But the pay bump also coincided with cuts to employee bonuses and stock grants.
In the shareholders letter, Bezos said that higher wages is an investment in employees that ultimately benefits the business. But he said Amazon’s decision was made “because it seemed like the right thing to do.” (Bezos also owns The Washington Post.)
On Thursday, Amazon’s largest rival was quick to strike back. “Hey retail competitors out there (you know who you are) how about paying your taxes?,” Dan Bartlett, executive vice president of corporate affairs at Walmart, said in a tweet. He linked to a news report showing that Amazon will pay $0 in taxes on a profit of $11.2 billion in 2018. (Walmart, by comparison, paid $4.28 billion in income taxes in its most recent fiscal year, according to documents filed with the SEC.)
Since Amazon’s announcement in October, grass roots efforts to push working-class economic policies have intensified. Nineteen states raised their minimum wages at the beginning of the year. In Washington, House Democrats have unveiled legislation that would lift the federal minimum wage — which has been idled at $7.25 since 2009 — to $15 by 2024. But the measure faces White House opposition and would need to get through the Republican-controlled Senate.
Public debate also has intensified in recent years, with fast-food restaurants and retail stores serving as political battlegrounds. Service industry workers have engaged in rallies and strikes to push for unionization and higher guaranteed wages. Groups such as Fight for $15, which have pushed companies to raise starting pay, have seen some success.
Walmart, the largest U.S. private employer, announced last year it would boost its entry wage from $9 to $11 an hour. Target said it is increasing its minimum wage to $13 an hour in June, and aims to offer $15 an hour by 2020. And in a move heralded as a preliminary win by workers and labor advocates, McDonald’s recently announced it would no longer support lobbying efforts to oppose minimum-wage increases.
Amazon announced its November pay increase shortly after Sen. Bernie Sanders (I-Vt.) criticized the retail giant for not paying its staff a “living wage” and introduced a bill, called the “Stop BEZOS Act,” that would require large employers like Amazon to cover the cost of food stamps, public housing, Medicaid and other federal assistance received by employees.
Economists say retailers have little choice but to raise wages if they want to attract — and keep — qualified workers, given the nation’s record-low unemployment and competitive job market. That’s particularly true for large companies like Amazon, which has a workforce of 250,000.
“The tight labor market is what’s generating a lot of this,” said Sylvia Allegretto, a labor economist at the University of California at Berkeley. “We’ve had decades of stagnant wages, especially for low-wage workers, so companies have realized they have to raise wages in other to attract applicants."
It seemed to work at Amazon. The company said more than 850,000 people applied for hourly positions in the month after it announced its $15 starting wage, doubling its previous record.
Bezos has a net worth of $115 billion, according to the Bloomberg Billionaires Index. The median Amazon worker earned $28,446 in 2017, according to company filings, which amounts to about $13.68 an hour.