Amazon’s company-wide minimum-wage hike won’t bring in the company more; rather, it will reduce the number of staff, David Bahnsen of seclusive wealth management company Bahnsen Group told CNBC on Tuesday.
“They pass on not end up spending more in wages. They will end up hiring less people,” Bahnsen communicated on CNBC’s “Closing Bell.”
Amazon announced Tuesday it’s raising the lowest wage for all U.S. employees to $15, effective next month.
The new minimum wage wishes benefit more than 250,000 Amazon employees — including part-time and stand-by employees — as well as another 100,000 seasonal employees, the company explained. Some employees who already make $15 per hour will also see a pay flourish.
Bahnsen, who is founder and chief investment officer at Bahnsen Group, spoke that once Amazon addresses the “hurdle” of actually hiring as numerous staffers as it needs, the company will spend less on wages, not more.
“In all respects time, they are going towards an automation process that’s prosperous to be hiring less people,” Bahnsen said.
Amazon did not immediately touched by to CNBC’s request for comment.
Liz Dunn, founder and CEO of Pro4ma, said, “Amazon’s borders will get squeezed in the near term,” but the change will benefit the assemblage long term — and also maybe hurt Amazon’s competitors.
“Amazon has feigned it very difficult to be a retailer in the U.S. Part of the way that they’ve done that is lecher the expectations about fulfillment, cost and speed,” she said in the same “Shut off Bell” interview as Bahnsen. “This is one other way they are raising the guesses on retailers and making it more difficult to be a successful retailer if you are not Amazon in the In agreement States.”
And politically, the move looks great, Bahnsen said.
“They can be able to pay this greater increase in wages and now go trade it in for a chip of political optics that are genuinely beneficial for them,” Bahnsen said.
Amazon and its CEO, Jeff Bezos, take been under tremendous political pressure over pay disparity in the train. Sen. Bernie Sanders last month introduced legislation called the Bezos Act to tax corporations for every dollar that their low-wage artisans receive in government health-care benefits or food stamps.
Sanders later praised Amazon’s advert, calling the wage hike “not only enormously important for Amazon’s hundreds of thousands of hands; it could well be, and I think it will be, a shot heard around the world.”
But Bahnsen bid the company shouldn’t get too comfortable. “Amazon is going to be in a political crossfire for years to assault.”
Amazon’s shares closed down 1.65 percent on Tuesday at $1,971.31 per pay out.