On Tuesday, October 2nd, Amazon made an official announcement stating that they are raising their minimum wage from $11 an hour to $15 an hour starting next month. The raise is for American employees so far and is undoubtedly a way to head off some of the negative comments about poor working conditions at the powerhouse company.
Amazon now claims that they are going to petition in Washington for an increase in the federal wage. They are urging others, including its retail competitors, to follow its lead in the push for higher remuneration.
It’s said that the new minimum wage is going to benefit over 250,000 full and part-time American Amazon employees and more than 100,000 workers that get hired during peak holiday times.
Jeff Bezos, the founder, and CEO of Amazon stated that they listened hard to their customers and their critics, and thought about the change they wanted to make. After their deliberation, they opted on increasing their minimum wage, which is likely to cost the company one billion dollars USD annually. The recent $20 increase to Prime memberships should help offset the cost. Jeff Bezos also said that they are excited about the change that they are making and that they highly encourage both their competitors and large companies to join them.
Amazon is the world’s second most valuable company, trailing behind Apple, Inc. who was the first company to move into the one trillion-dollar market value. Forbes does list Jeff Bezos as the world’s richest man, holding a net worth of $150 billion USD. Last year, Amazon paid its U.S. staff an average of $34,150.
Target, another retailer corporation raised its minimum wage to $11 per hour in 2017. They also made the promise to boost it to $15 an hour by the end of 2020. Wal-Mart, the world’s largest retailer, increased their minimum wage to $11 per hour earlier in 2018. However, there has been no word if they are joining Amazon’s “Fight for Fifteen” movement.
The higher wages can apply pressure on the financial margins at retailers that already have high costs due to transportation and raw materials. When compared with the average American blue-collar wage, $15 an hour is still an unfavorable comparison. Research done by The Bureau of Labor Statistics shows an average of $22.75 per earning in private, non-farm sectors. It also shows that the median hourly wage of non-management employees in warehousing and transportation is $22.00.
Amazon also made the change to raise the minimum wage in Britain to 10.50 pounds per hour, which is approximately $13.60 USD for staff in the London area. Other parts of England are to see an hourly bump to 9.50 pounds starting November 1st.