Amazon ups hourly wage to $15, will advocate for higher pay

Fredrick Soto
October 3, 2018

The company announced that the $15 minimum wage will take effect beginning on November 1.

The wage hike will benefit more than 575,000 workers, which includes full-time, part-time, temporary and seasonal positions.

Sen. Bernie Sanders, who has previously criticized Amazon's treatment of its workers, praised CEO Jeff Bezos Tuesday for his company's new $15 an hour minimum wage for United States employees. The new minimum wage is £10.50 ($13.60) for the London area and £9.50 ($12.30) for the rest of the country. The median annual pay for Amazon workers is less than $29,000 a year, the company disclosed recently. It also adds to momentum for wages, which have been stagnant for 20 years.

Higher wages could further pressure margins at retailers that are already getting squeezed by higher transportation and raw materials costs, but the $15 still compares unfavorably with average US blue collar wages. By way of comparison, Walmart's minimum wage is $11 an hour and Target is aiming to achieve $15 an hour by 2020. But it's more than twice the federal minimum wage of $7.25 an hour.

Amazon employees will continue to receive company benefits, along with the pay increase.

On Tuesday, many Twitter users credited Sanders with successfully pressuring Amazon into raising its pay for direct and agency staff.

All hourly US employees in operations and customer service jobs, including those who made more than $15 an hour, would receive a pay bump in November, a spokeswoman said. His Twitter account, which has almost 9 million followers, frequently points out the disparity between Amazon's median employee pay and Bezos' vast fortune.

"Not only does this make a difference in the lives of hundreds of thousands of Amazon employees, it also sends a message to the fast food industry, the airline industry and the retail industry in general that the time is now to begin paying workers a living wage", he said.

Minimum wage workers are more likely to become unemployed that higher paid employees.

Labor advocates pushing to raise the federal minimum wage have an unexpected new ally: the richest man in world.

Supporters say it's a remedy for widening wage inequality and will boost consumer spending, while opponents counter that it could reduce opportunities for employment, particularly for teenagers and others looking for entry level or low-skilled jobs.

In its announcement Tuesday, Amazon said it would lobby for an increase in the federal minimum wage, which has been $7.25 for a decade. "I'm in favour of higher wages", he told reporters said.

Amazon, which became the second company after Apple to cross $1 trillion in market value last month, paid its US employees on average $34,123 past year.

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