Last week Amazon announced that it would impose a $15 an hour minimum wage for its workforce, including those hired through staffing agencies. This was a huge victory for the labor and community activists in the Fight for $15 campaign, as well as for Senator Bernie Sanders and Representative Ro Khanna, who had recently proposed legislation that would have penalized huge companies like Amazon for paying low wages.
As the world’s second corporation (following Apple) to reach a market capitalization of $1 trillion, making CEO Jeff Bezos the world’s richest person, Amazon had become a symbol of inequality in the country and the world. Its warehouse workers put in long hours, doing highly regimented and grueling work, and often were paid little over the national minimum of $7.25 an hour.
This was the reason that Fight for $15, Sanders and Khanna made Amazon a central focus of their efforts. The decision by Bezos to agree to a $15 an hour minimum wage will not only benefit the hundreds of thousands of Amazon workers who will get pay raises, but it also places pressure on other large employers to similarly raise their wages. In fact, Bezos explicitly committed himself to work toward a national minimum wage of $15 an hour.
While this win shows the power of progressive organizing, there is another side to this issue that should not be overlooked. Bezos agreed to this increase in the context of the tightest labor market in almost two decades. At 3.7 percent, the unemployment rate is the lowest it’s been since 1969.
The tight labor market forced Amazon to raise wages to attract the workers it needed to staff its warehouses. In some places, it may have already been paying close to its new $15 an hour minimum. In this context, the decision to accept $15 as a nationwide floor was much less of a lift than it would have been if the unemployment rate was still over 5.0 or 6.0 percent.
This low unemployment rate is largely possible because of policy decisions by the Federal Reserve Board. Specifically, the Fed decided to hold off on interest rate hikes that would slow the economy and reduce the rate of job creation. This was not an accident. The Fed was responding to political pressure from the Fed Up coalition.
The Federal Reserve Board has historically been excessively responsive to the concerns of the financial industry. This is largely due to its structure, which gives the industry a direct voice in setting the country’s monetary policy. As a result, the Fed has often given excessive attention to controlling inflation, even at the cost of higher unemployment.
In 2014, a poll of the Fed’s Open Market Committee (FOMC), which determines monetary policy, found that the median estimate of the non-accelerating inflation rate of unemployment (NAIRU), the effective measure of full employment, was 5.4 percent. This meant that if the unemployment rate fell below 5.4 percent then inflation would start to spiral upward. As the unemployment rate began to approach this level, many members of the FOMC began to call for the Fed to raise interest rates to keep unemployment from falling lower.
This is where Fed Up played an incredible role. They were a crucial voice on the other side, constantly reminding the Fed of its legal mandate to promote full employment. Fed Up had important allies in this effort, most importantly former Fed chair Janet Yellen, but it is likely that Yellen and her allies on the FOMC would have been forced to raise rates sooner and faster if not for pressure from Fed Up.
This is a huge deal. Allowing the unemployment rate to fall to 3.7 percent rather than, say 5.4 percent, added more than 3 million jobs. Furthermore, the people who filled these jobs were disproportionately those who were most disadvantaged in the labor market, such as Black and Latino workers, workers with less education, and those with criminal records.
In addition to creating jobs for millions of workers, the tighter labor market has also hugely increased the bargaining power of those at the bottom of the wage ladder. Employers are actually having to compete for workers, even in historically low-paying industries. For example, the average hourly pay of restaurant workers rose 4.2 percent in the last year.
To be sure, workers still have a long way to go to make up the ground lost in the Great Recession, and even longer to make up for the three decades of stagnating wages that preceded it, but the low unemployment rate we are currently seeing makes a huge difference. We need many more successes like the victory at Amazon, but the prospects for such victories will be much better if we can keep the unemployment rate low, and ideally push it still lower.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $115,000 in one-time donations and to add 1365 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
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