Amazon ups hourly wage to US$15, vows to advocate for higher pay
Pressure ramps up to attract workers as holiday shopping crunch looms
NEW YORK Amazon is boosting its minimum wage for all U.S. workers to US$15 per hour starting next month and said it will push for an increase in the federally mandated minimum wage, which now stands at US$7.25 per hour.
The company, whose value topped US$1 trillion briefly in September, was facing political and economic pressure to raise pay for thousands of employees.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Jeff Bezos, Amazon’s founder and CEO.
The wage hike also comes at a time when Amazon needs to hire holiday workers amid the tightest job market in nearly two decades, making it tougher to lure workers who have a lot more job choices than just a year ago. Amazon said it plans to hire more than 100,000 holiday workers, who will pack and ship boxes in its more than 100 warehouses around the country.
“We have seen a labour market that is becoming better and better for job seekers, and harder and harder for employers,” said Martha Gimbel, director of economic research and job site Indeed.
Amazon said Tuesday that the raise will benefit more than 350,000 workers, which includes full-time, part-time, temporary and seasonal positions. Employees at Whole Foods, the upscale grocery chain Amazon owns, will get the same pay hike. Some hourly Amazon employees who already make US$15 per hour will also see a wage increase, the Seattle company said.
Amazon has faced criticism from labour rights groups and others over pay and working conditions at its warehouses. One of its harshest critics is U.S. Sen. Bernie Sanders. His Twitter account, which has nearly nine million followers, frequently points out the disparity between Amazon’s median employee pay and Bezos’s vast fortune.
Sanders congratulated Bezos Tuesday for “doing exactly the right thing,” and urged other companies to do the same.
Despite its domination, Amazon shares one potential hurdle that is growing higher for almost all employers big and small: a tightening labour market.
The unemployment rate is 3.9 per cent, near an 18-year low. The most recent statistics from the U.S. Labor Department showed that in August, the pace of hiring rose again and wages grew at their fastest pace in nine years.
Average hourly pay jumped 0.4 per cent in August and increased 2.9 per cent compared with a year earlier. That’s the fastest annual gain since the Great Recession ended. There are now more available jobs than unemployed people, the first time that has happened in the 18 years that data on open jobs has been tracked.
As competition among companies for qualified workers grows more intense, they are increasingly willing to pay more wages.
Raising starting wages isn’t just good publicity for Amazon and other major retailers. It helps them save money that would be lost as trained workers leave for higher pay elsewhere.
Both Walmart and Target say their businesses have benefited from their moves to raise wages. Walmart has seen lower turnover among its employees and has said that its higher pay helped improve customer experience in the stores.
Walmart is the largest private employer in the nation, with a workforce topping 1.5 million employees.
Target said that it has seen a better pool of applicants after its moves to hike hourly pay.
Target’s CEO Brian Cornell recently said that the number of job applicants rose by 60 per cent in the days after Target increased its minimum wage by US$2 to US$11 per hour last year. This past spring, it raised its starting hourly pay for its workers to US$12. Target said last September that it planned to raise hourly pay to US$15 by 2020. With Tuesday ’s move, Amazon has done that already.
Pay for warehouse workers at Amazon can vary by location. It was offering at least US$12.25 an hour in Omaha, Neb., US$13 in Baltimore and US$16.50 in New York, according to recent job postings.
The median pay for an Amazon employee last year was US$28,446 worldwide, according to government filings, which includes fulltime, part-time and temporary workers.