Jeff Bezos dares rivals to match Amazon’s US$15 minimum wage
JUST five months after Amazon moved to a US$ 15 minimum wage, chief executive Jeff Bezos has called on other retailers to match it.
“Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our US$15 minimum wage,” Bezos said in a letter to shareholders filed on Thursday with the US Securities and Exchange Commission. “Do it! Better yet, go to US$16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”
Amazon raised its starting pay in November, following criticism about its own pay practices and amid concerns among some veteran employees who said they feared being devalued. But the pay bump also coincided with cuts to employee bonuses and stock grants.
“We listened to our critics, thought hard about what we wanted to do and decided we want to lead,” Bezos said in October.
( Bezos, who is the world’s richest man, also owns The Washington Post.)
On Thursday, Amazon’s largest rival was quick to strike back. “Hey retail competitors out there (you know who you are) how about paying your taxes?,” Dan Bartlett, executive vice president of corporate affairs at Walmart, said in a tweet. He linked to a news report showing that Amazon will pay US$ 0 in taxes on a profit of US$ 11.2 billion in 2018. ( Walmart, by comparison, paid US$ 4.28 billion in income taxes in its most recent fiscal year, according to its documents filed with the US Securities and Exchange Commission.)
The public debate over a higher minimum wage has intensified in recent years, with fast-food restaurants and retail stores serving as political battlegrounds. Service industry workers have engaged in direct advocacy, protests and strikes to push for unionisation and higher guaranteed wages. Groups such as Fight for US$ 15, which have pushed companies to raise starting pay, have seen some success.
Walmart, the largest US private employer, announced last year it would boost its entry wage from US$ 9 to US$ 11 an hour. Target said it is increasing its minimum wage to US$ 13 an hour in June, and aims to offer US$ 15 an hour by 2020. And in a move heralded as a preliminary win by workers and labour advocates, McDonald’s recently announced it would no longer support lobbying efforts to oppose minimum-wage increases.
The federal minimum wage has been stuck at US$ 7.25 an hour since 2009.
Amazon announced its November pay increase shortly after Sen. Bernie Sanders, Vermont, criticised the retail giant for not paying workers a “living wage” and introduced a bill, called the “Stop BEZOS Act,” that would require large employers like Amazon to cover the cost of food stamps, public house, Medicaid and other federal assistance received by employees.
Economists said retailers have little choice but to raise wages if they want to attract - and keep - workers in a competitive market, particularly for large companies like Amazon, which has 250,000 US workers. The unemployment rate remains at historic lows, making it increasingly difficult for retailers to find qualified workers.
“The tight labour market is what’s generating a lot of this,” said Sylvia Allegretto, a labour economist at the University of California at Berkeley. “We’ve had decades of stagnant wages, especially for low-wage workers, so companies have realised they have to raise wages in other to attract applicants.”
It seemed to work at Amazon. The company said more than 850,000 people applied for hourly positions in the month after it announced its US$ 15 starting wage, doubling its previous record. Bezos has a net worth of US$ 115 billion, according to the Bloomberg Billionaires Index. The median Amazon worker was paid US$ 28,446 in 2017, according to company filings, which amounts to about US$ 13.68 an hour.