FINANCE

Bezos to competitors: ‘Pay more than me, I dare you’

BY Dan Berthiaume

Amazon CEO Jeff Bezos is raising the stakes in public discourse surrounding the minimum wage.

In his annual letter to Amazon shareholders, which is on file with the Securities and Exchange Commission (SEC) and also posted on the Amazon corporate blog, Bezos boasts of Amazon’s pay and benefits and challenges other retailers to best him by doing more. (Although Bezos did not call out any companies by name, Walmart was quick to fire back with its own challenge.)

“Last year, we raised our minimum wage to $15-an-hour for all full-time, part-time, temporary, and seasonal employees across the U.S.,” Bezos says in the letter. “We did it because it seemed like the right thing to do. Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”

Bezos’ letter also cites Amazon benefits such as its Career Choice program, which pays up to 95% of tuition and fees towards a certificate or diploma in qualified fields of study, even if those employees wind up leaving Amazon.

Retail minimum wage has been a hot issue with the public, and with politicians, for some time, and major retailers are responding. Target is bumping its minimum hourly wage to $13 starting in June as part of its goal to hit $15 an hour by the end of 2020. This is Target’s third pay increase since fall 2017 when the company announced its $15 an hour goal and raised hourly pay from $10 to $11. In 2018, Target bumped its minimum wage up to $12. The retailer credited the lift with helping it to achieve its seasonal hiring goal of 120,000 workers.

Meanwhile, Walmart increased its minimum wage to $11 an hour in January 2018. More recently, in March, warehouse club giant Costco said it has raised starting wages for store workers from $14 to $15 an hour. It is Costco’s second wage increase in less than a year.

All of these employer-set minimum wage levels are well above the federal minimum wage, which has been set at $7.25 since 2009. However, prominent politicians including U.S. Sen. Bernie Sanders (I-VT.) have been pressuring national retailers to pay well above that rate.

In November 2018, Sanders cosponsored legislation called the “Stop WALMART Act” that would prohibit large companies from buying back stock until they pay all employees at least $15 an hour. This followed Sanders’ September 2018 introduction of the STOP BEZOS Act, which would have imposed a 100% tax on large employers equal to the amount that their workers receive in public assistance benefits. Amazon raised its minimum wage to $15 an hour shortly after Sanders filed that bill.

Bezos’ letter also said Amazon will experiment at the right scale, which will result in both multibillion successes and failures. He cited Amazon Echo and Alexa as experimental successes which partially originated from learnings Amazon achieved while developing the Fire phone, a significant financial failure for the company.

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