families — it would be a game changer. The effects on the public dialogue, the behavior of other big companies and the lives of workers, Sanders argues, would be profound.
Amazon’s response was swift. The company maintains that it has created good jobs. In a statement, Amazon said, “In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. That’s in addition to our full benefits package.”
But bonuses wouldn’t be an incentive if everyone got them, and stock goes to employees who last long enough to qualify for them. The reality for most Amazon warehouse workers is very different.
The company recently placed an ad at Glass Door for a direct-hire Warehouse Associate in Aurora, Ill. Glass Door estimates the jobs will pay $9 to $12 an hour. Amazon offers benefits to “qualified” workers on its payroll, but the high stress of long hours standing on your feet and frequent bending means that many workers don’t last long enough to qualify for them.
Many warehouse workers are in temporary jobs. When Amazon opened a new distribution center in Joliet, Ill., Integrity Staffing Solutions set up shop in town to handle hiring. The jobs were temporary and paid up to $13.50 an hour. Joliet city councilors were frustrated that they couldn’t learn whether the jobs would be full- or part-time.
Low wages mean large numbers of workers employed in Amazon warehouses must turn to the Supplemental Nutrition Assistance Program (SNAP), the food stamp program, to feed their families. In Arizona, public data suggests that one-in-three workers on Amazon’s payroll rely on SNAP for food. In Pennsylvania and Ohio, it’s one-in-10.
The jobs are dangerous as well. Amazon’s fulfillment center in Robbinsville, N.J. was cited by the Department of Labor’s Occupational Safety and Health Administration for failing to report 26 work-related injuries and illnesses and for exposing employees to risk factors “including stress from repeated bending at the waist and repeated exertions, and standing during entire shifts up to 10 hours, four days a week and sometimes including mandatory overtime shifts.”
The National Council for Occupational Safety and Health, a nonprofit organization, put Amazon on its 2018 list of “dirty dozen” companies for what the organization said was a “disturbing pattern of preventable deaths” — seven workers died between 2013 and 2017.
Sen. Sanders has identified real problems low-paid workers face. But his proposal to tax Amazon and other large low-wage employers to recoup what the government spends on food stamps is seriously misguided. It buys into the false notion that America can’t afford programs that benefit its people without raising taxes to pay for them.
Republicans know that a government with its own sovereign currency can pursue the policies its constituents want without worrying that it will run out of money.
The current administration has delivered huge tax cuts to its wealthy backers and promised the military more than $1 trillion to upgrade nuclear weapons over the next 30 years, with no worry that America can’t afford to spend the money.
Democrats have said they are ready from “Day 1” to fight for the people. They want to expand access to affordable health care and spend $1 trillion on infrastructure. Sanders himself has proposed a “Medicare for All” solution to the nation’s health-care crisis that many Democrats now support.
None of this will be possible if Democrats paint themselves into the austerity corner and insist Congress must raise taxes if it wants to put in place policies America’s working families elected them to enact.
“Pay-go” rules — rules that say new programs need to be paid for with tax hikes or cuts in other programs — prevented Democrats the last time they were the majority party in Congress from implementing policies to help workers and communities devastated by the offshoring of manufacturing or the collapse of the housing bubble regain their economic footing.
They should not once again buy into the false narrative that taxes need to be raised before government can spend. There are limits to spending on programs, of course, but these are not set by tax revenue. They are set instead by available resources — workers, equipment, natural resources that can be put to work.
When resources are fully employed, further attempts by companies to expand production or government to expand programs will translate into inflation rather than higher GDP.
At that point, tax increases to reduce demand and bring spending in line with resource capabilities are in order. Rolling back Trump administration tax cuts that benefit the wealthiest would be a good place to start.
Eileen Appelbaum is co-director of the Center for Economic and Policy Research and the co-author of “Unfinished Business: Paid Family Leave in California and the Future of U.S. Work-Family Policy.”
