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Barry Ritholtz: Billionaire Bezos And The Warehouse Workers
"The median salary ... is $28,446, excluding [one person]."
Gosh, do you think that including one more figure would alter the median salary?
He goes on to compare Amazon's median salary with Apple's average salary. The Apple figure he's citing really is its median pay, but you wouldn't know that from his text.
He acknowledge that Apple includes a lot of retail workers, but in a way that suggests this is little different from selling pots and pans at Wallmart. In fact, paysa.com (his source) classifies Apple Associate Sales Specialists as selling electronics, not the largely generic type of stuff at Amazon. Even in the electronics arena Apple is atypical, coming in at second highest pay for associate sales specialist. (The highest paying is Covidien, now part of Medtronics, selling highly specialized medical equipment.)
He thinks that comparing a CEO's net worth to that of the average employee is more informative than comparing the CEO's compensation package to that of the median employee. Somehow he comes up with a ration of 100B:1.
He writes: "Here's how I came up with that ratio", then goes on to say that the median net worth of the workers is somewhere between negative and slightly positive. So already you know that whatever figure he comes up with is highly unstable. (Change the workers' net worth from $1 to $10 and you change the ratio by an order of magnitude.) But he never tells you how he picked some number between "negative and slightly more than zero."
Really! There may be some message, but with all the junk numbers, it's hard to discern what it is.
“The average U.S. warehouse worker, at Amazon or anywhere else, earns a third more than a retail worker. The median hourly wage of a warehouse worker is $13.50, or about 30% more than the average U.S. retail worker's pay of $10.09, according to the Department of Labor ... Amazon wouldn't say how much it pays its workers. But according to data gathered by career website Glassdoor.com, Amazon pays its 20,000 warehouse workers an average hourly wage of about $12, which is below the national average.
My humble math skills: Multiply $12 X 40 (hours a week) X 50 (weeks per year worked) = $24,000 per year earned. Ouch - That’s a trashy amount to live on. Some mitigating factors might be if they receive health insurance, stock in the company, performance incentives or any type of 401K match. Any one of those would result in a higher real salary.
One thing to remember is that Amazon is still a relatively young rapidly expanding company. As such it would be expected to have a younger less experienced workforce which might translate into a lower medium salary. Another issue is education. Low skill jobs don’t pay well. Globalization? I think so. But also speaks to the importance of families promoting their kids’ learning, supporting schools and stressing the importance of post-secondary education, whether college, trade school or other.
PS - My first post-college job paid $5,200 per year. No insurance. The second year I landed a “high paying” position paying a bit over $7,000 yearly and having health insurance. (And that’s right when Nixon imposed the wage/price freeze).
@hank Thanks for the digging. If Amazon has over a half million employees (Ritholtz cited CNN here), and only 4% (20,000) of them are in the warehouses, what are the other 96% doing? How many are at Whole Foods or running Amazon's servers, or ...?
Hard to make all the numbers fit together. In any case, it looks like Amazon's pay scale is not out of whack. One would have to look at things like geographic distribution to go beyond sweeping generalizations. I don't think either of us is going to do that.
Comments
Gosh, do you think that including one more figure would alter the median salary?
He goes on to compare Amazon's median salary with Apple's average salary. The Apple figure he's citing really is its median pay, but you wouldn't know that from his text.
He acknowledge that Apple includes a lot of retail workers, but in a way that suggests this is little different from selling pots and pans at Wallmart. In fact, paysa.com (his source) classifies Apple Associate Sales Specialists as selling electronics, not the largely generic type of stuff at Amazon. Even in the electronics arena Apple is atypical, coming in at second highest pay for associate sales specialist. (The highest paying is Covidien, now part of Medtronics, selling highly specialized medical equipment.)
He thinks that comparing a CEO's net worth to that of the average employee is more informative than comparing the CEO's compensation package to that of the median employee. Somehow he comes up with a ration of 100B:1.
He writes: "Here's how I came up with that ratio", then goes on to say that the median net worth of the workers is somewhere between negative and slightly positive. So already you know that whatever figure he comes up with is highly unstable. (Change the workers' net worth from $1 to $10 and you change the ratio by an order of magnitude.) But he never tells you how he picked some number between "negative and slightly more than zero."
Really! There may be some message, but with all the junk numbers, it's hard to discern what it is.
http://money.cnn.com/2013/07/30/news/companies/amazon-warehouse-workers/index.html
My humble math skills: Multiply $12 X 40 (hours a week) X 50 (weeks per year worked) =
$24,000 per year earned. Ouch - That’s a trashy amount to live on. Some mitigating factors might be if they receive health insurance, stock in the company, performance incentives or any type of 401K match. Any one of those would result in a higher real salary.
One thing to remember is that Amazon is still a relatively young rapidly expanding company. As such it would be expected to have a younger less experienced workforce which might translate into a lower medium salary. Another issue is education. Low skill jobs don’t pay well. Globalization? I think so. But also speaks to the importance of families promoting their kids’ learning, supporting schools and stressing the importance of post-secondary education, whether college, trade school or other.
PS - My first post-college job paid $5,200 per year. No insurance. The second year I landed a “high paying” position paying a bit over $7,000 yearly and having health insurance. (And that’s right when Nixon imposed the wage/price freeze).
Hard to make all the numbers fit together. In any case, it looks like Amazon's pay scale is not out of whack. One would have to look at things like geographic distribution to go beyond sweeping generalizations. I don't think either of us is going to do that.