This past week, billionaire Jeff Bezos saw his net worth hit $151 billion, a milestone in personal wealth not seen before.
For the Amazon.com founder and CEO, his net worth is a fluid thing since much of it is tied into company stock. In fact, the Amazon stock price increased by 57 percent just this year alone. If this continues, Bezos could become even wealthier, but if the stock tanks his net worth dips with it. Also taken into account is inflation. For example, at his earnings peak, Bill Gates saw his fortune hit $100 billion in 1999 which would be worth $149 billion in today’s currency. This means that since Forbes magazine started estimating and tracking the wealthiest people in the world, Jeff Bezos is the top dog. Interestingly, this happened on the same day that Amazon held their “Prime Day.”
Yet, not everyone celebrated Bezos’ literal good fortune. Lately he and his company have faced controversy from those who claim he’s profiting at the expense of mistreated workers. “The median annual compensation for Amazon workers was $28,466 in 2017, according to a filing with the Securities and Exchange Commission,” USA Today reported. Employees for the company in Spain and Germany actually called for a strike during the Prime Day event. Nonetheless, it was a success and Amazon’s stock price ticked upwards, making Bezos even richer.
Who is Jeff Bezos?
Jeff Bezos has his hands, or at least his money, in a number of different business ventures, but is best known for creating Amazon. In 1994, while working at a quantitative hedge fund, he saw web usage increasing at a rate of 2300% per year. He realized that people would do their shopping online, so he created a business to cater to that market.
He started with books, then branched out to music and video. Eventually, Amazon became a site where you can purchase almost anything you think of. They do this by maintaining their own warehouses full of products and strategic partnerships with smaller stores and distributors across the globe.
However, he has other business interests as well. Amazon’s Prime Video service is offered to Prime customers but also as a standalone service. This is so they can take on other streaming services like Netflix and Hulu. Bezos also founded Blue Origin in 2000, a company developing private spaceflight. This week, they launched a capsule 74 miles into the air, a record for the company, and landed it successfully. Bezos believes they will be ready for manned flights by November of this year.
Finally, he recently purchased The Washington Post, for $250 million in cash, affirming his commitment to free press, offering the capital to do the work they need to do. This move drew ire from both anti-corporate critics and President Donald Trump, though the latter seems to be mostly upset with his coverage in the paper.
Why Is Jeff Bezos So Controversial?
An interesting fact about Bezos is that, until about five years ago, he was very conservative with his spending. He wore ill-fitting clothing, didn’t have a lavishly decorated office, and drove a 1996 Honda Accord. All of this strove to send a message by example that he wanted to spend money on things that mattered to his businesses and their customers. This changed in the late 2010s. He wore tailored suits, got in shape, and began to spend his money on luxury items like cars and fashion. However, his imperialistic business practices and lack of philanthropy have put a critical spotlight on him.
As Carys Roberts writes for Open Democracy:
"Bezos did not make his fortune alone; the company’s customers, suppliers, workforce, and the public sector through investment in infrastructure, roads and services, all played a part. In particular, Amazon’s employees, of which there are over half a million, are essential to Amazon’s business model of being reliably quick and convenient. Yet Bezos makes more wealth every 9 seconds than the median Amazon employee in the US makes in a year."
Bezos has also received criticism for his desire to make Amazon such a large business that dominates so much of our lives. From privacy concerns regarding Alexa devices to being accused of driving out small businesses, all have made Bezos an easy target for populist ire.
What can Jeff Bezos Do to Fix This?
From his public image, Bezos does not appear to be like other billionaires such as the confrontational Elon Musk or the understated Mark Zuckerberg. He has always enjoyed being in the public eye (including taking a series of fun-yet-corny photos in the 1990s).
In fact, one might say that his purchase of The Washington Post in 2013 was almost charity. The newspaper business was struggling (the business-at-large still is), so there was no guarantee it would ever turn a profit. Only in the past two years, since the election of a certain president who is very angry at the paper, has the paper profited. Like he did with Amazon, Bezos is funneling those profits back into the paper to grow the news staff.
Bezos has also undertaken other philanthropic efforts. He’s donated tens of millions of dollars to cancer research, built a museum in Seattle, and dropped $15 million to open a research center at the Princeton Neuroscience Institute. He donated a million dollars to a press freedom organization and donated $33 million to a fund for scholarships for undocumented immigrants.
However, Bezos is facing criticism for systemic issues like the wage gap, lack of healthcare, and other issues. So, in 2017 he said that he planned to use his wealth to address systemic inequalities in society. He plans to announce his first philanthropic initiatives before the fall of 2018. If he makes good on his word, reinvests in his workers, and uses his wealth to help those in need, it won’t really matter what criticism he gets from the social media sphere.
Despite Bezos’s success, all of this could fall apart relatively quickly given the rapid nature of change, especially in digital businesses.
Because so much of his wealth is tied into Amazon’s stock price, Bezos’ fortune rises and falls with the whims of the market and Amazon’s continued dominance. If either of those two things change in a dramatic way, Bezos might find himself much further down the list of wealthiest people. Yet perhaps the former wealthiest man in the world, Warren Buffet, has a lesson for Bezos. Both he and Bill Gates have promised to give away most of their fortunes to charity. What they realize is that it’s not so much the money you have that builds your legacy, but whether or not you spend it on things that will last.
These are heady matters that only the richest in the world must deal with, but for now, Bezos can take a moment to enjoy his accomplishment. He’s built a world-changing business and earned a spot in the history books. Now, all he has to worry about is what those books will say.
What do you think? Does Jeff Bezos deserve the criticism he’s getting? Do you think he’ll stay atop the list of the world’s wealthiest? Share your thoughts, reactions, and theories in the comments below. Remember to share the article online to get your friends in on the conversation.
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