Shares of Amazon.com (AMZN) are in focus on Tuesday after the company announced plans to raise the minimum wage for all U.S. employees, effective November 1. The higher pay comes amid a wave of criticism from politicians, including Senator Bernie Sanders, about its treatment of warehouse workers.
$15 MINIMUM WAGE: Earlier this morning, Amazon announced a new $15 minimum wage for all of its U.S. employees. Effective November 1, the higher minimum wage will benefit more than 250,000 Amazon employees — including part-time and temporary employees — as well as another 100,000 seasonal employees, the company said. The company said the new minimum wage will also apply to its subsidiaries, including Whole Foods, and that all of its Operations and Customer Service employees will see an increase, including those who are already making $15. Amazon said the effect of the higher pay will be reflected in its forward-looking quarterly guidance.
MOUNTING CRITICISM: Amazon and CEO Jeff Bezos have been under mounting criticism from Senator Bernie Sanders and other politicians about its pay and the conditions of its warehouses. Sanders and Rep. Ro Khanna last month introduced legislation to tax corporations for every dollar that their low-wage workers receive in government health-care benefits or food stamps. The bill, called the Stop Bad Employers by Zeroing Out Subsidies, or BEZOS, Act, is aimed at companies like Amazon and Walmart (WMT), whose workers rely on public assistance. Sanders had previously targeted Amazon and CEO Jeff Bezos, contrasting Bezos’ wealth — he has a net worth of over $168B — with reports that Amazon’s warehouse workers are paid less than industry averages and many rely on food stamps. In a statement today, Bezos said “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead. We’re excited about this change and encourage our competitors and other large employers to join us.” Additionally, Jay Carney, the SVP of Amazon Global Corporate Affairs said, “We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago… We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.” The company added that it will continue to provide comprehensive healthcare on day 1, company-paid life and disability insurance, up to 20 weeks of paid parental leave, 401k matching, and Career Choice, which pre-pays 95% of associates’ tuition for courses in high-demand fields, whether those jobs are at Amazon or another company.