This month saw Amazon raise its minimum wage for 250,000 permanent employees and another 100,000 seasonal employees in the U.S. who will be hired at sites across the country this holiday from $11.00 to $15.00 per hour which will be more than double the current U.S. minimum wage rate that was set at $7.25 an hour more than a decade ago. The world’s largest online retailer also said it would now lobby in Washington for an increase in the federal minimum wage and urged its competitors to follow its lead on the “Fight for Fifteen” movement pushing for higher remuneration.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” founder and CEO Jeff Bezos said in a statement.
“We’re excited about this change and encourage our competitors and other large employers to join us.”
But the question is, will they?
Historically, large companies have been a driving factor for increases in minimum wage rates. As others tend to follow in response to competitive forces, to prevent other companies from pulling their staff away from them.
Target Corp raised its minimum hourly wage last year to $11.00 and has promised to raise it to $15.00 an hour by the end of 2020, while the world’s largest retailer Walmart raised its minimum wage to $11.00 an hour earlier this year but has not mentioned moving the mark to $15.00.
The strong economy and shrinking labour pool have made workers hard to find for employers of all kinds, including big retail chains, fast-food restaurants and small businesses. Some are boosting pay. But higher wages are harder for small businesses to absorb because they don’t have the massive revenue stream of a company like Amazon, but they may have greater flexibility to offer employees that can’t be offered by companies like Amazon, Target or Walmart.
By Jamie Barrie