Amazon announced on Tuesday that it will pay all its US workers at least $15 an hour — a striking move at a critical time for one of the world’s most profitable companies.
The online retailer, which currently has no set minimum wage beyond those required by law, will begin paying at least $15 an hour to 250,000 current employees and 100,000 seasonal holiday employees, according to a company press release.
Amazon will also lobby the federal government to raise the federal minimum wage, which has been stuck at $7.25 for more than a decade.
The move comes at a tense moment for Amazon. Though the company’s market value recently hit $1 trillion (it’s only the second US company to do so, after Apple), the online retailer is dealing with serious complaints from employees, who describe harrowing work conditions and low pay at Amazon’s warehouses in the United States and across the world.
In July, Amazon workers in Europe went on strike to protest what they describe as hot, windowless, soul-crushing work environments. Sen. Bernie Sanders (I-VT) has repeatedly attacked Bezos for paying warehouse employees so little that US taxpayers end up bearing the cost of their welfare benefits, such as food stamps and Medicaid.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Bezos said in a statement released. “We’re excited about this change and encourage our competitors and other large employers to join us.”
The wage hike is a shrewd business decision
Right now, wages for Amazon’s warehouse employees vary. The Wall Street Journal points out that a job ad for a full-time Amazon warehouse worker in Omaha, Nebraska, starts at $12.25 an hour. In Madison, Wisconsin, wages start at $11. Part-time employees who work in customer service earn about $10 an hour. The new $15 minimum wage will cover full-time and part-time workers as well as temporary employees.
This is great news for blue-collar workers at Amazon, but it’s also a necessary business decision. Retailers are competing fiercely to hire seasonal employees for the holiday season during a period of record-low unemployment. And Amazon warehouses and hubs across the country are fighting for the same workers that Target and Walmart are.
The change may also be an attempt to discourage interest in unionizing. Employees at Whole Foods, which Amazon bought last year, are trying to unionize, fearing that the company will scale back their benefits under Amazon’s ownership. The new wage hike also covers Whole Foods employees, and Bezos is likely worried that the unrest will inspire other Amazon workers to follow suit and is trying to prevent that from happening.
Whole Food employees are organizing
Whole Food employees across the country are trying to unionize to gain some leverage under Amazon’s ownership.
Last month, a group of Whole Foods employees sent an email to workers at all 490 grocery stores, urging them to support the effort to unionize, according to the Wall Street Journal. They said they wanted to “collectively voice our concerns to Whole Foods Market and Amazon leadership” and push for better benefits and compensation.
The union drive organizers are working with the Retail, Wholesale, and Department Store Union, a national labor group based in New York with 100,000 members.
Organizers said recent layoffs and consolidation at Whole Foods stores had endangered employees’ livelihoods, and that more of these moves are sure to follow, according to the Seattle Times. The group wants to push for higher wages, better retirement benefits, paid maternity leave, and lower health insurance costs.
“The success of Amazon and [Whole Foods Market] should not come at the cost of exploiting our dedication and threatening our economic stability,” the organizers wrote in the email.
Amazon denies that it treats its employees poorly and says it is a “fair and responsible” employer. But Whole Foods workers seem unconvinced. Amazon acquired the gourmet supermarket chain was acquired in June 2017, and workers are upset that the company has since laid off hundreds of marketing employees and stopped offering stock options to lower-lever Whole Foods staff.
The union drive will certainly intensify the ongoing labor disputes at Amazon. The company has fought past unionization efforts in Europe, and recent comments from an Amazon spokesperson suggest that the company will not support similar efforts by Whole Foods employees. The spokesperson told the Wall Street Journal that employees should discuss work-related concerns with their managers.
“We believe this direct connection is the most effective way to understand and respond to the needs of our workforce,” she said.
Before Whole Foods employees can form a union, they still need to overcome a few hurdles.
Organizers will need to persuade a majority of employees to sign union membership cards, to show their support for collective bargaining. If that happens, the company can voluntarily recognize the union. If the company doesn’t want to recognize the union, then workers will need to hold an official unionization vote through the National Labor Relations Board. If a majority of employees vote in favor of unionizing, then Amazon and Whole Foods are legally required to recognize the union. Then they can begin negotiating a labor contract.
In the meantime, Amazon will start paying the new minimum wage on November 1, just in time for the holiday season.
Correction: a previous version of this article mistakenly attributed a quote from Jeff Bezos to an interview with the Wall Street Journal. The quote came from an Amazon press release.