UPDATE: Oct. 4, 2018: To accommodate the wage increase, Amazon is getting rid of monthly bonuses and stock options for its fulfillment center workers and other hourly employees, Bloomberg reported.
In a statement to Bloomberg, Amazon said that such employees will still see their total compensation increase: "Because it’s no longer incentive-based, the compensation will be more immediate and predictable."
In addition, workers who were already paid above $15 will see raises around $1, the report noted.
Dive Brief:
- Amazon will raise its minimum wage to $15 an hour effective November 1, 2018, the company has announced. The move affects all of the company's full-time, part-time, seasonal and temporary employees in the U.S., including those hired by agencies.
- The increases also apply to employees at Amazon-owned Whole Foods, as well as the company's other subsidiaries, CNN reports. Previously, The Washington Post reported that the company had offered employees small-increment pay raises of up to 55 cents an hour in recent weeks amid heightened scrutiny of working conditions at its fulfillment centers.
- "We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," Amazon CEO Jeff Bezos said in a statement. "We're excited about this change and encourage our competitors and other large employers to join us." The company's senior vice president of global corporate affairs, Jay Carney, said it would work to build Congressional support for federal minimum-wage increases.
Dive Insight:
This news is the latest in Amazon's late-summer saga over workplace conditions and wages, which included the introduction of a bill on Sept. 5 by Sen. Bernie Sanders — named the "Stop Bad Employers by Zeroing Out Subsidies Act," or "Stop BEZOS" bill — that would tax corporations with 500 or more employees for the full amount that employees of such organizations receive in government assistance benefits. Amazon received criticism after reports that it ranked among the top companies in many states whose workers are enrolled in the federal Supplemental Nutrition Assistance Program (SNAP). In a previous email to Retail Dive, an Amazon spokesperson disputed assertions that its employees are over-represented in SNAP.
The e-commerce giant has been quick to fight criticisms from media, government organizations, and both current and former employees. Those arguments were reinvigorated in August, when word leaked that Amazon had begun a social media influence campaign in which it compensated fulfillment center employees to become "FC Ambassadors" — Twitter users sharing positive accounts of their experiences, working conditions, and pay and benefits. Part of the company's defense is that it claims to offer "egalitarian benefits" that are the same across employee groups, reflected in the stated minimum-wage increase.
"Amazon’s announcement that it was raising starting wages for employees to $15/hour, as well as other pay increases, is positive for the company despite the incremental costs that will result," Charlie O'Shea, Moody’s lead retail analyst, said in emailed comments. "Attracting, and then retaining, quality employees is critical for the ultimate success of any retailer, with benefits ranging from reduced hiring and training costs to improved production and employee morale, both of which trickle down to the consumer in the form of better service and an improved overall experience for shoppers."
Stakeholders are still waiting for Amazon to announce the location of its second headquarters, dubbed "HQ2," even after the announcement of 20 finalists. The e-commerce giant is having a major impact on the employment dynamics of communities in which it operates; the e-commerce industry alone accounts for 10% of jobs in some rural communities. Likewise, the city that lands HQ2 could become a fierce battleground for talent for local employers, according to experts who spoke previously with HR Dive.
