Amazon Raises Minimum Wage
Starting from November, Amazon.com Inc has revealed its plans to raise its minimum wage to 15 dollars per hour for U.S. employees.
The online retailer said it would now lobby in Washington for an increase in the federal minimum wage and urged its competitors to follow its lead as the union-led “Fight for 15’’ movement pushes for higher remuneration. The rise in minimum wage would seek to head off criticism of working conditions at the world’s second most valuable company.
The new minimum wage will benefit more than 250,000 Amazon employees in the United States, as well as over 100,000 seasonal employees who will be hired at sites across the country this holiday, the company said.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,’’ founder and Chief Executive Jeff Bezos said in a statement.
“We’re excited about this change and encourage our competitors and other large employers to join us”.
Amazon, which became the second company after Apple to cross 1 trillion dollars in market value in November, paid its U.S. employees on average 34,123 dollars in 2017.
Bezos is listed by Forbes as the world’s richest man with a net worth of nearly 150 billion dollars.
Amazon’s current minimum hourly wage starts at around 11 dollars and analysts said the raise would cost it 1 billion dollars or less annually and be offset by a recent 20 dollars increase in the cost of Prime memberships.
Retailer Target Corp raised its minimum hourly wage in 2017 to 11dollars and promised to raise it to 15 dollars an hour by the end of 2020, while the world’s largest retailer Walmart raised its minimum wage to 11 dollars 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, but the 15 dollars still compares unfavourably with average U.S. blue-collar wages.
Bureau of Labour Statistics show ordinary workers in the U.S. private non-farm sector on average earn 22.73 dollars an hour.
The mean hourly wage for non-management workers in transportation and warehousing is 21.94 dollars.
Amazon shares, trading lower before the company announced the wage hike, were down less than 0.3 per cent at 1,997.75 dollars in trading before the bell.
