Caving to Pressure, Amazon Hikes Minimum Wage to $15 an Hour

Kenny Grant
October 3, 2018

Amazon shares, trading lower before the company announced the wage hike, were down less than 0.3 percent at $1,997.75 in trading before the bell.

In the UK, Amazon said, the minimum wage will be 10.50 pounds an hour in London and 9.50 pounds in other areas.

Bezos also thanked Sanders for his words of support, noting that Amazon is "excited about this, and also [hopes] others will join in".

"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.

U.S. department store chain Target announced in September it would raise wages to $15 an hour by 2020. The company would not state what the federal minimum wage should be, saying Congress should decide that number. Small employers can meet this requirement by paying no less than $12.00 per hour in wages and contributing at least $3.00 per hour toward an employee's medical benefits and/or reported tips. Bezos' acknowledgment that Amazon took a look at itself and decided it would change is a major win for Amazon's critics and employees, but it's also a win for Amazon. Last month, Sanders introduced the Stop Bad Employers by Zeroing Out Subsidies Act, or Stop BEZOS, which would levy a tax on large companies equal to the value of the public benefits that their workers receive.

Amazon, however, on Tuesday was no longer on the other side of the argument, with the company drawing praise from union activists. That is more than double the federal minimum wage of $7.25, which the company also said that it would "advocate" to increase.

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The increase pushes Amazon's lowest wage above that at Walmart Inc and Target Corp, but it is still $7 shy of the average for a non-management worker in transportation and warehousing in the United States as a whole.

The pay raise will apply to 250,000 employees starting November 1 and to the more than 100,000 seasonal workers the company expects to hire for the holiday shopping season, it said. Walmart raised its starting wages to $11 per hour this year.

"Good for them. I'm in favor of higher wages", he told reporters. As Bloomberg News reported in April, "Amazon is now the second-largest private employer in the USA behind Walmart Inc".

Christine Owens, executive director at advocacy group National Employment Law Project, said Amazon's call for changes at the federal level was a "significant" move.

Amazon is hardly the only company to boost wages for its lowest-paid workers. Target said last September that it planned to raise hourly pay to $15 by 2020. The retail giant, run by the world's richest man, was criticized earlier this year after revealing its workers' median pay was $28,446.

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