Amazon Raises Minimum Wage to $15 Following Criticism

Less than a week after a PR backlash over reporting on warehouse worker raises ahead of peak season in the range of 35 cents to 50 cents, Amazon put pressure on competitors by announcing an across-the-board $15 per hour minimum wage for its fulfillment center associates starting Nov. 1.

Amazon also announced a minimum wage increase in the UK to £10.50 or $13.59 per hour for all employees in the London area and £9.50 per hour or $12.33 for other parts of the country, also effective Nov. 1. The company has more than 17,000 employees in the UK and over 20,000 seasonal workers.

The U.S. increase will affect all full-time, part-time and temporary workers, including those hired by agencies and seasonal employees, Amazon said in a release. It will benefit more than 250,000 Amazon employees and over 100,000 seasonal employees the company expects to hire this holiday season.

But not so fast: while it was raising the minimum wage with one hand, Amazon was taking away stock incentives and bonuses with the other, according to CNBC and other outlets. It reported that many workers will see less pay as a result of the tradeoff. Amazon disputed this, saying the wage increase “more than compensates” for the loss of incentive pay and options.

Update: Amazon now says it will compensate for the difference in pay between the wage increase and the loss of bonus and options. Time reports that workers now at $15 an hour who were going to get $1 raises under the initial plan will now see a $1.25 bump. Amazon is also introducing a new cash bonus of $1,500 to $3,000 for workers with the company for five, 10, 15 and 20 years. There is also a $100 good attendance bonus in December.

CEO Jeff Bezos threw down the gauntlet to other ecommerce and retail companies in announcing the wage increase.

“We listened to our critics, thought hard about what we wanted to do and decided we want to lead,” Bezos said in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”

At the same time Amazon plans to lobby Congress for an increase in the federal minimum wage.

“The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, Senior Vice President of Global Corporate Affairs for Amazon and former spokesman for President Barack Obama. “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.”

Amazon caught flack for offering up thin raises last week after it was first reported by the Washington Post, which ironically is owned by Bezos. Wage pressure has been pushing upward with more force lately as unemployment remains low.

The raise will make life even more difficult for competitors who routinely see fulfillment center workers hired away when the flush ecommerce giant offers a pay differential above the market rate.

Sen. Bernie Sanders, I-VT, who has been attacking Amazon and Bezos over a pay rate that forced some workers to use social safety nets to make ends meet, lauded the CEO and company for this latest move. His “Stop BEZOS Act” sought to tax Amazon and other large employers in an effort to make up for what is doled out in public benefits to low-wage workers.

“Today I want to give credit where credit is due, and that is that Mr. Bezos and Amazon have done the right thing,” Sanders told the Washington Post. “This is a significant step forward for many thousands of Amazon employees.”