Amazon’s wage hike may help lift pay elsewhere

WASHINGTON — After years of sluggish pay gains, the economy may be starting to work for America’s lowwage workers.

Amazon’s announcement Tuesday that it will raise its minimum wage to $15 an hour will intensify pressure on other companies to lift their pay levels as well. Among the most likely to do so: Amazon’s rival retailers and warehouse operators, many of which are facing the prospect of staff shortages as they ramp up for the holiday shopping season.

“This is going to be a big deal for very low-wage workers,” said Ben Zipperer, an economist at the liberal Economic Policy Institute. “It’s going to compel other businesses to raise wages as well.”

Low-wage workers typically receive higher pay from an expanding economy only after higher-income people have benefited, economists note. Now, with the unemployment rate near a 50-year low and the number of job openings exceeding the number of unemployed, more lower-income Americans are finally receiving meaningful raises.

Low-paid workers “get kicked the most in the recession, and they generally benefit more later in the boom,” said David Neumark, an economist at the University of California, Irvine.

Accordingly, retailers, who employ a sizable share of the nation’s lower-paid workers, have been stepping up pay increases. Average hourly wages for retail workers, excluding managers, rose 4 percent in August compared with 12 months earlier.

Amazon’s announcement will likely embolden labor activists and unions that have been pressing large fast-food and retail chains to raise pay, provide more reliable work schedules and allow for union representation.

Amazon said Tuesday that it will lobby to raise the federal minimum wage from $7.25 an hour, though it did not say what figure it would push for. The impact of a higher federal wage, though, would likely be modest, because more than 20 states have minimum wages above the federal level.

A higher federal minimum wage could intensify pressures on smaller businesses that don’t have the financial resources that Amazon has to raise pay significantly.