Cecil officials applaud Amazon’s hike to $15 wage
Co. cuts other benefits, leading to criticism
NORTH EAST — Amazon’s bold announcement that it would raise its minimum wage to $15 an hour for its U.S. employees next month has sent shockwaves through Cecil County, home to one of the e-commerce giant’s distribution facilities.
“It’s great for the employees, and it’ll definitely keep things competitive among other businesses,” Cecil County Economic Development Director Chris Moyer said. “It also might show the value of retaining workers through increased wages.”
Amazon announced Tuesday that it planned to pay its employees more after facing tremendous political and economic pressure. Its rivals Walmart and Target had slowly started to raise wages in the face of protests that the federal minimum wage of $7.25 was not enough for a living. Employees that were already paid $15 an hour would see a $1 per hour raise, as reported by Bloomberg this week.
However, Amazon will also phase out monthly bonuses that could top hundreds of dollars as well as its program for 2020 and 2021 stock options for employees who could buy shares of the stock currently worth more than $2,000, replacing it with a direct stock purchase plan before the end of 2019. The hourly wage hike more than compensates for the
phase-out of both incentives, according to Rachael Lighty, regional manager of external communications for Amazon.
“We’ve heard from our hourly fulfillment and customer service employees that they prefer the predictability and immediacy of cash to [stock options],” she wrote. “The net effect of this change and the new higher cash compensation is significantly more total compensation for employees, without any vesting requirements, and with more predictability.”
Lighty added that there are no changes to the company’s personal, vacation or unpaid time off, but stressed the new minimum wage was in addition to other perks.
“The Amazon $15 minimum wage is on top of our industry-leading benefits — including comprehensive health care on day one, 20-week paid parental leave, and Amazon’s innovative career choice program, which pre-pays 95 percent of tuition for courses in high-demand fields,” she wrote in a email.
The online retailer, which started two decades ago as a bookseller, has about 100 warehouses in the country. More than 5,000 employees work at three sites in Maryland, including the 1,100 employees who work in the North East fulfillment center in Principio Business Park.
Not all Amazon employees are thrilled with the changes to compensation though.
At least four longtime workers, who spoke to The Associated Press on condition of anonymity for fear they would be fired, said the $1 an hour raise would not make up for the lost benefits. The employees, all of whom work in different warehouses around the country, said the $15 minimum wage was great for new workers, but the math didn’t work out for those who have worked at Amazon’s warehouses for a few years.
“I feel hugely disrespected,” a worker at the North East fulfillment center told AP. “The ones who are loyal should be rewarded for loyalty, not smacked in the face.”
Amazon also announced it would be a leading voice in pushing Congress to raise minimum wage. Maryland raised its minimum wage to $10.10 this July after several small increases over the past few years.
Cecil County has become a hub of several manufacturing and distribution employers in the Mid-Atlantic region in the last two years, with companies like Lidl, Fortress Steel, TRUaire setting roots here along with the impending arrival of Medline. But Moyer said he was unsure how other retailers and businesses would take Amazon’s grand announcement, regarding matching that wage or the understanding that some workers would have more money to spend.
“It’s still too early to tell how this will affect other businesses. We’re putting our feelers out to see the exact impact on the economy,” he said. “But it’ll be great for the workers, probably tough on the employers.”
To the Susquehanna Workforce Network, a nonprofit focusing on workforce development in Cecil and Harford counties, Amazon’s announcement sent a different message: the labor force is tightening. Unemployment in America hit a notable low of 3.9 percent in April. Cecil County’s unemployment rate has been slowly dropping and was reported at 4.9 percent in August, according to the state’s local area unemployment statistics.
“With a tight labor market, companies do whatever they need to do to get staff,” said Bruce England, SWN executive director. “We have many potential workers on the sidelines, so when wages go up, it looks like the opportunity is ripe for them to jump right into the workforce.”
England also pointed out that Amazon’s timing also would help drawn in thousands of workers to help pack and ship boxes during the holiday season. He noticed that Amazon or third-party recruiters have aggressive recruitment events at the SWN offices every day.
“Companies try different things to get workers, whether it’s a sign-on bonus, alternative work schedules or incentives. Warehouses are a different kind of work. It’s physical,” England said. “Not just with Amazon, but with companies in general, when they try different things, it’s to make them more attractive than others.”
An associate works to ship a package inside the Amazon fulfillment center near North East.