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.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.