Author Topic: Amazon to Raise Its Minimum U.S. Wage to $15 an Hour  (Read 154 times)

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uncleleroy

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Amazon to Raise Its Minimum U.S. Wage to $15 an Hour
« on: October 03, 2018, 08:01:31 PM »
From the WSJ. It is a long article that I am posting in its entirety since not everyone gets WSJ.

 Amazon.com Inc. AMZN -0.94% said it is raising the minimum wage it pays all U.S. employees to $15 an hour, firing back at criticism over its compensation for warehouse workers and stoking competition for labor in the holiday-shopping period.

The new minimum wage will kick in Nov. 1, Amazon said on Tuesday, covering more than 250,000 current employees, or more than 40% of its global workforce. Another more than 100,000 seasonal holiday employees will be granted the higher pay.

Exactly how big a financial commitment the announcement entails is difficult to assess. Starting hourly pay varies across Amazon’s warehouses, though it is generally several dollars lower than $15. Amazon is also giving hourly workers who made $15 or more a raise, though it didn’t specify the increase. But the company is doing away with certain incentive pay and stock compensation for hourly warehouse and customer-service employees, potentially helping offset the cost to the company of the wage increase.

Amazon, which has a market value of nearly $1 trillion and revenue last year of $178 billion, can absorb the added costs, analysts say. The goodwill gained with politicians and workers could outweigh any hit to profitability, and such a move gives Amazon a possible advantage in hiring tens of thousands of workers during a competitive holiday season and in a low-unemployment environment.

More broadly, Amazon’s commitment provides fresh evidence that the strong job market is pressuring businesses to bid up wages for lower-skilled workers and spreading the benefits of a long-running economic expansion more widely. Meanwhile, politicians in several states are working to boost hourly pay. In California, the state’s minimum wage is set to rise to $15 an hour in 2022.

Amazon Chief Executive Jeff Bezos used the announcement to go on the offensive against rivals as well as politicians and others who have questioned the company’s treatment of workers.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Mr. Bezos in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”

Amazon’s sheer size and market dominance has made it a corporate target of politicians on the left and right. They claim the company mistreats its workers and doesn’t pay its fair share in taxes, as well as criticizing it for its impact on the broader economy and traditional retailers.

Analysts said the wage changes are likely to result in a small ding to profitability. A 50-cent raise an hour across 250,000 employees, for example, would imply a posttax impact on operating profit of roughly $200 million, or 1% or 2%, according to Colin Sebastian, an analyst with Robert W. Baird & Co.

But Amazon’s revenue growth is so strong—consistently hovering around 40%—that it has managed to post record profits even in periods of heavy investments. In July, the company reported its quarterly profit topped $2.5 billion for the first time on nearly $53 billion in revenue.

Amazon’s pay raise quickly won political praise. President Donald Trump’s chief economic adviser, Larry Kudlow, told reporters at the White House: “Good for them. I’m in favor of higher wages.” Mr. Trump has been a big Amazon detractor, in part for its effect on other retailers.

One possible political convert is Sen. Bernie Sanders, who has made Amazon and Mr. Bezos a favorite target in his messaging about wealth inequality. He recently introduced a bill, called the BEZOS Act, aimed at taxing big companies whose employees rely on federal benefits to make ends meet.

On Tuesday, the Vermont independent struck a different tone. “What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be a shot heard around the world,” Sen. Sanders said Tuesday in a statement. “I urge corporate leaders around the country to follow Mr. Bezos’s lead.”

Amazon’s announcement comes as the retail and logistics industries are kicking off their hiring for the year-end holidays, and experts in those fields say the e-commerce giant may have gained a leg up in competitive labor markets.

Minimum pay of $15 an hour puts the online retail giant in the top 25% for starting wages for general warehouse jobs in the U.S., said Brian Devine, senior vice president of the logistics-staffing company ProLogistix. “This will impact every other company’s ability to attract and retain workers.”

U.S. retailers are already scrambling to find enough workers to staff stores. Target Corp. has said it plans to hire 120,000 seasonal workers. For their warehouses, United Parcel Service Inc. has said it will hire roughly 100,000 seasonal workers, while FedEx Corp. has said it will take on 55,000.

Amazon said its salary increase will cover part-time and temporary workers hired by agencies. It also covers recently acquired Whole Foods Market employees, where an effort is under way to unionize.

Wages in several low-skill occupations including warehouse workers, retail clerks and restaurant waiters are rising at a faster rate this year than overall hourly pay, according to Labor Department data. Declining unemployment points to a scarcity of workers that is forcing employers to pay more.

Several large retailers have raised their minimum wages in the tight labor market. Walmart Inc., which employs 1.5 million people in the U.S., in January said it would raise starting hourly pay to $11 for all U.S. employees. That followed a similar move by Target, which raised its starting hourly pay to $12 in September, from $11 last year, and set plans to lift it to $15 by 2020.

Low-wage workers are more likely than higher-wage workers to jump from job to job for better pay when unemployment is low, economists said, making them among the bigger beneficiaries at this stage of a business cycle.

The national jobless rate has fallen to 3.9%, near low levels last seen in 2000. In all, there are more available jobs in the U.S. than unemployed workers ready to take them. There were a record-high 6.9 million job openings in July, including 757,000 in retail and 299,000 in the category that includes transportation and warehousing.

According to a survey of job postings at Amazon, starting pay for warehouse and customer service workers can be as low as $10 an hour and as high as $14. The overall median annual salary for Amazon workers world-wide was $28,446 last year, which works out to a median of about $13.68 an hour, but that includes both software engineers and lower-wage workers abroad. Amazon declined to provide a national average for its starting pay.

In April, a company spokeswoman told The Wall Street Journal that Amazon had been paying its full-time U.S. warehouse workers an average hourly wage of more than $15 including the stock and incentive bonuses that it is now eliminating.

The restricted-stock program, which vests over two years, is being replaced with a direct stock-purchase plan. The company said the net effect of this change still will result in a higher total compensation for employees. It is also phasing out incentive pay targets, perks which typically reward things like attendance or seniority.

Eliminating those benefits may reduce the attractiveness of working at Amazon warehouses longer term.



Southern Jewel's Fab Finds

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Re: Amazon to Raise Its Minimum U.S. Wage to $15 an Hour
« Reply #1 on: October 04, 2018, 10:44:57 AM »
The restricted-stock program, which vests over two years, is being replaced with a direct stock-purchase plan. The company said the net effect of this change still will result in a higher total compensation for employees. It is also phasing out incentive pay targets, perks which typically reward things like attendance or seniority.

Several businesses (Publix for one) I know of started within the last year(s) making the vests begin at the 2 year mark. They also did away with bonuses for all but the higher ups in stores. Higher up meaning store manager. Not the employees that helped that store to be successful.
Thank goodness, husband retired. It's not the company that it once was. 
Incentive pay such as bonuses tend to errode the morale of employees.

Damn shame.
I don't like it.

uncleleroy

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Re: Amazon to Raise Its Minimum U.S. Wage to $15 an Hour
« Reply #2 on: October 05, 2018, 01:45:27 PM »
The focus for all of the politicians has been this mythical $15 per hour wage. The media and politicians have made this the mythical amount at which people can live "with dignity". Well, the politicians and other "activists" are getting exactly what they wanted. And it comes at the expense of all the other benefits that corporations gave to their employees.

Be careful what you wish for. You just might get it. Just don't forget about the law of unintended consequences.

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Re: Amazon to Raise Its Minimum U.S. Wage to $15 an Hour
« Reply #3 on: October 06, 2018, 11:12:39 AM »
I was wrong.
Spoke with several employees still with the store(s) in the last few days.
They stated the bonuses going away and the uppage in their weekly salaries even out in the end.
Plus, they don't have to wait for the anticipated bonus.
They are essentially getting it weekly/biweekly/monthly in their paychecks.
modified to add: Still not a living wage. STILL not a living wage. STILL NOT A LIVING WAGE!

Still doesn't address that the employees aren't being paid a decent living wage.

Is this even a raise in pay?
Nope.
Hell no.
Absolutely, Positively, Hell F'ing No.
Not even a start.

$15.00 an hour is BS as a living with dignity wage.
Should be much higher.
MUCH MUCH Higher!
Cost of living wages?
The mid 60s was the last time it was a fair wage to counter the rate of inflation.

As far as the vestment of stock? Waiting 2 years?
In my opinion, it's too long but I haven't studied the current amount of employees that stay on after a year.
Some of my husband's friends are still with Publix that he started with.
They won't retire as they fear boredom.
Adults under 45 do not stay with a business for lifetime as my husband did for 30 years.

My soon to be daugherinlaw works for redbutler.com (virtual assistant) in management.
All done from home.
And for a wage that is way above $15.00.
She is working on her masters and this is an amazing opportunity that suits her schedule and her life as it is now.
She has some benefits (medical). <---- modified as I can't be sure that she accepted the medical and decided to buy her own policy via ACA
This is fine with her as she will be done with her masters in a year and a half.
Same with my nephew, Amazon Customer Service online.
He's working on his masters and the ability to earn income, have gainful employment and move towards his masters.

Is the pay enough to live with dignity for either?
Nope.

Should it be?
Most certainly.

Politicians?
Most would be happy with dropping the minimum pay much less giving a heads up to move discussion forward with a wage that persons can live on with dignity.
Have them live one year on one of the salaries of their voters and they couldn't do it. They wouldn't do it nor would they last.

Fifteen is a starting point.
Move it up from there.

Don't get me started on my soapbox...
It's scary.



« Last Edit: October 08, 2018, 10:50:24 AM by Southern Jewel's Fab Finds »

  

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