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CNN Business
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Amazon raises its minimum wage to $15 per hour for all U.S. employees.
The change will go into effect on November 1 and will apply to full-time, part-time and temporary workers. Amazon (AMZN) says the $15 minimum wage will benefit more than 250,000 Amazon employees, as well as 100,000 seasonal workers.
“We listened to our critics, thought carefully about what we wanted to do, and decided to take the lead,” said Jeff Bezos, Amazon’s founder and CEO. “We’re excited about this change, and we encourage our competitors and other large employers to join us.”
The change applies to Whole Foods and all other employees of its subsidiaries.
Amazon also said its public policy team would begin pushing for an increase in the federal minimum wage, which has stood at $7.25 an hour since 2009.
“We’ll leave it to Congress and the industry to decide what the right number is,” Dave Clark, the company’s senior vice president of global operations, told CNN’s Christine Romans. “But for us, that number is $15.”
Amazon’s size and explosive growth give the decision an importance that goes far beyond the hundreds of thousands of people who will directly benefit from it.
Amazon is one of the largest employers in the United States and has created more American jobs over the past decade than any other company.
The move also raises the stakes for potential workers at Amazon’s next headquarters. The company plans to create a second headquarters, known as HQ2, that could house up to 50,000 jobs. Amazon has named 20 cities as finalists, including Atlanta, Chicago and Washington, D.C.
Critics, including independent Sen. Bernie Sanders of Vermont, have said Amazon doesn’t pay its workers enough. They have contrasted it with Jeff Bezos’s spectacular wealth: He is the world’s richest man, with an estimated fortune of $165 billion.
“I want to give credit where credit is due,” Sanders said Tuesday. “I want to commend Mr. Bezos for doing exactly the right thing.” He added that he looks forward to working with Bezos to push for a $15 federal minimum wage.
Bezos responded by thanking the senator. “We are thrilled by this initiative and hope others will join us as well,” he wrote in a tweet.
Across the country, workers have been pushing for a $15 minimum wage, including through the movement known as the Fight for $15.
Supporters of the measure say it addresses widening wage inequality and will boost consumer spending, while opponents counter that it could reduce job opportunities, particularly for teenagers and others seeking entry-level or low-skilled jobs.
Some companies have responded to public pressure.
In September, Target raised its minimum wage for new employees to $12 an hour and plans to raise it to $15 by the end of 2020. Disney reached an agreement with its unions to pay a minimum of $15 an hour at Disneyland in California by 2019 and at Disney World in Florida by 2021.
And Walmart, the nation’s largest private-sector employer with more than 1 million U.S. workers, raised its minimum wage to $11 in February.
Clark said Amazon wanted to make this change sooner.
“We decided: why wait? We should really do it now,” he told Romans.
Paul Sonn, director of the state policy program for the National Employment Law Project, said Amazon’s announcement would put pressure on other companies to raise wages and on Congress to raise the national minimum wage. Twenty-nine states have their own minimum wages that are higher than the federal minimum wage of $7.25.
Neil Saunders, managing director of consultancy GlobalData Retail, said a higher minimum wage could also help Amazon recruit workers.
“Without wage increases, Amazon would be at a disadvantage in the labor market,” Saunders said. The company’s rapid growth requires “a lot of hiring, which becomes increasingly difficult in a tight labor market,” he said. “That’s especially true during the holiday season.”
Saunders added that the decision was “politically sound”.
Last month, Amazon said the average hourly wage for a full-time associate at its fulfillment centers was already more than $15 per hour.
Last year, Amazon’s median wage was $28,446, according to a company filing. That’s $13.68 an hour. The company said that figure includes international and part-time employees.
The company also announced that it would increase the minimum wage for British employees starting November 1. The new minimum wage is £10.50 ($13.60) for the London area and £9.50 ($12.30) for the rest of the country. More than 37,000 employees, including seasonal workers, will be affected by the change.
The current minimum wage in the UK for adults over 25 is £7.83 ($10.15).
Cnn