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It's a living

9 June 2021 By Gina Chon

Amazon.com’s giant status has one advantage: its ability to pressure other massive U.S. employers to raise their minimum wage. The $1.6 trillion firm’s pay of at least $15 an hour, double the minimum wage, has bolstered hiring in a competitive job market. While it marginally hurts some small businesses, it puts America’s largest job creators – the U.S. government and Walmart – on notice.

The effects of Jeff Bezos’s firm increasing its pay in 2018 for its warehouse workers is starting to show. While about 67% of local business leaders said it was very difficult to hire people, according to a U.S. Chamber of Commerce report released last week, the e-commerce behemoth nearly doubled its U.S. employee base through the Covid-19 pandemic. It recently said it was hiring 75,000 more workers, too.

The company is offering signing bonuses of $1,000 in some areas and an average pay of $17 an hour to get the new employees on board. Small wonder why it continues to boost wages with such a tight job market; the Labor Department on Tuesday reported a record 9.3 million job openings in April. Nearly all of Amazon’s new employees said good pay was the most important factor in their hiring, according to an internal survey.

Some small businesses may feel the pain. But a recent study by the University of California Berkeley and Brandeis University showed that Amazon’s higher pay reduced the probability of employment by only 0.8 percentage points. There were positive spillovers, like employers in the same Amazon commuting zone raising wages by 4.7%.

Walmart’s 1.6 million-strong labor force isn’t unionized either, and a U.S. Government Accountability Office study showed last year that it was one of the top employers with workers on social safety net programs. Meantime those on the payroll of the country’s largest employer, the U.S government, are at the mercy of policymakers. Congress has failed to raise the federal minimum since 2009. An April executive order mandated $15 an hour, but only for contractors.

Amazon isn’t perfect. Earlier this year workers in Alabama rejected a vote to unionize, and the Washington Post reported earlier this month that its employees were more likely to suffer serious injuries than other warehouse workers. Still, with some 3% of the civilian workforce employed by these three giants, it only takes one to move the needle.

 

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