Amazon Sets $15 Minimum Wage For U.S. Employees, Including Temps

Bill Chappell

October 02, 2018 / 4:33 am

caption: Amazon says it will pay all its U.S. workers at least $15. Here, workers prepare shipments at an Amazon Fulfillment Center in California during the early Christmas rush in 2014.

Amazon will pay all of its U.S. employees a minimum of $15 an hour, more than double the federal minimum wage of $7.25. The retail giant, run by the world's richest man, was criticized earlier this year after revealing its workers' median pay was $28,446.

Amazon says the new rate will go into effect on Nov. 1, covering all of its full-time, part-time, temporary and seasonal employees in the U.S.

"We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," said Amazon's founder and CEO Jeff Bezos, as the company announced the new pay scale Tuesday. "We're excited about this change and encourage our competitors and other large employers to join us."

In another change, Amazon will phase out its Restricted Stock Unit program for order fulfillment and customer service employees who are paid hourly. Those workers currently receive shares of stock if they meet certain conditions. But the company says the employees have said "they prefer the predictability and immediacy of cash to RSUs."

For those hourly workers, Amazon plans to replace its RSU grant program with a direct stock purchase plan by the end of 2019. The net effect, the company says, will mean "significantly more total compensation" for the workers.

At the new pay rate, an Amazon employee who makes the new minimum wage would need to work more than 3 weeks (133 hours) to buy one share of the company's stock, which currently sits above $2,000. And that's before taxes and other expenses are taken into account.

The corporation revealed its median pay this past spring, under a new law that requires companies to report the earnings gap between their CEOs and their regular workers. As Bloomberg News reported in April, "Amazon is now the second-largest private employer in the U.S. behind Walmart Inc."

[Disclosure: Amazon is also among NPR's financial supporters.]

After the $28,446 figure drew criticism from Sen. Bernie Sanders and others, Amazon stressed that the number reflects its employees' pay worldwide; the median salary for a full time employee in the U.S., the company said, is $34,123 — a figure it said should be compared to other retailers.

Amazon's market capitalization currently stands near $1 trillion; it paid Bezos, its founder and CEO, $1.68 million last year. But as Amazon's stock has risen, so has Bezos' net worth — it's currently estimated around $165 billion.

Those gains came in the same year that a number of Amazon's employees were found to be relying on the federal Supplemental Nutrition Assistance Program — SNAP — which until recently was commonly called food stamps. That revelation came from The Intercept, which reported that in four out of the five states that provided data, Amazon was one of the top employers of SNAP recipients.

The new minimum wage for Amazon workers far exceeds the $7.25 federal minimum pay; Amazon says it will set the mark for more than 250,000 current employees, as well as more than 100,000 seasonal employees it plans to hire for the coming holiday season.

In addition to committing to higher minimum pay, Amazon says it will "work with policymakers in Washington, D.C., to advocate for a higher federal minimum wage."

The federally mandated minimum pay hasn't risen since 2009. And in that time, the rate "has lost about 9.6 percent of its purchasing power to inflation," the Pew Research Center said last year.

From state to state, the minimum wage varies widely. In 29 states and Washington, D.C., it's higher than the federal rate. But in two states (Georgia and Wyoming), it's lower, at $5.15. And five states have laws that don't require a minimum wage at all, according to the Department of Labor.