Amazon Raises its Minimum Wage
Amazon.com Inc. said it is raising the minimum wage it pays all U.S. employees to $15 an hour, firing back at criticism over its compensation for warehouse workers and stoking competition for labor in the holiday-shopping period.
The new minimum wage will kick in Nov. 1, Amazon said on Tuesday, covering more than 250,000 current employees, or more than 40% of its global workforce. Another more than 100,000 seasonal holiday employees will be granted the higher pay.
Exactly how big a financial commitment the announcement entails is difficult to assess. Starting hourly pay varies across Amazon’s warehouses, though it is generally several dollars lower than $15. Amazon is also giving hourly workers who made $15 or more a raise, though it didn’t specify the increase. But the company is doing away with certain incentive pay and stock compensation for hourly warehouse and customer-service employees, potentially helping offset the cost to the company of the wage increase.
Amazon’s move comes when U.S. unemployment is at a near two-decade low as retailers and shippers compete for hundreds of thousands of workers for the all-important holiday shopping season. Several companies, including United Parcel Service and Macy’s, have announced hiring to staff stores and handle holiday sales and delivery. “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” founder and Chief Executive Jeff Bezos said in a statement.
Amazon, which became the second company after Apple to cross $1 trillion in market value last month, currently pays around $11 per hour. Analysts said the raise would cost it $1 billion or less annually but would be offset by a recent $20 increase in the cost of its Prime memberships.