The super-rich and their sudden concern for the disadvantaged

April 26, 2019 18:57
Jeff Bezos has thrown a challenge at other big retailers about matching the pay and benefits that Amazon is offering to its workers, saying he is ready to boost the hourly wage further if the others step up their game. Photo: Reuters

From the Occupy Wall Street campaign in the United States in 2011 to the ongoing Yellow Vest protests in France, the tensions and confrontations between the haves and the have-nots in Western society have continued to escalate.

Although the logic embraced by protesters is seemingly flawed, it has become increasingly apparent that the super-rich in the West can no longer ignore the mounting public resentment against them.

Last November, Jeff Bezos, founder of the global online retailing giant Amazon and the world’s wealthiest person, decided to substantially raise the minimum hourly wage of his company’s 350,000 employees across the US by 36 percent to US$15.

And earlier this month, Bezos made another high-profile move by calling on other big retailers to follow suit, saying that he is eager to introduce further pay rise for his staff if other competitors raise the minimum hourly wage of their employees to US$16.

For those who are familiar with the e-commerce industry, they can tell that Bezos didn’t do this just for the sake of his staff.

Amazon has become highly diversified in its business operations and emerged as one of the world’s most valuable companies. If some of Bezos' smaller, less profitable and more cost-vulnerable competitors overrate their abilities and take the challenge, they may suffer a poorer company performance, or could even be driven out of business, if they raise the wage bar.

If that was Bezos’ true intention, it would definitely be a brilliant attempt of trying to kill two birds with one stone: strangling his competitors on one hand, and winning public approval by paying his employees more on the other.

Such a tactic is consistent with Bezos’ longstanding take-no-prisoners style when it comes to doing business.

And even if other competitors don’t follow suit as Bezos would like and maintain the original amount of the minimum hourly wage, he could still take a lot of credit for being an “employer with conscience”. Therefore, either way, no matter how the competitors responds, Amazon wins.

In fact Bezos isn’t the only business elite in the US to “suddenly” express concern for the grass-roots.

At the beginning of this month, Jamie Dimon, chairman and CEO of JPMorgan Chase, published his annual letter to shareholders in which he spent quite a number of paragraphs on the economic hardship facing the American working class.

In his letter Dimon cited a number of examples, such as the fact that 40 percent of American workers are currently making less than US$15 per hour, that 5 percent of full-time workers are making just enough to make ends meet, and that 40 percent of Americans can’t easily spare US$400 for emergency expenditures like medical spending.

As Dimon has put it, the American Dream is "alivebut fraying for many".

Dimon’s views were echoed by Ray Dalio, founder of Bridgewater Associates, the largest hedge fund in the world, who has put forward several proposals to reform the capitalist system in order to address the rapidly widening wealth gap in American society.

Bezos, Dimon and Dalio are all big winners under the capitalist free market, and the fact that these “elites of elites” are all voicing concern for the impoverished in society might appear hypocritical in the eyes of those who hate rich people.

Nevertheless, in our opinion, these tycoons could actually be, in a sense, genuine in their concern for the poor.

It is because we believe they are perfectly aware that it would be too late if they took solid action only after the polarization between the rich and the poor in society has already boiled over.

In France, as donations from billionaire tycoons quickly poured in to help rebuild the fire-ravaged Notre-Dame cathedral, it has triggered a new wave of resentment against the rich in the country. 

This is a strong alarming signal for societies that are plagued by severe wealth disparities, a list that includes Hong Kong.

Failure to address the popular grievances could give rise to long-term social unrest.

This article appeared in the Hong Kong Economic Journal on April 25

Translation by Alan Lee

[Chinese version 中文版]

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Hong Kong Economic Journal