Online retail giant Amazon says it’s raising its company-wide minimum wage to $15 per hour for all of its U.S. employees. The announcement comes amid mounting complaints over labor conditions at the company’s warehouses. The new minimum wage will benefit more than 250,000 Amazon employees — including part-time and temporary employees — and 100,000 seasonal employees. Some employees who already make $15 per hour will also see a pay increase.
Employees will lose a perk known as VCP, through which employees are eligible to earn up to 8 percent of their monthly take-home pay. The average worker can earn between $1,800 and $3,000 a year through VCP, depending on the season, hours worked and the fulfillment center’s volume. Warehouse workers will also experience a change in their stock options. As a key attractor for prospective Amazon employees, full-time hourly workers usually receive two to three shares a year after a two-year vesting period. This program will no longer be offered.
Amazon said the effect of the higher pay will be reflected in its forward-looking quarterly guidance. The company also said it would lobby in Washington for an increase in the federal minimum wage and urge other competitors to raise wages. “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,” said Jay Carney, senior vice president of Amazon global corporate affairs. Other large retailers like Target Corp raised its minimum hourly wage last year to $11 and promised to raise it to $15 an hour by the end of 2020. Walmart raised its minimum wage to $11 an hour earlier this year.
The company and CEO Jeff Bezos have been facing criticism for its pay disparity. Amazon’s starting pay varies by location with some paying $10 an hour and others paying $13.50 an hour but the national average pay for an Amazon employee is $11 an hour. For 2017, the average annual pay for an Amazon employee was just under $28,500, according to company filings, while Bezos earned $1.7 million.
Last month Amazon became the second company to cross $1 trillion market value. The company is led by Jeff Bezos, the world’s richest man with a net worth of nearly $150 billion, according to Forbes. Amazon’s pay increase will cost the company $1 billion or less annually and the recent $20 price increase for Prime memberships will generate enough to offset the wage hike.
What do you think of Amazon’s wage increase? Hit the comments section and let us know!
Healthinsurance4everyone's Blog 