Amazon has announced that it will raise the wages of more than 500,000 workers – but it has no plans to raise its minimum wage by $ 15 an hour.
In light of an ongoing drive to recruit tens of thousands of jobs from its customers, fulfillment, delivery, sorting and fulfillment of packages, Amazon has increased its annual fall payroll review for these teams and plans to roll out salary increases from mid-May. Amazon executive Darcie Henry said in a blog post Wednesday. It will increase the hourly wage from $ 0.50 to $ 3, for a total investment of over $ 1 billion.
“This is in addition to our already industry-leading starting salary of at least $ 15 an hour and the more than $ 2.5 billion we invested last year in bonuses and incentives. additional for frontline teams, ”said Henry, Amazon vice president of human resources. and technology, global consumer, mentionned.
The move follows several weeks of scrutiny of Amazon’s labor practices amid a historic union campaign at a warehouse in Bessemer, Alabama. Union organizers lost the election by a wide margin; while they are difficult some 500 ballots, the leading vote held by Amazon is greater than the total number of disputed ballots.
Although he won this time, “there are many reasons Amazon is concerned about future organizing efforts, especially in areas of the country where an Amazon job doesn’t pay relatively as well as it does.” could in Alabama, ”Arindrajit Dube, an economist professor at the University of Massachusetts at Amherst, told CNN Business in an email.
Amazon already expanded its workforce to more than 1.3 million people globally last year after hiring 500,000 new workers as it struggled to deal with increased demand from the pandemic. Salary increases could help the company attract additional employees amid a tight labor market that has left other businesses, like restaurants, struggling to find workers.
“Growing tension in the job market means its minimum wage of $ 15 is increasingly less effective in recruiting and retaining skilled workers, and a substantial increase can help,” Dube said.
Although the company plans to raise the wages of nearly half a million workers, it has not announced that it will officially increase its minimum wage by $ 15. That would put it in line with rival Costco, which increased its starting rate for hourly store workers to $ 16 an hour in February.
Salary increases for some workers are likely necessary for hiring, but the result is that they can afford a pay rise more than any big retail business. [or] e-commerce company, ”said Molly Kinder, Brookings Institute Fellow. Amazon won $ 21 billion in profits in 2020, and its market capitalization was $ 1.74 trillion at Wednesday’s close.
“As I wrote on Amazon, $ 15 is a bottom, not a cap,” Kinder said.
– CNN’s Nathaniel Meyersohn contributed to this report.