New York
UJ Business
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Amazon is raising its base pay to $15 per hour for all employees in the United States.
This adjustment will take effect on November 1 and encompasses full-time, part-time, and temporary staff. According to Amazon (AMZN), over 250,000 U.S. employees and an additional 100,000 seasonal workers will benefit from this increase.
“We took our critics’ views into account, considered our goals carefully, and made the choice to lead the way,” said Jeff Bezos, the founder and CEO of Amazon. “We look forward to this shift and invite our competitors and other major employers to follow suit.”
This wage increase will also apply to employees at Whole Foods and all other subsidiaries.
Amazon also announced that its public policy team will start advocating for a hike in the federal minimum wage, which has remained at $7.25 an hour since 2009.
“We will leave it to Congress and the experts to determine the appropriate figure,” stated Dave Clark, the company’s senior vice president of worldwide operations, in an interview with UJ’s Christine Romans. “For us, that figure is $15.”
The scale and rapid expansion of Amazon heighten the significance of this decision well beyond the hundreds of thousands who will directly benefit.
As one of the largest employers in the United States, Amazon has generated more American jobs in the last ten years than any other company.
This shift also affects the dynamics for potential employees at Amazon’s upcoming second headquarters, HQ2, which is anticipated to bring 50,000 new jobs. The company has identified 20 cities as contenders, including Atlanta, Chicago, and Washington, D.C.
Critics, such as independent Senator Bernie Sanders from Vermont, have voiced concerns that Amazon’s wages are insufficient, drawing attention to Bezos’ immense wealth, currently estimated at $165 billion.
“I want to acknowledge Bezos for doing the right thing,” Sanders stated on Tuesday. “I look forward to collaborating with him to advocate for a federal minimum wage of $15.”
In response, Bezos expressed his gratitude towards the senator. “We are thrilled about this, and we also hope others will get on board,” he tweeted.
Workers nationwide have been advocating for a $15 minimum wage, prominently as part of the Fight for $15 movement.
Proponents argue that this increase addresses growing wage inequality and will stimulate consumer spending, while detractors claim it may limit job opportunities for teenagers and others seeking entry-level positions.
Several companies have responded to public demand for higher wages.
Target increased its minimum wage for new hires to $12 per hour in September, with plans to reach $15 by the end of 2020. Disney secured a deal with its unions to implement a minimum pay of $15 per hour at Disneyland in California by 2019 and at Disney World in Florida by 2021.
Additionally, Walmart, the largest private employer in the U.S. with over 1 million workers, raised its minimum wage to $11 in February.
Clark mentioned that Amazon aimed to expedite this wage increase.
“We concluded that there is no reason to delay. This is something we should implement immediately,” he explained to Romans.
Paul Sonn, state policy program director for the National Employment Law Project, noted that Amazon’s announcement would create pressure on other firms to enhance pay and on Congress to raise the federal minimum. Currently, 29 states have minimum wages exceeding the federal standard of $7.25.
Neil Saunders, managing director of the consultancy GlobalData Retail, mentioned that the rise in starting pay might also assist Amazon in attracting employees.
“Without a wage increase, Amazon risks being at a disadvantage in the competitive labor market,” Saunders remarked. He highlighted that the company’s brisk growth necessitates extensive hiring, which is increasingly challenging during a tight labor market, particularly as the holiday season approaches.
Saunders further described the decision as “politically astute.”
Last month, Amazon reported that the average hourly wage for full-time associates in its fulfillment centers already exceeded $15.
According to a company filing, Amazon’s median pay last year was $28,446, equivalent to $13.68 per hour. The calculation includes international and part-time employees.
The company also declared that it would be raising the minimum wage for its UK employees starting on November 1. The new minimum will be £10.50 ($13.60) for the London area and £9.50 ($12.30) for other parts of the country, affecting over 37,000 employees, including seasonal workers.
The existing minimum wage for adults aged 25 and over in the UK is £7.83 ($10.15).
