Retail’s war of words: Wages and taxes deployed as salvos

Amazon’s Jeff Bezos challenges Walmart and others to match its pledge to pay every worker a minimum of $15 per hour. The reply, ‘What about your taxes?’ fuels the high-profile sparring.

All’s fair in love and retail.

After Amazon’s Jeff Bezos called for major competitors to match Amazon’s plan to raise the minimum wage to $15 per hour, his targets weren’t going to take the criticism lying down. Top bosses at both Walmart and eBay used social media to hit back.

The statements came from individual executives—mirroring Bezos’ statement but falling short of providing an institutional message. However, journalists were ready to see those tweets as representative of their respective organizations.

CNBC reported:

Amazon and Walmart are in war over worker pay — and now corporate taxes.

After Amazon CEO Jeff Bezos on Thursday issued a challenge to other retailers, not naming which ones specifically, to match Amazon’s pay and benefits, Walmart has responded, albeit quietly.

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

Walmart’s executive vice president of corporate affairs, Dan Bartlett, then shared an article Thursday morning on Twitter about Amazon paying $0 in federal taxes on more than $11 billion in profits last year. He wrote: “Hey retail competitors out there (you know who you are) how about paying your taxes?”

The CEO of eBay, Devin Wenig, criticized Amazon for some of its business practices.

Amazon was ready to defend its tax history.

CNBC reported:

A spokesperson for Amazon said in a statement to CNBC:

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. Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment. We have invested more than $160 billion in the U.S. since 2011, building a network of more than 125 fulfillment and sortation centers, air hubs and delivery stations as well as cloud-computing infrastructure and wind and solar farms. We invest heavily in research and development at our Seattle headquarters and 18 tech hubs across the country. We are creating tens of thousands of quality jobs each year with industry-leading pay for people of all skill levels, bringing our total workforce in the U.S. to more than 250,000.

Amazon is working to establish itself as a leader on issues that it believes matter to customers and employees. The move is an escalation of attempts to respond to criticism over employee compensation in recent years.

As previously was reported on PR Daily:

The company has been the target of several investigations into workplace complaints and employment practices. Now, Amazon wants to show its compassionate side—and is willing cough up some serious cash to do it.

Amazon announced that it would raise all base hourly salaries to $15 an hour, the benchmark many advocates have pushed for in the fight over the national minimum wage.

Research suggests that consumers want companies to lead on ethical matters and speak out on issues those consumers care about. However, that kind of speech leaves one open to criticism from outside, and even within, the organization.

For example, Amazon also claims to be a leader on climate change, but some employees want more.

Vox reported:

Amazon employees are using their influence as shareholders to push the company to take bolder action on climate change.

Since Tuesday, more than 5,000 employees have signed a letter to CEO Jeff Bezos and Amazon’s board of directors, pressuring them to come up with a companywide climate plan that would lead Amazon to transition to 100 percent renewable energy.

They also want Amazon to stop doing work for the oil and gas industry and to stop donating to members of Congress who vote against legislation to curb carbon emissions.

“We believe this is a historic opportunity for Amazon to stand with employees and signal to the world that we’re ready to be a climate leader,” they wrote in a letter published Wednesday on Medium. Within 48 hours, thousands of employees had endorsed the petition — a sign that there’s strong support within the workforce for an idea that seemed unattainable just four months ago.

Should you fight back when a rival company calls you out, whether by name or general implication? For eBay, the answer lies in the numbers.

CNBC reported:

Shares of eBay fell nearly 5% on Thursday, after Amazon CEO Jeff Bezos snubbed the rival e-commerce giant in his annual letter to shareholders.

In the letter, Bezos compared the growth in merchandise sales of third-party sellers between Amazon and eBay from 1999 to 2018. His comparison showed that Amazon has clearly outperformed its rival.

“Third-party sales have grown from $0.1 billion to $160 billion — a compound annual growth rate of 52%. To provide an external benchmark, eBay’s gross merchandise sales in that period have grown at a compound rate of 20%, from $2.8 billion to $95 billion,” said Bezos.

The retailers’ war of words underscores a wider trend showing major corporations’ willingness to lash out at competitors in ads and other messages. Anheuser-Busch and MillerCoors have been in a prolonged battle that led to a lawsuit over claims about each other’s products.

The conflict also illustrates the increasing use of snark online, as many try to replicate the social media success of companies like Wendy’s. However, the sass can backfire, and brand managers must tread carefully to avoid sparking a backlash.

What do you think of Amazon and Walmart’s public tussle, PR Daily readers?

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