Amazon Raises Hourly Minimum Wage To $15

by Bamidele Ogunberu Posted on October 2nd, 2018

Seattle, Washington, USA : Amazon (NASDAQ:AMZN ) announced on Tuesday that it is increasing its minimum wage to $15 for all full-time, part-time, temporary (including those hired by agencies), and seasonal employees across the United States — effective November 1. The new Amazon $15 minimum wage will benefit more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who will be hired at Amazon sites across the country this holiday.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Jeff Bezos, Amazon Founder and CEO. “We’re excited about this change and encourage our competitors and other large employers to join us.”

Amazon’s public policy team will also begin advocating for an increase in the federal minimum wage.

“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, Senior Vice President of Amazon Global Corporate Affairs. “We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.”

The move comes on the heels of repeated attacks from Vermont Sen. Bernie Sanders (I), an outspoken critic of large corporations.

The Vermont independent has specifically called out Amazon and Bezos following reports that some workers claimed they received unlivable wages.

In a letter to the Amazon CEO in June, Sanders shared stories his staff had heard from Amazon employees who said they were struggling.

“My staff have spoken with Amazon workers who are homeless, who are hungry, who are suffering and in pain,” Sanders wrote. “The people you employ who spend 10 or more hours a night running, bending, lifting, and packing up our new electronic gadgets, baby clothes, dog treats and kitchen appliances — many of these workers struggle to pay their rent, put food on the table, send their kids to college or afford their medical bills.”

Earlier this month, Sanders escalated his feud with Bezos by introducing legislation that would charge big companies like Amazon for the federal welfare programs that support their low-wage workers.

In two decades the company expanded far beyond its bookseller beginnings, combining its world-spanning retail operation with less flashy but very profitable advertising and cloud computing businesses. Last month it became the second publicly traded company to be worth $1 trillion, hot on the heels of Apple.

Despite its domination, it shares one potential hurdle that is growing higher for almost all employers big and small: a tightening labour market.

The last hiring figures from the U.S. Commerce Department showed that in August, the pace of hiring rose again and wages grew at their fastest pace in nine years.

Average hourly pay jumped 0.4 per cent in August and increased 2.9 per cent compared with a year earlier. That’s the fastest annual gain since the Great Recession ended.

Competition among companies for qualified workers is growing more intense, and they are increasingly willing to pay.

Last fall Target committed to giving its employees $15 per hour by the end of 2020. And in January Walmart raised its starting wages to $11 per hour.

The pay hike announced by Amazon Tuesday arrives right as retailers head into their most crucial season ahead of the holidays.

But corporate profits in the U.S. are booming, and that wealth isn’t being spread out nearly fast enough for many.

On Tuesday, fast food workers in Michigan are going to kick off a series of protests in the Midwest and elsewhere around the country in support of unions and a $15 minimum age.

Neil Saunders, managing director of GlobalData Retail, said Tuesday that while Amazon’s wage hike is a politically savvy move, it’s also a change made out of economic necessity. With a healthy U.S. economy, Americans looking for work have an increasing number of job options, so Amazon has to find ways to entice people to join its company.

Amazon is also increasing wages in some areas outside the U.S. The company announced that the minimum wage will be 10.50 pounds an hour in London and 9.50 pounds in other parts of the UK. The increases will include 17,000 Amazon employees as well as 20,000 seasonal workers.

 

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Bamidele Ogunberu

Bamidele Ogunberu

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