'Bowing to Pressure': Amazon Announces Minimum Wage Increase

Following sustained public and legislative pressure, Amazon announced Tuesday more than 250,000 full-time, part-time and temporary employees and 100,000 seasonal workers in the United States will receive a salary increase. Approximately 17,000 workers in the United Kingdom are also expected to receive salary increases.

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However, benefits, including health care, will remain unchanged.

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

Those critics include U.S. Senator Bernie Sanders, who last month introduced the Stop Bezos Act, (Stop Bad Employers by Zeroing Out Subsidies) last month with Representative Ro Khanna of California. The proposed U.S. legislation would tax corporations the equivalent of the amount their low-wage workers receive in welfare programs, such as food stamps.

“Let me take this opportunity to thank the many hundreds of Amazon workers who contacted our office talking about the wages and working conditions that they were employed under,” Sanders said in a short press conference Tuesday.

That month, Amazon’s profit margin rose above $1 trillion USD. 

Amazon has been under sustained fire over labor practices including low wages, harsh working conditions, and tax practices which saw the company pay zero taxes on “third party” sellers.

The company's public policy team announced that they will also become "advocates" for a U.S. federal minimum wage increase.

Senior Vice President of Amazon Global Cooperation Affairs Jay Carney tweeted: “If others join us and Congress raises the federal minimum wage, we could have a profound impact on the lives of tens of millions of Americans”

Tim Roache, Secretary General of GMB Union, a general trade union in the U.K., says that more can be done. "Given their owner is the richest man in the world, you'd think he could see fit to dig a little deeper, but it's a start."

Christine Owens, executive director at the advocacy group National Employment Law Project, said Amazon's call for changes at the federal level was a "significant" move and a response to public pressure.

"At $7.25, the federal minimum wage is a poverty wage. Having major, profitable employers like Amazon join the fight could help finally unstick it," she said.

"While this is a step forward, it is a long way from where Amazon needs to be," said UNI Global Union, which represents retail employees.

Analysts said the raise would cost it $1 billion or less annually, but would be offset by a recent $20 increase in the cost of its Prime memberships.