Amazon has increased the minimum wage it pays all full-time, part-time, temporary and seasonal workers in the US to US$15 ($20.90) effective November 1, after being criticised for not paying all workers a living wage.
The change is expected to benefit more than 250,000 Amazon employees, including those who work at the group’s subsidiary businesses such as Whole Foods, as well as over 100,000 seasonal employees who will be hired over the coming holiday period.
“We listened to our critics, thought hard about what we wanted to do, and decided we wanted to lead,” Amazon founder and chief executive Jeff Bezos said in a statement announcing the change.
“We’re excited about this change and encourage our competitors and other large employers to join us.”
The move comes at a time of growing momentum to raise the federal minimum wage in the US from US$7.25 ($10.11) per hour, which was set in 2009, to US$15 per hour. State and local governments can require employers to pay a higher minimum wage, but most still fall short of US$15, which advocates say is necessary to put workers over the poverty line.
This momentum has not been lost on Amazon, which has announced it will be working with policymakers in Washington, D.C. to advocate for a higher federal minimum wage.
“The current rate of US$7.25 was set nearly a decade ago,” Amazon Global corporate affairs senior vice president Jay Carney said.
“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 the country.”
In doing so, Amazon sets itself apart from the broader retail industry, which, as the conversation around penalty rates in Australia makes clear, is typically not in favour of increasing wages.
GlobalData Retail managing director Neil Saunders acknowledged that while Amazon can afford the increase, there will be an impact on the bottom line.
But Saunders also noted that political pressure has been mounting for Amazon to address wages for some time, and the change may have positive ramifications.
“The narrative that Amazon is an ungenerous employer at a time when the company’s sales, profits, and valuation are soaring does not play well among many customer segments,” Saunders said.
“Although the hike is partly political, there is also an economic imperative to increase wages. Amazon’s superior growth necessitates a lot of recruitment which is becoming increasingly difficult in a tight labor market.
“This is especially so over the holiday season. Without a rise in wages, Amazon would be placing itself at a disadvantage in the labor market.”
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