Amazon $15 Minimum Wage Hike: Why Now?

E-commerce giant Amazon this week announced it will be raising its minimum wage for employees in the United States, including for seasonal workers, to $15 an hour, benefitting over 250,000 employees as well as 100,000 seasonal workers. The move is part of a two-pronged strategy that will also see Amazon use its lobbying power to advocate for raising the federal minimum wage.

Overall, Amazon will benefit in two important areas. Not only will the announcement help blunt the criticism of the trillion-dollar corporation that had both the left and the right slamming its working conditions and poor wages. Additionally, while the decision is a major win for employees and groups advocating for better pay, it may also give Amazon an edge over its competition, allowing it to attract talent and siphon workers away from competing retailers, according to the Wall Street Journal

An Important Hike

In announcing the decision, CEO Jeff Bezos noted that “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead[.]” He also added that Amazon would “encourage our competitors and other large employers to join us.”

The company, which has been in the news repeatedly for poor labor conditions across its logistics chain from employees at its facilities to the mistreatment of drivers, has seen criticism intensified due to Jeff Bezos’s enormous wealth. Amazon also has a streak of anti-union behavior which is well-documented.

Now, it seems Bezos and Amazon are ready to promote actual change, with the pay increase set to be implemented starting November 1st, and the company committing real resources to lobbying for a federal minimum wage increase. In its press release, Jay Carney—Amazon’s senior vice president for global corporate affairs—noted that the advocacy would “have a profound impact on the lives of tens of millions of people and families across this country.”

Why Is Amazon Announcing This Now?

The announcement’s timing highlights a growing concern for Amazon. After years of bad press and increasingly negative opinion, the company may finally be facing an insurmountable challenge. Criticism on the US Senate floor has been propelled by Senator Bernie Sanders (I-VT) and other Democrats. Sanders has been vocal in his condemnation, noting to TechCrunch that “The taxpayers in this country should not be subsidizing a guy who’s worth $150 billion” and that someone who “has enough money to pay his workers a living wage… does not need corporate welfare.”

The company has also not been immune from the usually pro-corporation conservative aisle either. Prominent pundit Tucker Carlson also recently took Amazon, and especially Bezos, to task for their labor and salary conditions. Carlson decried the shockingly low wages, and the fact that many employees were still forced to qualify and take advantage of social welfare programs. 

The announcement also comes relatively late as other major corporations have already taken similar steps to implement higher minimum wages. This includes major retailers like Target and Walmart, as well as Disney at both of its major theme parks, which have all agreed to hit the $15 mark by 2020. Moreover, it seems to be a response to a recent bill introduced on the Senate floor by Sanders.

The bill, named the “Stop Bad Employers by Zeroing Out Subsidies Act” (abbreviated Stop BEZOS), seems targeted directly at the company, though it applies on a broader scope. Even so, the bill would allow the government to tax companies that force their employees to subsist on welfare, food stamps, and other public assistance.

Although it is not anywhere close to being passed, the bill is a shot across the bow for a company that has long avoided uncomfortable conversations about its labor practices. Although Amazon is unlikely to directly address those accusations and reports for now, the announcement seems like a way to mitigate the negative press the company has been steadily receiving.

A Major Move For Wages

More than the company’s wage hike—which is significant for thousands across the US—the announcement is an about-face for Amazon. By promising to deliver not just money, but real political clout to improving wages, the company could be instrumental in helping workers achieve better conditions across the country, and not just Amazon.

Even so, the announcement is only the start. It remains to be seen what concrete steps Amazon takes to resolve the issue, and how the public will receive them. More importantly, the company must still prove that it is committed to workers’ well-being by addressing its working conditions head-on.