Amazon says wage hike ‘more than compensates’ for loss of bonuses • Hacker News Board

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#81

Post by p0rkbelly » Thu, Oct 11, 2018, 11:50 PM UTC

behringer wrote: post #66

p0rkbelly wrote: post #56

Earlier quoted context omitted.

correct. For companies with heavy RSU based compensation they assume a certain % of growth every year. Say 10%. Let's say Amazon did 50% year over year. You did better than you expected. However, next year you will get less RSUs since you made a lot more than planned in the previous year. Having a very good year, as I imagine most Amazon employees did, does not mean you should get the same windfall money next year. I…

Not properly understood? No, the bonuses were taken away and the pay rate was raised instead. However, Amazon said people were just getting a raise because of the poor pay they've been getting. They weren't promised a different way of getting paid. They were promised a raise

I read an article that said a lot of employee's look at their RSU as a bonus of when it vets. But in reality, it's part of their compensation. Not sure what Amazon told employees vs what was in the press "starting wage of $15". I can understand the frustration if they said "everyone is getting a raise" and then the math doesn't check out. We need more math.

I've been in a situation where I worked for a company where a large portion of my comp was RSUs. We had a really good year and I probably made $30,000K more than they were estimating (assuming the stock grew at x%). The next year and two, I got a ~5% raise. I took home less money those two years since I had a windfall the the first year and then our stock leveled out. So despite performing well, and getting healthy raises, I took home less money.

I would imagine the hourly workers might have just a few RSUs at best at Amazon's share price of $1500-$2000 per stock. Since that is such a large percentage of their annual income and if Amazon was trying to level it out to make it less spikey, people probably thought money was being taken away because Amazon's stock did so well the previous couple years.

Basically, Amazon Employee's got really lucky with RSUs and got paid more than Amazon was planning for. So now Amazon wants to bump them up in "planned/target" compensation -- which may be less than they made previously because the stock did wildly good.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#82

Post by pixl97 » Fri, Oct 12, 2018, 12:46 AM UTC

maym86 wrote: post #79

pixl97 wrote: post #78

Earlier quoted context omitted.

Hmmm, what you are saying doesn't make sense. Lets say there is an industrial machine that TCO is $50,000 per year to operate. Lets say a human doing the same task, same quantity, and same outcome, for low pay only costs $20,000. It would be crazy not to use humans. Trying to drop the cost of the machine is likely going to be very difficult because there will be no demand. Now, give the humans a raise and insurance.…

Raising the wages of humans so they are the same cost as machines doesn't make the machines cheaper. Amazon could keep workers wages low and still buy machines and create the market. One doesn't necessitate the other.

>Raising the wages of humans so they are the same cost as machines doesn't make the machines cheaper.

And again, that is where you are wrong.

Economies of scale. Building one machine is expensive. Building 10 is slightly cheaper. Building a thousand lowers the price. A million makes them a commodity.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#83

Post by sfcguyus » Fri, Oct 12, 2018, 12:58 AM UTC

fareesh wrote: post #14

Is it something like this? For someone who worked at one of these jobs at Amazon for 3 years Basic wage: X Bonus Wage: Y Total: X+Y Under the new system Basic Wage: X+Y Bonus Wage: 0 Total Wage: X+Y The net effect is zero but principly the value of the bonus has been reduced to nothing, after the loyalty of rhe employee and the benefits that come with that, have already been collected by the employer. Seems somewhat…

More accurate:

Basic wage: X

Bonus Wage: A

Market Appreciation: B

Total: X+A+B

Under the new system

Basic Wage: X+Y

Bonus Wage: 0

Total Wage: X+Y

X+Y > X+A

Sometimes, X+Y+Z > X+A depending on if you keep the RSU. But you can always also take Y (the increase) and invest it and it will always be higher.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#84

Post by maym86 » Fri, Oct 12, 2018, 2:32 AM UTC

pixl97 wrote: post #82

maym86 wrote: post #79

Earlier quoted context omitted.

Raising the wages of humans so they are the same cost as machines doesn't make the machines cheaper. Amazon could keep workers wages low and still buy machines and create the market. One doesn't necessitate the other.

>Raising the wages of humans so they are the same cost as machines doesn't make the machines cheaper. And again, that is where you are wrong. Economies of scale. Building one machine is expensive. Building 10 is slightly cheaper. Building a thousand lowers the price. A million makes them a commodity.

I understand economics of scale. Amazon could order a million machines without raising workers wages.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#85

Post by cromwellian » Fri, Oct 12, 2018, 5:17 AM UTC

beat wrote: post #62

cromwellian wrote: post #41

Earlier quoted context omitted.

But they are being replaced with engineers, salesmen, and customer support, not with warehouse employees. Different skill sets and likely, a net loss of jobs for the poorest and a net increase of white collar positions.

200 years ago, 95% or more of the population was employed as farmers. Today, it's less than 3%. Somehow, we survived.

That replaced mostly manual labor with mostly manual labor. The millions of people involved in the horse industry supply chain, went to cities and they and their descendants worked in factories. A horse required a lot of non-mass-produced infrastructure to support, the feed, the shoes, the buggy, the saddle. There were millions employed in this industry.

That was replaced by cars. And while industrial machines automated a lot of what used to be manual blacksmith/tradeskills work, cars were made from thousands of parts, which required a massive new supply chain.

Software automation is completely different, it scales and replicates in ways that don't require new replacement labor. WhatsApp serviced 1 billion users with 33 employees. That's scale.

So when self driving trucks kill 8 million trucking supply chain jobs and self driving cars do reduce the need for car ownership, for parking attendants, valets, meter maids, traffic cops, uber drivers, etc, low skilled people won't suddenly find those millions of jobs replaced with similar jobs with similar skill levels in another vertical. They'll just be....GONE.

And keep in mind, the "gig" economy largely replaced good, reliable, jobs with temporary, inconsistent, jobs. The industrial era, with it's big centralized unions, who regularized pay, the work week, benefits, pensions, et al, was not re-invented for the new service and gig industry.

The idea that technological advancement doesn't create structural unemployment is largely an article of faith. What it means to have a middle class, blue collar, skilled position with predictable work/life balance, income, and benefits has largely evaporated for a good chunk of the country. What comes next after automated logistics, automated factory assembly, automated deliver and self-driving vehicles? Hell, Google Duplex even shows you a lot of the frontdesk services can be reduced along with concierge services to only those instances that go off the rails.

We better start thinking about these problems and stop with dogmatic faith that something big will come along to employ all the displaced people. I'm talking about either universal basic income, government make-work, or something no one's thought of yet.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#86

Post by cromwellian » Fri, Oct 12, 2018, 8:14 AM UTC

krapp wrote: post #74

cromwellian wrote: post #37

Earlier quoted context omitted.

The Amazon of China, Jingdong, has a fulfillment center that handles hundreds of thousands of packages a day and employs just five people: https://youtu.be/RFV8IkY52iY Amazon used humans because the investment to build full automation was too expensive and take too long to build out compared to spinning up human labor. However now the logistics of the fulfillment center are well understood and they can be rebuilt wit…

>It was clearly a matter of time and money, not “these jobs are impractical hard to do with automation” I take it you haven't seen a single item dropped on the floor result in several Kivas playing bumper cars with each other, necessitating human beings to physically drag them away.

How many human beings do you need? Web search lists 90,000 fulfillment center employees at 25 fulfillment centers, so let's assume 3600 employees per warehouse. Amazon ships about 1million packages a day, so let's estimate 40,000 per fulfillment center per day. So that's 11 packages shipped per employee.

Now, let's assume a 0.1% (probably very high) item drop. So about 40 packages will be dropped a day. How many people do we need to run out and get 40 dropped packages? Certainly not more than 40. So at this failure rate, I can reduce the number of employees by a factor of 3600/40 = 90x!

Clearly, handling failure cases is a much lower workload and needs far fewer people in the pipeline. Like I said, Jingdong has a fulfillment center that does 250,000 packages a day they claim, and they say only 5 people are needed to babysit its operation.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#87

Post by cromwellian » Fri, Oct 12, 2018, 8:18 AM UTC

beat wrote: post #63

cromwellian wrote: post #37

Earlier quoted context omitted.

The Amazon of China, Jingdong, has a fulfillment center that handles hundreds of thousands of packages a day and employs just five people: https://youtu.be/RFV8IkY52iY Amazon used humans because the investment to build full automation was too expensive and take too long to build out compared to spinning up human labor. However now the logistics of the fulfillment center are well understood and they can be rebuilt wit…

What part of fulfillment, though? In my area, Amazon has its own trucks delivering packages, for the most part. That's not exactly something that can be automated.

Not yet, but one self driving takes off, delivery drones are probably one of the first use cases to be used. Hell, they don't even have the 'unrestricted left turn' problem that cars have, because UPS already restricts its drivers to right turns only or restricted left turns only. You just need a self-driving UPS truck, and for a certain subset of packages in a certain weight class, just a self-propelled dolly that comes out of a ramp in the back of the truck.

I'm guessing no more than 20 years before all of this is automated. And then what for low skilled labor?

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#88

Post by cromwellian » Fri, Oct 12, 2018, 8:22 AM UTC

cromwellian wrote: post #86

krapp wrote: post #74

Earlier quoted context omitted.

>It was clearly a matter of time and money, not “these jobs are impractical hard to do with automation” I take it you haven't seen a single item dropped on the floor result in several Kivas playing bumper cars with each other, necessitating human beings to physically drag them away.

How many human beings do you need? Web search lists 90,000 fulfillment center employees at 25 fulfillment centers, so let's assume 3600 employees per warehouse. Amazon ships about 1million packages a day, so let's estimate 40,000 per fulfillment center per day. So that's 11 packages shipped per employee. Now, let's assume a 0.1% (probably very high) item drop. So about 40 packages will be dropped a day. How many peop…

BTW, if you look at the Jingdong video, they're not doing Kiva. Kiva was designed for human packers to bring human-sized shelves to the packager.

Jingdong is doing what Musk talked about: A 3D space filling factory. They've build a Voxel-like 3D positioning system of shelves. The entire warehouse space seems to be used, stacking stuff up to the ceiling. Robot sleds seem to be able to address any X/Y/Z coordinate in this space, moving down to where a robot arm unloads a palette.

So basically, it's Kiva bots, but on 3D degrees of freedom.

They do have Kiva-style bots for the final part that loads the wrapped packages onto the Jingdong delivery trucks.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#89

Post by pixl97 » Fri, Oct 12, 2018, 10:03 AM UTC

maym86 wrote: post #84

pixl97 wrote: post #82

Earlier quoted context omitted.

>Raising the wages of humans so they are the same cost as machines doesn't make the machines cheaper. And again, that is where you are wrong. Economies of scale. Building one machine is expensive. Building 10 is slightly cheaper. Building a thousand lowers the price. A million makes them a commodity.

I understand economics of scale. Amazon could order a million machines without raising workers wages.

Amazon doesn't control worker wages, for the most part.

If the politicians and employees were not complaining they would not have raised wages.

Re: Amazon says wage hike ‘more than compensates’ for loss of bonuses

#90

Post by krapp » Fri, Oct 12, 2018, 1:28 PM UTC

cromwellian wrote: post #86

krapp wrote: post #74

Earlier quoted context omitted.

>It was clearly a matter of time and money, not “these jobs are impractical hard to do with automation” I take it you haven't seen a single item dropped on the floor result in several Kivas playing bumper cars with each other, necessitating human beings to physically drag them away.

How many human beings do you need? Web search lists 90,000 fulfillment center employees at 25 fulfillment centers, so let's assume 3600 employees per warehouse. Amazon ships about 1million packages a day, so let's estimate 40,000 per fulfillment center per day. So that's 11 packages shipped per employee. Now, let's assume a 0.1% (probably very high) item drop. So about 40 packages will be dropped a day. How many peop…

The thing is, Amazon's warehouses are still designed around human beings. Stowing, picking and counting in bins with random assortments and arrangements of items requires visual, spatial reasoning and fine motor skills that are still difficult to automate. The Jingdong factory doesn't appear to be using random item placement and appears designed entirely around automation.

I don't think Amazon can easily automate its existing warehouses beyond a certain point (I don't know what that is, they probably haven't reached it yet) because so much effort has been put into optimizing them for a human workforce. Obviously, Amazon is going to automate away as many jobs as it can, but it's not clear that full or close to full automation would necessarily be cost effective.