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Amazon raises minimum wage for US and UK employees Amazon raises minimum wage for US and UK employees
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Amazon has raised its minimum wage for British and American workers, in a major milestone for campaigners pushing for pay increases to tackle rising levels of poverty and inequality.Amazon has raised its minimum wage for British and American workers, in a major milestone for campaigners pushing for pay increases to tackle rising levels of poverty and inequality.
The company, which has become almost a byword for low-paid and low-quality work in recent years, said it would increase the minimum wage to $15 (£11.57) an hour in the US for more than 350,000 workers, while almost 40,000 staff in Britain will get an increase to £10.50 an hour in London and £9.50 across the rest of the country. The company, which has become almost a byword for low-paid and low-quality work in recent years, said it would increase its US minimum wage to $15 (£11.57) an hour for more than 350,000 workers. In the UK 40,000 permanent and temporary staff will get an increase to £10.50 an hour in London and £9.50 across the rest of the country.
Jeff Bezos, the billionaire founder of the e-commerce company, said: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead. Jeff Bezos, the multi-billionaire founder of the e-commerce company who is also the richest man in modern history, said: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.
“We’re excited about this change and encourage our competitors and other large employers to join us.”“We’re excited about this change and encourage our competitors and other large employers to join us.”
Lifting the wage for its workers, designed to tackle the firm’s critics head on, means Amazon UK will pay more than the current national minimum wage of £7.83 for workers over the age of 25. The new rate is also higher than the level recommended by the Living Wage Foundation of £8.75, or £10.20 in London. Lifting the minimum wage is designed to tackle the firm’s critics head on. But some economists said the move was becoming a necessity as a result of labour shortages on both sides of the Atlantic.
The current minimum wage for UK Amazon workers is £8 an hour, meaning they will get a minimum increase in pay of 18%. The rise for London workers will be 28%. Amazon’s new UK minimum pay rates, which will take affect on 1 November, are at least 21% higher than the current national minimum wage of £7.83. The new rate is also higher than the level recommended by the Living Wage Foundation of £8.75, or £10.20 in London.
The current lowest wage paid to US workers is $11 an hour, meaning the minimum rate will rise by 36%. The current minimum for Amazon’s British workers is £8 an hour, meaning a pay rise of at least 28% in London and 18% elsewhere, well above the rate of UK inflation. The lowest paid US workers currently get $11 an hour, meaning an increase of 36%.
The decision to raise workers’ pay comes after years of intense criticism of Amazon over a range of issues ranging from its tax affairs to employment practices, which critics argue have helped it to undercut traditional high street retailers. The company has recently faced a string of protests across Europe by workers demanding better working conditions. Amazon has faced intense criticism in recent years over pay, working conditions and the company’s tax affairs around the world, which critics claim have helped it undercut traditional retailers. Protests took place across Europe this summer by workers demanding higher pay. However, the company said there were no plans for pay rises in countries other than the UK and the US.
The company said the changes would apply for all workers, including those on full-time and part-time contracts, as well as seasonal staff and temporary workers hired by recruitment agencies. Bernie Sanders, one of the company’s most vocal critics, said other companies should now follow Amazon’s lead.
Unions in the UK have repeatedly attacked the way Amazon treats its workers and its agency staff, with undercover reports in the US, and suggestions that work in its British warehouses is akin to life in a prison. News of the pay increase comes only a day after Philip Hammond, the UK chancellor, said Britain was ready to put a new digital tax on web companies. Donald Trump has also attacked Amazon for its tax affairs in an ongoing spat with Bezos.
American workers, led by those in the fast-food industry, have been demanding an increase in the minimum wage as part of the Fight for $15 campaign. The US federal minimum wage, set in 2009, is $7.25. Amazon said its US lobbyists would now seek US congressional support for an increase. Last month, the Archbishop of Canterbury, Justin Welby, attacked Amazon for not paying the living wage and said the company “leeched off the taxpayer” by paying too little in tax.
The move by Amazon follows supermarket chain Walmart, which increased wages for its 1 million workers to a minimum $11 an hour. Target, another US retailer, raised its minimum wage to $11 an hour late last year and promised $15 by 2020. The new US and UK minimum wage will apply to all workers, full and part-time, seasonal employees and temporary workers hired by recruitment agencies.
Neil Saunders, managing director of research company GlobalData Retail, said the US increase was both a “ politically savvy move and a change made out of economic necessity”. It also comes at a time when Amazon’s profits are improving. Union leaders welcomed the move but said Amazon still needed to improve its employment practices. Observers pointed out that a US worker on the $15 minimum would need to work for at least 133 hours to buy just one share in the $1tn company.
In recent months falling levels of unemployment across America have been gradually helping workers to demand higher pay, leading to the fastest wage rises in nine years in the year to August. Bezos owns around 17% of Amazon and has a fortune estimated at $165bn – up $65bn in just the last year.
A slowdown in the number of EU workers coming to Britain since the Brexit vote has also made it harder for companies in the UK to find staff, with potential to force companies to raise their wages. Jeremy Corbyn, the Labour leader, said trade union pressure had prompted the pay rise, adding: “The fight goes on to improve working conditions and get this company to pay its fair share of taxes.”
Donald Trump cut US corporate tax rates earlier this year, arguing that firms would use the extra money to hire more workers and pay higher wages, despite vocal criticism that companies would just pocket the difference and increase payouts to shareholders. Undercover reports have found some Amazon workers needing to urinate in plastic bottles for fear of missing draconian productivity targets, with life in its warehouses described as being akin to a prison sentence.
Amazon has been under mounting pressure to respond to criticism. The news of the pay increase comes only a day after Philip Hammond, the UK chancellor, said the UK would press ahead with a new digital tax on internet companies. Frances O’Grady, the TUC general secretary, said raising the minimum wage was only a start and shouldn’t be seen as an act of generosity.
Last month, the Archbishop of Canterbury, Justin Welby, attacked Amazon for not paying the living wage and said the company “leeched off the taxpayer”. It later emerged, however, that the Church of England held a substantial investment in Amazon shares. “If Amazon is really serious about looking after its workforce it must recognise trade unions. And it must end the exploitative working practices that have seen hundreds of ambulances called to its UK warehouses,” she said.
Amazon has been repeatedly accused of using complex cross-border arrangements to minimise its tax payments, prompting international action to crackdown on corporate tax avoidance. American workers, led by those in the fast-food industry, have been demanding an increase in the minimum wage as part of the Fight for $15 campaign. The US federal minimum wage, set in 2009, is $7.25, which Amazon said it would now lobby to have increased.
Trump has been among the most vocal critics of Amazon and Bezos for its tax affairs. However, observers say the attacks are down to Bezos’s ownership of the Washington Post newspaper, which has been highly critical of the president. Walmart increased wages for its 1 million workers to a minimum $11 an hour earlier this year, while Target, another US retailer, has raised minimum pay to $12 an hour and has promised $15 by 2020.
James Bloodworth, who went undercover working for Amazon in the UK for a book and found a string of issues with its employment practices, said the pay rise was a good first step but urged the firm to tackle other problems, such as the use of “draconian” productivity targets for its staff. Trump cut US corporate taxes earlier this year, arguing that firms would use the extra money to hire more workers and pay higher wages. Critics have argued that companies are more likely to pocket the difference and raise payouts to shareholders.
“The group Organise recently found the 74% of warehouse workers in England were afraid to go to the toilet because of productivity targets. The wage increase by Amazon is welcome, but it doesn’t deal with any of this,” he said. Neil Saunders, managing director of research company GlobalData Retail, said the pay rise was a “politically savvy move and a change made out of economic necessity”. It also comes at a time when Amazon’s profits are improving.
Tim Roache, general secretary of the GMB trade union, also said Amazon needed to go further, improving its working practices and paying taxes. Falling levels of unemployment in the US have started to help workers demand higher pay, leading to the fastest wage rises in nine years.
“Given their owner is the richest man in the world you’d think he could see fit to dig a little deeper, but it’s a start,” he said. In the UK a slowdown in the number of EU workers arriving since the Brexit vote, together with record job vacancies, has made it harder for UK companies to find staff, with potential to force companies to increase pay. Retailers including Amazon are also likely to need more staff ahead of the Black Friday and Christmas shopping season.
Bezos owns some 17% of Amazon and has a fortune estimated at $165bn – up $65bn in the last year.
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