Amazon’s pay raise could lift all boats
You don’t have to be a warehouse worker to feel the benefit of Amazon’s big pay increase, said Conor Sen at Bloomberg.com. After being bombarded with criticism from labor organizers and Sen. Bernie Sanders over the wages and labor conditions of its workforce, the retail giant announced last week that it was lifting its lowest wage from $11 an hour to $15. The new wages will apply to 250,000 Amazon employees, including workers at the Whole Foods grocery chain, and the more than 100,000 temporary employees Amazon hires during the holiday season. Amazon didn’t pick $15 at random. “Fight for $15” has become a rallying cry for labor activists, who say $15 an hour—more than double the federal minimum—is “a living wage.” Last year, the U.S. median household income was $61,372, roughly what a couple with full-time jobs earning $15 an hour would make. While multiple cities have hiked minimum wages in recent years, and other large employers, including Target and Walmart, have upped pay and benefits, Amazon’s move could mark an inflection point because of the firm’s “influence in the corporate world and in the minds of upper-middle-class Americans.” Soon, $15 an hour could be “the new standard for entry-level wages in corporate America.”
Many companies will have to follow Amazon “or risk a staffing shortfall,” said Ezequiel Minaya and Nina Trentmann in The Wall Street Journal. With the economy booming and the unemployment rate at 3.7 percent, the lowest in 49 years, workers feel increasingly emboldened to quit their jobs and find betterpaying gigs. To hold on to employees, firms—especially those with large lowpay workforces—will have to boost wages. Or they might simply cut their payroll by increasing automation. One payoff for big retailers that lift salaries is that some of these increased labor costs will land back in their coffers, said Jared Bernstein in The Washington Post. You could think of Amazon boss Jeff Bezos as “the service-sector version of Henry Ford, who recognized that unless he raised his workers’ pay, they couldn’t afford the cars they were making.”
Not everyone at Amazon is celebrating, said Jon Harris in the Allentown, Pa., Morning Call. Some veteran warehouse workers already earning $15 an hour or more complain that the company is also cutting performance-related bonuses, so they may “make less under the new structure.” Amazon insists nobody’s pay will be cut. Still, this wage hike “is a moral and strategic masterstroke by Bezos,” said Derek Thompson in TheAtlantic.com. After all the complaints about Amazon’s power, and calls from the Left and Right for it to be broken up, Bezos’ Goliath now gets to play the most powerful advocate for economic fairness.