Amazon.com Inc. (AMZN) Gets Support Of Obama Administration But Richard Farley and Danny Blanchflower Disagree

The Supreme Court hearing of the lawsuit against Amazon.com, Inc. (NASDAQ:AMZN) began this Wednesday. The lawsuit, which was filed four years ago by former workers from Amazon’s Nevada warehouse, argues that workers have to be compensated for the twenty to twenty five minutes they spend every day in security checks after their shift ends.

The Obama Administration has announced that it will side with Amazon but this stance conflicts with its pro-labor outlook. Experts Richard Farley, partner at Paul Hastings LLP and Danny Blanchflower, Professor of Economics at Dartmouth College discussed the government’s decision on Bloomberg’s ‘Bloomberg Surveillance’.

During the 1940’s, the United States Government sided with the miners but now in the case of Amazon.com, Inc. (NASDAQ:AMZN), the tide has turned. “I think the analogy sounds reasonably apt […] the Supreme Court is going to hand out a decision we think and we will eagerly await it,” said Richard Farley referring the Government’s stance back in the forties. Danny Blanchflower pointed out that the median American voter was still struggling in terms of standard of living while some others do well for themselves. This conflict in social status could be big in the debate between the ‘Two Americas.’

Blanchflower explained that one of the major factors which lead to issues similar to the one observed at Amazon.com, Inc. (NASDAQ:AMZN) is the unequal productivity distribution in spite of an increase in the quality of occupation. “The productivity distribution has become more unequal and pay reflects that […] the issue for society is that somehow or the other we have to bring up the productivity of the people at the lower end and their pay will go up,” he said. He added that we can bring up productivity levels through investments and trainings targeted towards a particular stratum of the society. He also stated that the government is holding up the system by its as yet incomplete quantitative easing which it started back in 2008.

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