Amazon posts record $3.6 billion profit in first three months of 2019


Amazon-owned distribution center in Kentucky

Amazon announced record first quarter profits on Thursday, more than doubling the amount made during the same period last year.

The international e-commerce and tech company is controlled by CEO Jeff Bezos, the wealthiest person in modern history, with a net worth that currently exceeds $150 billion. It pulled in $3.6 billion in profit in the first three months of the year out of $60 billion in global sales. This was up from $1.6 billion in profits out of $51 billion in sales in the first quarter last year.

While Amazon retail sales are growing more slowly than in the past, the company was able to increase its profit margin by increasing the exploitation of employees and expanding sales of its cloud computing and advertising services.

“Right now, we are on a nice path where we are getting the most of out of the capacity we have,” Brian Olsavsky, Amazon’s chief financial officer, boasted in a conference call with investors. He was referring to a four percent fall in the cost for fulfilling orders, due to declines in the number of new warehouses and fewer new workers.

Costs declined despite a much-heralded increase in the minimum wage for all Amazon workers in the US last year to $15 an hour. This wage increase, praised by Senator Bernie Sanders, turned out to be an accounting trick that has allowed Amazon to claw back stocks and other benefits from workers.

Despite these massive profits, Amazon’s accounting department has been able to utilize a variety of tax credits and tax breaks on executive stock options to pay no federal income taxes for the last two years. In 2018, Amazon received a rebate of $129 million, for an effecting tax rate of -1.2 percent. In 2017, Amazon received a rebate of $140 million, making its then effective tax rate -2.5 percent.

Since 2009, the second largest private employer in the United States has paid just 3 percent in income taxes on $27 billion in profits, well below the 21 percent corporate tax rate signed into law by President Donald Trump in 2017.

With its record breaking first quarter, Amazon is on track to top the $11.2 billion in profits that it made in 2018. However, this is not enough for Wall Street, which responded to the earnings report by holding the company’s stock steady for the day Thursday. The message is clear: the exploitation of workers in the US and around the world must be increased ever further to ensure an even bigger haul next quarter and every quarter thereafter.

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