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Amazon Becomes Largest Company To Commit To Minimum $15 Hourly Wage

Oct 2, 2018
Originally published on October 2, 2018 8:56 pm
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Now we turn to Amazon, which has become the largest company to commit to the minimum wage of $15 an hour. The retail giant which is worth almost a trillion dollars faced a lot of criticism after disclosing earlier this year that a median salary at Amazon was less than $29,000. That's just a little over the federal poverty level for a family of four. NPR's Alina Selyukh reports.

ALINA SELYUKH, BYLINE: An Amazon corporate executive stood today before more than 700 workers in a California warehouse and told them they're getting a raise.

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SELYUKH: The executive is Dave Clark. He told me this was one of his best days at work in the 20 years he's been at Amazon. I should note that Amazon is one of NPR's sponsors. I reached Clark at that California warehouse.

DAVE CLARK: What we're announcing now is a $15 minimum cash base before any other add-ons.

SELYUKH: The $15 minimum kicks in on November 1 for all Amazon workers in the U.S. - full time, part time, temps and seasonal. Amazon says that's about 350,000 employees total. I asked Clark how much a warehouse temp job might pay at Amazon now.

CLARK: Our lowest in a facility was just under $11, and it ranges to over $15.

SELYUKH: This was already far above the federal minimum wage of $7.25. But still, Amazon's pay has been facing a lot of criticism as the company ballooned into a global giant with half a million employees, many of whom are drivers and warehouse workers. Amazon is the second most valuable American company. It's run by the wealthiest man in the world, CEO Jeff Bezos.

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UNIDENTIFIED PROTESTERS: (Chanting) Hey-hey, ho-ho, Jeff Bezos has got to go. Hey-hey...

SELYUKH: Two weeks ago, a group demonstrated outside of Bezos' speech in Washington protesting the wide gap between Bezos' wealth and the wages for his lowest-paid employees. Inside, Bezos spoke to several hundred Washington powerbrokers. And he was asked about the growing attention that Amazon was getting from critics who think it's become too big and too powerful. Bezos said scrutiny like that is good for society.

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JEFF BEZOS: All big institutions of any kind are going to be and should be examined, scrutinized, inspected.

SELYUKH: Today, in his statement about the $15 minimum wage, Bezos said the company listened to its critics. One of the most high-profile ones has been Vermont Senator Bernie Sanders.

BERNIE SANDERS: I have to give credit where credit is due. And that is that Mr. Bezos today did the right thing.

SELYUKH: Sanders has long been campaigning for better conditions and pay for minimum-wage workers including at retail and fast-food restaurants. He has introduced a bill called the BEZOS Act, which stands for Stop Bad Employers by Zeroing Out Subsidies. The bill would tax large corporations whose workers rely on federal benefits like food stamps.

SANDERS: And I hope and believe that Amazon's decision today will cause other companies like Walmart, the fast food industry to start raising their wages as well. So it's a good day for American workers.

SELYUKH: Amazon is not the first big retailer to make a public show of raising the minimum wage. Target plans to get to $15 an hour by 2020. Costco hit $14 this summer. But Amazon is now the country's second-largest private employer.

DAVID AUTOR: I thought it was great news. I don't see how it could be other than good news.

SELYUKH: David Autor's an economist at MIT. And he says there are several ways to view Amazon's move skeptically. One, the unemployment rate is low, and there is high demand for workers.

AUTOR: One interpretation is look; it was going to have to raise wages anyway. The labor market is tightening. So it just, you know, decided to get some good publicity out of that.

SELYUKH: Autor says no matter the reason, it's important to remember that raises are good for the workers who get them and their local economies. Lower-wage workers - Autor says they do tend to spend extra earnings. And there's another kind of surprising way that Amazon made waves today. It's saying that it will lobby Congress for an increase in the federal minimum wage. However, Amazon's Dave Clark told me the company does not plan to push for a federal minimum all the way up to $15.

CLARK: We think that 15 is the right number for us. We'll leave it to the experts and Congress to decide what it should be from the federal standpoint.

SELYUKH: But Senator Sanders says he hopes the Bezos stamp of approval convinces the rest of the country that $15 an hour is right. Alina Selyukh, NPR News. Transcript provided by NPR, Copyright NPR.