Amazon increases US minimum wage to $15 after criticism

Online retail giant Amazon has announced it will raise its starting wage for United States workers to $15 an hour, bowing to criticism over poor pay and working conditions.

The company said on Tuesday 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 Fifteen” movement pushes for higher remuneration.

The increase pushes Amazon’s lowest wage above that of Walmart Inc and Target Corp, but it is still seven dollars shy of the average for a non-management worker in transportation and warehousing in the US as a whole.

The pay rise 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.

Valued at nearly one trillion dollars, Amazon is the world’s second-most valuable company after Apple. It has faced stinging criticism of its labour practices, including gruelling working conditions and lack of job security.

Amazon founder and CEO Jeff Bezos said the company was heeding complaints about its pay structure.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Bezos said in a statement.

Amazon also is encouraging other large US employers to follow its lead and said it would lobby US legislators for an increase in the federal minimum wage, currently at only $7.25 an hour.

Amazon’s pay varies by location, so the increase could be between three and five dollars an hour, depending upon the state.

Praised by Sanders

Senator Bernie Sanders, a fierce Amazon critic who has long campaigned for higher wages as the US recovers from the Great Recession, hailed the decision, saying Bezos and Amazon were “now leading the way.”

“It could well be, and I think it will be, a shot heard round the world,” Sanders said in remarks at the US Capitol Hill, calling on other companies like Walmart and fast-food retailers to follow suit.

“The bottom line is that in the richest country in the history of the world, we’re seeing massive levels of income and wealth inequality. In this country, our standard should be that if you work 40 hours a week, you should not be living in poverty,” he added.

White House economic adviser Larry Kudlow said the move was “terrific,” adding: “Good for them. I’m in favour of higher wages,” he told reporters said.

US department store chain Target announced in September it would raise wages to $15 an hour by 2020. The Walt Disney Company is to begin paying that wage to Disneyland workers in California next year and Disney World employees in Florida by 2021.

The new minimum wage also will apply to employees at high-end grocery store chain Whole Foods, which Amazon acquired last year.

With US unemployment now flirting with historic lows, employers across the country are having difficulty finding enough qualified workers to fill open positions.

Some firms have had to curtail or cancel planned investments as a result. A higher wage may mean Amazon can outbid its competitors for the dwindling supply of available workers.