POLITICS
10/02/2018 07:26 pm ET

Bernie's Dumb 'Stop BEZOS' Bill May Have Just Helped Amazon Workers Get A Raise

A case study in how bad ideas can sometimes lead to good outcomes.

Amazon announced Tuesday that it was raising the minimum wage for more than 350,000 of its workers, so that permanent and seasonal employees will make at least $15 an hour starting in November.

The decision undoubtedly has a lot to do with the company’s need for more workers in a tight labor market. But it probably has something to do with Sen. Bernie Sanders (I-Vt.) as well.

Sanders, the former and perhaps future Democratic presidential candidate, has spent much of the past year beating up on Amazon and its founder, Jeff Bezos, over low pay and dismal working conditions. Last month, Sanders formally introduced a bill that would have penalized companies like Amazon that have significant numbers of employees who rely on Medicaid, food stamps or other forms of government assistance to get by.

The bill’s formal title is “Stop Bad Employers by Zeroing Out Subsidies” ― in other words, “Stop BEZOS.” No, it wasn’t very subtle.

Nor was it well-designed, according to a long list of policy experts. The bill would create incentives for companies to avoid hiring low-income workers, the very people that the policy is supposed to help, because they are the individuals most likely to qualify for benefits. The bill also threatens to stigmatize public programs at a moment when progressives are doing their best to defend and expand those programs, on the theory that they provide vital benefits that could help the middle class as well as the poor.

The Stop BEZOS bill has never stood much of a chance in Congress. But it has drawn attention to how little Amazon workers were making, embarrassing the company at a time when it’s already sensitive about its public image. Now Amazon’s workers are about to get bigger paychecks and the company has announced it will advocate for a higher minimum wage nationally ― in part, it says, because of the scrutiny it has received.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Bezos explained in an official company statement.

If you’re a progressive, this looks like a case of a bad idea leading, or at least contributing, to a good outcome. And it’s not hard to think of other progressive causes where the political dynamics could play out in a similar way.

The STOP Bezos bill that Sen. Bernie Sanders proposed would almost surely have hurt the workers it was supposed to help. But
Tasos Katopodis via Getty Images
The STOP Bezos bill that Sen. Bernie Sanders proposed would almost surely have hurt the workers it was supposed to help. But it sent a message.

The most obvious is single-payer health care, which means creating an insurance program and then enrolling all residents in it. Sanders calls the proposal “Medicare for all” and it’s even more ambitious than the moniker makes it sound. The program Sanders has outlined would end up setting all prices throughout the health care system. It would also cover all medical bills, with virtually no out-of-pocket expenses except for things like cosmetic surgery.

On paper, pretty much every American would end up with more generous insurance than they currently have, with fewer restrictions on sources of care. But the only way to make that work would be to raise taxes in ways that left many people feeling worse off, tolerate substantially higher deficits or ratchet down payments to health care providers ― not just drug and device makers, but doctors and hospitals too. The could mean some combination of layoffs and closures in the health care sector, and disruptions to care, though it would depend on the specifics of eventual legislation.

During the 2016 presidential campaign, when Sanders was running against Hillary Clinton and touting his single-payer plan as an alternative to her health care policies, which mostly involved improvements to the Affordable Care Act, Sanders got a lot of grief from policy experts and writers (including me!) who pointed out all of these trade-offs that Sanders preferred to ignore. While he didn’t win the presidential nomination, it looks more and more like he won the health care debate ― or, at least, shifted the boundaries of that debate in his direction.

Most Democratic leaders, including the many contemplating their own presidential run in 2020, now endorse large expansions of public insurance programs. Most also say they endorse “Medicare for all” ― although, in reality, many of them don’t actually endorse the sweeping proposal that Sanders introduced.

Some prefer initiatives that would keep enrollment in the new plans optional at first. And although they want government exerting more control over prices in the health care system, they envision less dramatic and sudden reductions in prices.

The changes these Democrats prefer would be meaningful, but also less radical  ― and possibly more practical ― than what Sanders has sketched out. They could be a stepping stone to a truly single-payer system or perhaps a program that looks like some of the blended, public-private insurance systems that exist in some European countries and still provide truly universal coverage.

If you’re a progressive, either of those outcomes ought to sound pretty good.

This isn’t all Sanders’ doing and it may not even be mostly his doing. As with Amazon’s decision to pay higher wages, the Democrats’ embrace of bigger government health care programs is a byproduct of market conditions ― in this case, frustration that a system reliant on private insurance, even with the Affordable Care Act in place, leaves too many people struggling to pay medical bills.

But it’s impossible to imagine the politics would look the same if Sanders and his political allies hadn’t made single payer such a defining cause of theirs. And it’s not just health care where the debate is unfolding in this fashion.

The campaign for a $15 minimum wage drew criticism even from progressive economists who pointed out, correctly, that the research on the effects of such a dramatic increase was spotty. But that campaign, like the Stop Bezos bill, likely had something to do with Amazon’s announcement, which raises the company-wide minimum pay to $15 per hour.

Similarly, an ever-larger chorus of progressives is arguing that deficits matter little or not at all. Most of the economics establishment rejects that position, though there’s a real intellectual argument behind it. Whatever its virtues, its likely political effect is to shift the debate so that larger expansions of government ― the kind that would require substantial revenue or cuts elsewhere to finance ― get a more serious look.

If you’re a progressive who thinks the government needs to do a lot more to help parents with young children, or the disabled or the elderly, or the poor, this isn’t such a bad outcome.

Touting policies with clear limits and flaws entails danger, too. It’s possible, for example, to lock in positions before anybody has thought about their very real costs and the political difficulty of justifying them. The Sanders health care proposal would wipe out employer-sponsored insurance entirely ― a position that conservatives are already attacking and that the bill’s co-sponsors, including quite a few 2020 Democratic presidential hopefuls, must be prepared to defend.

That is just one reason why the best advocates, academics and commentators talk about policy honestly, even when that means trashing ideas (and getting nasty, unfair blowback) from politicians whose values they may actually share. But wonks don’t have to win over the public. Politicians do. Sometimes they won’t listen to the sound policy criticisms and sometimes, however inadvertently, things will turn out ok.

CONVERSATIONS