Amazon raises minimum hourly wage to $15

SEATTLE: Amazon.com Inc said on Tuesday that it would raise the minimum wage to $15 an hour for its United States employees, a rare acknowledgment that it was feeling squeezed by political pressure and a tight labour market.

The raises apply for part-time workers and those hired through temporary agencies.

The company said it would also lobby Washington to raise the federal minimum wage, which has been set at $7.25 for almost a decade.

The new wages will apply to more than 250,000 Amazon employees, including those at the grocery chain Whole Foods Market Inc, as well as the more than 100,000 seasonal employees it plans to hire for the holiday season.

The change will not apply to contract workers. It goes into effect Nov 1.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Amazon’s chief executive, Jeff Bezos, said in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”

Employment has become one of Amazon’s most potent political vulnerabilities as well as its most important political message.

The shift to online shopping, led by Amazon, has forced many retailers like Toys “R” Us and Sears to shut down or lay off workers across the country.

President Donald Trump has criticised the company for hurting traditional retailers, and some lawmakers have called for the company to be broken up.

At the same time, jobs at Amazon’s warehouses and sorting centres have boomed.

The company now employs about 575,000 people worldwide, up more than 50% in the past year, a fact Amazon frequently plays up.

But the pay of those workers has become a growing issue for activists, especially as the fortunes of Amazon and Bezos have skyrocketed.

Amazon’s market capitalisation passed $1 trillion last month, though it has since fallen slightly below that level. Bezos is now the richest person in the world, with a net worth of $165 billion, according to the Bloomberg Billionaires Index.

“I think they saw the writing on the wall. I think they saw the calculation that it was indefensible that a man whose wealth is over $150 billion be able to continue paying workers wages that are so low that they are forced to rely on federal benefits,” Sen Bernie Sanders of Vermont said in an interview after the announcement. “Smart people are willing to change course.”

Sanders and labour organisers have criticised the wages and conditions of Amazon’s workforce.

They have focused on employees at the company’s warehouses, and with the contract drivers who make last-mile deliveries. Some workers at the grocery chain Whole Foods, which Amazon bought last year, have recently begun a push to organise a union.

Amazon had paid a starting minimum wage of $11 an hour, and said its average wage for full-time workers at the fulfillment centres where it packages and sorts orders was more than $15 an hour.

It had not disclosed pay for part-time and contract workers.

Amazon said workers who now make more than $15 an hour will also get a pay bump, though it did not say how much.

The company also announced minimum pay increases to £10.50 in London and £9.50 elsewhere in Britain.

It said the minimum pay would benefit 17,000 Amazon employees and more than 20,000 seasonal workers in the country.

The wage increase comes as the company plans to announce the location of its second headquarters before the end of this year.

The new site, which Amazon says will eventually employ up to 50,000 highly paid technology workers, is widely expected to get what could be billions of dollars in tax breaks and other incentives from state and local governments.