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Amazon Challenges Companies To Raise Wages; Walmart Issues Taunting Response

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A public challenge issued by Amazon CEO Jeff Bezos prompted a taunting response from Walmart.

 

On Thursday, Bezos made headlines Thursday by publicly challenging other retailers to match or outdo his company's newly implemented (to mixed results) $15 minimum wage.

"Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage," Bezos said in his annual letter to shareholders issued Thursday. "Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone."

Walmart has since indeed "thrown the gauntlet" back at Amazon, but not quite in the way Bezos suggested.

"Hey retail competitors out there (you know who you are) how about paying your taxes?" Walmart’s Executive VP of Corporate Affairs Dan Bartlett tweeted Thursday, linking to a Yahoo Finance article detailing how "Amazon will pay $0 in taxes on $11,200,000,000 in profit for 2018."

Citing a report from the Institute on Taxation and Economic Policy (ITEP), Yahoo Finance explained in February that Amazon "will pay nothing in federal income taxes for the second year in a row."

 

"Thanks to the new Tax Cuts and Jobs Act (TCJA), Amazon’s federal tax responsibility is 21% (down from 35% in previous years). But with the help of tax breaks, according to corporate filings, Amazon won’t be paying a dime to Uncle Sam despite posting more than $11.2 billion in profits in 2018," the report shared by Bartlett states. In 2017, Amazon also paid $0 in taxes despite making $5.6 billion in U.S. profits.

The director of ITEP, Steve Wamhoff, said that while Amazon states in their public documents that they have simply taken advantage of tax credits, it’s "unclear" what specific credits they're referencing. "They vaguely say tax credits," said Wamhoff. "One could think of many different ways a corporation could do this, like the depreciation breaks which were expanded under TCJA."

Amazon maintains that its handling of taxes is on the up-and-up, a spokesperson telling Yahoo, "Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years."

In November, Amazon implemented its new $15 minimum wage for all employees, but some reports suggest the change hasn't gone as well as many hoped. By March, employees of the Amazon-owned Whole Foods grocery chain were reporting significant reductions in their hours worked since the minimum wage hike was introduced.

 

The Guardian reported in early March that since the wage hikes, Whole Foods employees say they've experienced "widespread cuts that have reduced schedule shifts across many stores, often negating wage gains for employees." Multiple Whole Foods employees told to the outlet that they've seen an average of around a 30% reduction in hours per week for part-timers and about a 10% reduction for full-time employees.

Walmart has enacted its own wage hikes, raising the minimum wage to $11 back in January 2018, NBC News notes. Though that's less than Amazon pays, Walmart says that its average worker earns over $17 an hour in wages and benefits.

Related: Whole Foods Adopts $15 Minimum Wage, Then Starts Slashing Workers' Hours 'Significantly'

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