Senator Bernie Sanders wants large companies to pay a tax for every employee with a low wage. Could such a policy backfire in any way, especially regarding employees themselves?
Amazon founder and CEO, Jeffrey P. Bezos is now the world’s richest man with a net worth estimated at over $150 billion.
While a median worker at Amazon earns a little over $28,000, Jeff Bezos’ annual compensation amounts to $1,6 million, or a disparity ratio of 1 to 59.
Even then, Bezos’ salary would sound “very low”, and it can’t justify his status as the richest man on earth.
As of last August, Bezos is the top shareholder in Amazon, holding about 80 million shares of the company stock.
Because Bezos makes in a few seconds what an Amazon worker earns in a whole year, Sen. Bernie Sanders has made Bezos his prime target with his new proposed senate bill.
The Beginnings of the BEZOS Act
Vermont Senator Bernie Sanders frequently criticises Jeff Bezos in a virulent way, denouncing the low wages paid for workers at Amazon fulfillment centers.
Earlier this month, with Congressman Rohit Khanna, Bernie Sanders proposed a Senate bill that would have the government impose a 100% tax on large companies to cover for the federal benefits their employees receive.
If adopted, the legislation will require companies with over 500 employees to pay one dollar for every dollar worth of public assistance its workers get, such as SNAP (food stamps), housing, and Medicaid.
Sen. Sanders’ senate bill‘s full name is “Stop Bad Employers by Zeroing Out Subsidies Act.”, also called the “Stop B.E.Z.O.S. Act”, an acronym taking a dig at Jeff Bezos. Besides Amazon, the bill also targets Walmart.
The bill, said Sanders, would “have Mr. Bezos, the Walton family of Walmart and other billionaires to get off of welfare, and start paying their workers a living wage. In other words, the taxpayers in this country would no longer be subsidizing the wealthiest people in this country”.
A study from UC Berkeley’s Center for Labor Research and Education (The High Public Cost of Low Wages) estimates that low wages cost about $153 billion annually to American taxpayers.
Could the Stop BEZOS Act Work?
Amazon has fired back at Sen. Sanders.
In a blog post, Amazon said Sanders is continuing with his “inaccurate and misleading accusations” against the company, while he has never seen one of Amazon fulfillment centers.
Amazon said the company’s median U.S. salary of $28,446 includes “part-time employees”, and that for full-time employees, the number jumps to $34,123.
“Senator Sanders’ references to SNAP, which hasn’t been called “food stamps” for several years, are also misleading because they include people who only worked for Amazon for a short period of time and/or chose to work part-time — both of these groups would almost certainly qualify for SNAP,” said Amazon.
Sanders who describes himself as a democratic socialist, believes in “an economy that works for all, not just the very wealthy”.
The Stop BEZOS Act has its detractors, with some criticizing it as unworkable, because the eligibility to the welfare programs isn’t based solely on how much employees make, but also based on the spouse income, marital status, the household size, and whether there are kids and how many along with other factors.
If the Sanders’ bill passes, it could lead to unfavorable hiring opportunities for single individuals who don’t have kids for example, as their public assistance “risk” is low.
Granted, the bill, in its very name, may be showing Jeff Bezos in a bad light, but he understands that his status as the world’s biggest fortune makes him an easy target.
To give credit where credit is due, the bill and Sanders, by singling Bezos out, seem to forget that the U.S. economy owes most of Amazon jobs to the vision of its founder.
This doesn’t mean that corporations shouldn’t pay its employees a “living wage”, but that the bill may have to be adjusted so that there’ll be no indirect incentives that would create hiring bias.