Amazon last fall raised its minimum wage to $15/hour for its U.S. workers, after facing pressure from Sen. Bernie Sanders and others to boost compensation in its fulfillment centers and other facilities. Now, Jeff Bezos is turning the tables on Amazon’s retail competitors.
“Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage,” Bezos writes in his annual letter to Amazon shareholders, released Thursday morning. “Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”
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Although he doesn’t name them specifically, competitors including Walmart and Target are among those with lower minimum wages than Amazon now offers.
Unlike Amazon, none of those competitors can rely on the profits from a leading public cloud service like Amazon Web Services to boost the bottom line and indirectly cover the cost of the wage hikes.
Nor are their businesses completely analogous to Amazon’s business, given the cost of operating physical stores. That said, Amazon is increasingly a brick-and-mortar retailer, as well, and Whole Foods Market employees are among those to whom the new minimum wage applies.
Bezos writes, “This wage hike benefitted more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who worked at Amazon sites across the country last holiday. We strongly believe that this will benefit our business as we invest in our employees. But that is not what drove the decision. We had always offered competitive wages. But we decided it was time to lead – to offer wages that went beyond competitive. We did it because it seemed like the right thing to do.”
Walmart is already responding. The company’s executive vice president of corporate affairs, Dan Bartlett, tweeted this on Thursday, referring to Amazon not paying federal income taxes in 2018:
— Dan Bartlett (@danbartlett6) April 11, 2019
In its annual proxy statement, also released Thursday morning, Amazon reports annual compensation of $28,836 globally for its “median compensated employee” in 2018, up from $28,446 the prior year. In 2018, the median annual total compensation for all U.S. full-time Amazon employees was $35,096, including two months of the higher minimum wage, the proxy says. This is a new disclosure.
Bezos receives a salary of $81,840 and additional compensation of $1.6 million annually to cover the cost of “security arrangements for Mr. Bezos in addition to security arrangements provided at business facilities and for business travel,” according to the filing. Amazon’s median wage of $28,836 is a ratio of 1-to-58 to Bezos’ compensation of $1.68 million, down from a ratio of 1-to-59 in last year’s filing.
The Amazon founder owns or controls about 16 percent of the company’s outstanding shares, about a quarter of which are owned by his ex-wife MacKenzie Bezos under terms of their recently announced divorce decree, which gives Jeff Bezos voting control over her shares, as well.