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Amazon to Raise Minimum Wage for All U.S. Workers to $15 Amazon to Raise Minimum Hourly Wage for All U.S. Workers to $15
(35 minutes later)
SEATTLE — Amazon on Tuesday said it would raise the minimum wage to $15 for all of its United States workers. SEATTLE — Even Amazon can get squeezed by political pressure and a tight labor market. The online giant on Tuesday said it would raise the minimum wage to $15 an hour for all of its United States workers.
It said the pay increase would include part-time workers and those hired through temporary agencies. The company said it would also lobby Washington to raise the federal minimum wage.It said the pay increase would include part-time workers and those hired through temporary agencies. The company said it would also lobby Washington to raise the federal minimum wage.
Amazon said the new wages would apply to more than 250,000 Amazon employees, including those at the grocery chain Whole Foods, as well as the more than 100,000 seasonal employees it will hire for the holiday season. It had previously said the average hourly wage, including stock and incentive bonuses, for a full-time workers at the fulfillment centers was more than $15 an hour, but it had not disclosed pay for part-time and contract workers. Amazon said the new wages would apply to more than 250,000 Amazon employees, including those at the grocery chain Whole Foods, as well as the more than 100,000 seasonal employees it will hire for the holiday season. It goes into effect on Nov. 1.
The company had previously said the average hourly wage, including stock and incentive bonuses, for a full-time workers at the fulfillment centers was more than $15 an hour, but it had not disclosed pay for part-time and contract workers.
Amazon has come under increased scrutiny for the wages and conditions of its work force, particularly at the fulfillment centers where it packages and sorts orders, 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 made a push to organize a union.Amazon has come under increased scrutiny for the wages and conditions of its work force, particularly at the fulfillment centers where it packages and sorts orders, 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 made a push to organize a union.
Senator Bernie Sanders, the liberal independent from Vermont, has taken on Amazon directly, pointing to new financial disclosures from the company showing that its median pay is $28,446, meaning half of its employees make less. Amazon, which is typically reserved when responding to criticism, publicly pushed back, saying Sanders’s statements were “misleading” and that median pay for its full-time employees in the United States was $34,123. The wage increase comes as Amazon’s fortunes, as well as those of its chief executive, Jeff Bezos, have ballooned. Amazon’s market capitalization passed $1 trillion last month, though it has since fallen slightly. And last year Mr. Bezos became the richest man in the world, with a net worth of $165 billion, according to the Bloomberg Billionaires Index.
The average wage for retail sales people across the United States is $13.20 an hour, according to federal data. The company also plans to announce the location of its second headquarters before the end of this year, and the new site, which Amazon says will eventually employ 50,000 highly-paid workers, is widely expected to get what could be billions of dollars in tax breaks and other incentives from state and local governments. The size of the potential taxpayer payout, and the secrecy around the bidding process, have frustrated even some lawmakers in cities hoping to land the headquarters.
For all retail workers, including sales people, cashiers and supervisors, the average wage is $18.85. Senator Bernie Sanders, the liberal independent from Vermont, has taken on Amazon directly, pointing to new financial disclosures from the company showing that its median pay is $28,446, meaning half of its employees make less. Amazon, which is typically reserved when responding to criticism, publicly pushed back, saying Mr. Sanders’s statements were “misleading” and that median pay for its full-time employees in the United States was $34,123.
The tight labor market has slowly been pushing wages higher. Last year Target announced it would raise minimum pay to $15 an hour by 2020, and Costco has raised its starting pay to at least $14 per hour. “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Mr. Bezos said in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”
The shift to online shopping has both created a boom in jobs at fulfillment centers and a bust in jobs at physical retailers stumbling to stay in business. Employment has become Amazon’s most potent political vulnerability as well as its most important political message. The shift to online shopping has led many retailers like Toys “R” Us and Sears to shut down and layoff staff in cities and towns across the country, while jobs at the warehouses and sorting centers that move Amazon’s goods have boomed. It employs about 575,000 worldwide, up more than 50 percent in the past year alone, and its growth has followed the divergent paths of the economy, with highly-skillled tech workers in Seattle making well over $100,000 and warehouse employees earning lower wages.
Even as Amazon pushes toward using more robots at its warehouses and expanding experiments like Amazon Go, its cashierless convenience stores, it still has a huge need for workers, particularly as the holiday season approaches. With the United States unemployment rate below 4 percent, the tight labor market has made it harder to attract the workers it and other retailers it needs.
The smaller supply of prospective workers has slowly been pushing wages higher. The average wage for retail sales people across the United States is $13.20 an hour, according to federal data. For all retail workers, including sales people, cashiers and supervisors, the average wage is $18.85.
Last year Target announced it would raise minimum pay to $15 an hour by 2020, and Costco has raised its starting pay to at least $14 per hour. In January, Walmart said it was raising starting wages for employees to $11 after the new tax law passed, though critics noted that it was laying off workers as it tried to quietly close 63 Sam’s Club stores.
“At the moment in the United States unemployment is pretty low, and Amazon may be struggling to recruit and retain employees,” said Alan Manning, an economics professor at London School of Economics who has studied minimum wage policies. “It’s also a bit of good publicity.”
Indeed, less than an hour after the announcement on Tuesday, Dave Clark, Amazon’s senior vice president in charge of operations, posted a video on Twitter of employees at a fulfillment center in Southern California cheering as he broke the news to them.
The federal minimum wage has been set at $7.25 for almost a decade, though more than 20 states and cities have higher wage floors. In 2014, Amazon’s hometown Seattle was one of the first major cities to pass a law that would raise wages to $15.
“Once you’re paying a higher wage you tend to want your competitors to also pay a higher wage,” said Professor Manning. “If youre costs are going up, you’d also quite like your rivals’ costs to go up as well.”
Amazon 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.