Amazon is boosting its minimum wage for all U.S. workers to $15 per hour starting next month and said it will push for an increase in the federally mandated minimum wage, which now stands at $7.25 per hour.
The company, whose value topped $1 trillion briefly in September, was facing political and economic pressure to raise pay for thousands of employees.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Jeff Bezos, Amazon’s founder and CEO.
Amazon said Tuesday that the raise will benefit more than 350,000 workers, which includes full-time, part-time, temporary and seasonal positions. Employees at Whole Foods, the upscale grocery chain Amazon owns, will get the same pay hike. Some hourly Amazon employees who already make $15 per hour will also see a wage increase, the Seattle company said.
Amazon has faced criticism from labor rights groups and others over pay and working conditions at its warehouses. One of its harshest critics is U.S. Senator Bernie Sanders. His Twitter account, which has nearly 9 million followers, frequently points out the disparity between Amazon’s median employee pay and Bezos’ vast fortune.
Sanders congratulated Bezos Tuesday for “doing exactly the right thing,” and urged other companies to do the same.
Despite its domination, Amazon shares one potential hurdle that is growing higher for almost all employers big and small: a tightening labor market. The unemployment rate is 3.9 percent, near an 18-year low. The most recent statistics from the U.S. Labor Department showed that in August, the pace of hiring rose again and wages grew at their fastest pace in nine years.
Average hourly pay jumped 0.4 percent in August and increased 2.9 percent compared with a year earlier. That’s the fastest annual gain since the Great Recession ended. There are now more available jobs than unemployed people, the first time that has happened in the 18 years that data on open jobs has been tracked.
Raising starting wages isn’t just good publicity for Amazon and other major retailers. It helps them save money that would be lost as trained workers leave for higher pay elsewhere.
Amazon is the second-most valuable in the index after Apple Inc.