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Jeff Bezos
Image: picture-alliance/AP Photo/T.S. Warren

Amazon raises US mimimum wage to $15

October 3, 2018

The world's second largest company said it would advocate for minimum wage increases in the US. Amazon has been under fire from workers' groups for its low pay and poor working conditions.


Giving in to criticism over its low wages and poor working conditions, Amazon announced on Tuesday it would raise its minimum wage for US employees from $11 to $15 (€13) per hour from next month.

Amazon had been under pressure from labor and political groups in the US to improve wages and conditions, as the company's market value reached $1 trillion.

"We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," said founder and CEO Jeff Bezos.

Jeff Bezos
Jeff BezosImage: picture-alliance/ZUMAPRESS.com

Encouraging others

Amazon said it would encourage other large US employers to follow its lead. Its lowest pay will now surpass that of its closest US rivals at Walmart Inc. and Target Corp, the latter having promised to raise its lowest wage to $15 by 2020.

"We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country," Jay Carney, Amazon's head of global corporate affairs, said in the statement.

US Senator Bernie Sanders, an Amazon foe who has led the campaign for higher wages in the US, celebrated the company's decision, saying Bezos and Amazon were "now leading the way."

"The bottom line is that in the richest country in the history of the world, we're seeing massive levels of income and wealth inequality. In this country, our standard should be that if you work 40 hours a week you should not be living in poverty," Sanders said.

Checking shelves in Google Madrid
Checking shelves in Google MadridImage: picture-alliance/dpa/J. Lizon

Read more: Flipkart vs. Amazon — the online retail battleground heating up in India

White House approval

The White House gave a positive reception to the plan. President Trump's economic advisor Larry Kudlow said the move was "terrific."

"Good for them," he told reporters. "I'm in favor of higher wages."

The wage hike will affect some 250,000 employees, beginning November 1 and to the more than 100,000 workers the company is set to hire for the holiday shopping season.

Analysts forecast the raise will cost Amazon $1 billion or less annually, but it is expected to be offset by a recent $20 increase in the cost of its Prime membership service.

The Amazon logistics center west of Berlin
The Amazon logistics center west of BerlinImage: Getty Images/AFP/J. Macdougall

UK workers gain too

Amazon employees in the UK will also be included in the minimum wage hike.

Amazon raised its lowest pay rate in Britain to 10.50 pounds ($13.59) per hour for employees in the London area and 9.50 pounds per hour for staff in the rest of the country. 

Read more: Is the Amazon effect behind low inflation?

Amazon under pressure in Germany

As the pay increases for the US and UK were announced, Amazon employees in Germany were heeding calls to strike once again in a walkout that began Monday and extended into Tuesday.

Demonstration Make Amazon Pay in Berlin
Demonstrators greeted Jeff Bezos' Berlin visit in April with protests against AmazonImage: picture-alliance/NurPhoto/E. Contini

German trade union Verdi has been demanding a collective wage agreement for Amazon's 16,000 workers across Germany since 2013, but the retail giant has refused to engage with the union on the issue. The company has thus far agreed to some wage increases in order to deal with the labor stoppages.

"Without persistent strikes, not a penny would have probably come out of Amazon," Verdi Federal Board member Stefanie Nutrberger said. "Those who generate $4.5 million per hour, can at least provide their workers with reliable incomes and legally binding pay increases," she added. 

Last month, German workers also engaged in labor stoppages to demand better work conditions. Verdi has expressed concern about long working shifts, strenuous and monotonous work, and severe physical and mental stress.

jcg/jm (dpa, AFP, Reuters, AP)

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