Monday, June 27, 2022

Amazon to raise minimum wage to $15 for US employees


WASHINGTON: said on Tuesday it would raise its minimum wage to $15 per hour for its US employees from next month as it faces criticism for pay disparity from lawmakers and labor unions.

The company also said it would lobby in Washington for an increase in the federal minimum wage and urge other competitors to raise wages – a call that comes in the backdrop of the “Fight for Fifteen” movement, a union-led push for a $15 minimum wage.

Amazon, which became the second company to cross $1 trillion market value last month, on average paid employees $34,123 last year in the United States. The company is led by Jeff Bezos, the world’s richest man with a net worth of nearly $150 billion, according to Forbes.

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

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Amazon’s current minimum hourly wage starts at $11, a source close to the company said.

Retailer Target Corp raised its minimum hourly wage last year to $11 and promised to raise it to $15 an hour by the end of 2020, while the world’s largest retailer Walmart raised its minimum wage to $11 an hour earlier this year.

Higher wages could further pressure margins at retailers that are already getting squeezed by higher transportation and raw materials costs.

Amazon’s move will cost it $1 billion or less annually and the recent $20 price increase for Prime memberships would generate enough to offset the wage hike, Wedbush Securities analyst Michael Pachter said.

Workers have been protesting against fast food chains like McDonald’s and demanding wage increases since 2012.

US Senator Bernie Sanders, a self-described Democratic socialist, has been vocal about the pay disparity at US corporations and has proposed a bill aimed at making large corporations pay workers more.

“The pay increase puts Amazon ahead of the curve when it comes to providing its employee a living wage,” D.A. Davidson analyst Thomas Forte said, adding that the move will help it to attract employees as it opens more brick-and-mortar retail stores.

The company, which bought Whole Foods Market in a $13.7 billion deal last year, opened a general store in New York City in September after launching a few small grocery shops known as Amazon Go in Seattle and Chicago.

Amazon said it would increase its minimum wage for all full-time, part-time, temporary and seasonal employees.

The new minimum wage will benefit more than 250,000 employees in the United States, as well as over 100,000 seasonal employees who will be hired at Amazon sites across the country this holiday, the company said in a statement.

Amazon also raised its minimum wage in Britain to 10.50 pounds ($13.59) an hour for all employees in the London area and 9.50 pounds an hour for staff in all other parts of the country, effective from Nov. 1.

“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, senior vice president of Amazon global corporate affairs.

Amazon shares were marginally down at $1,998.50 in trading before the bell.


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