Earlier quoted context omitted.
Sure, 0.5% is hyperbole on my part. Sorry. It's not like a 20% bump in costs for these workers would result in a 20% bump in prices or anything like that. Their margin on that retail item is probably 30-40% of the cost of that product though. Let's assume the workers' benefits and wages in question here are 35% of Amazon's costs. If there was a 20% increase of that labor cost, that's going from 35% to 42% of the tota…
I don't understand how you got down from 7% down to 1.6%. I think you are not counting COGS as an expense, and that's where the error comes from. If your assumptions are otherwise correct, I think you'd get roughly a 7% increase in prices to sustain the 20% bump in wage expense.
Are you suggesting the warehouse worker's benefits and pay is really 25-50%+ of the final purchase price of the good?? That'd be an extraordinarily high amount of cost.