The poverty level for an individual without a family is $12,880. For a family of four, the figure is $26,500. A $15 an hour wage creates an annual income of just above $30,000. Starbucks recently raised the low end of its pay base to $15. Dave Bozeman, vice president of Amazon Delivery Services, recently commented to Reuters that Amazon will keep its base pay at $15. Starbucks and Amazon seem to wonder, at least in public, about why their workers in some areas of the country want to form unions.
[in-text-ad]
If the union movement has done anything over a period that started before the beginning of the 20th century, it is that members and prospective members get better pay and benefits over time. The Starbucks and Amazon labor actions are not based on local issues, although they have been local actions so far.

Jeff Bezos, the founder and board chair of Amazon, is the second richest person in the world. The Starbucks CEO (for the third time), Howard Schultz, is also worth over $1 billion. Each of the companies was built largely on inexpensive labor. Each makes large sums of money and has large cash reserves.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

The argument companies make about unions is that they take partial control of compensation away from management. That is fair enough because it is true. It leaves the question of whether companies should pay a living wage. At this point, Starbucks and Amazon do not support this for all their employees.

The union movements at Amazon and Starbucks will continue to grow, with a great deal of pushback by management. That pushback almost certainly will not work over time, which means management will have been better off using its time more wisely.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.