Amazon is raising its minimum wage to $15 an hour for all US workers.
The change will take effect on November 1 and will apply to full-time, part-time and temporary employees. Amazon ( AMZN ) says the $15 minimum wage will benefit more than 250,000 Amazon workers, plus 100,000 seasonal workers.
“We listened to our critics, thought hard about what we wanted to do and decided we wanted to lead,” said Jeff Bezos, Amazon’s founder and CEO. “We are excited about this change and encourage our competitors and other large employers to join us.”
The change applies to Whole Foods and all other subsidiary employees.
Amazon also said its public policy team will begin lobbying for an increase in the federal minimum wage, which has been $7.25 an hour since 2009.
“We’ll leave it up to Congress and the professionals to decide what the appropriate amount is,” Dave Clark, the company’s senior vice president of worldwide operations, told CNN’s Christine Romans. “But for us, that number is $15.”
Amazon’s size and explosive growth make the decision important beyond the hundreds of thousands of people who will directly benefit.
Amazon is one of the largest employers in the United States, adding more American jobs than any other company in the past decade.
The decision also raises the stakes for potential workers at Amazon’s next headquarters. The company plans to create a second headquarters, known as HQ2, with 50,000 jobs. Amazon has named 20 cities as finalists, including Atlanta, Chicago and Washington, DC
Critics, including independent Sen. Bernie Sanders of Vermont, say Amazon doesn’t pay workers enough. They draw a contrast with Bezos’ impressive wealth: he is the richest person alive, estimated at 165,000 billion dollars.
“I want to give credit where credit is due,” Sanders said Tuesday. “I want to congratulate Mr. Bezos for doing the right thing.” He said he hopes to work with Bezos to push for a $15 federal minimum.
Bezos responded by thanking the senator. “We’re excited about this, and hope others get involved,” he tweeted.
Workers across the country have called for a $15 minimum wage, particularly as part of the movement known as Fight for $15.
Supporters say it’s a remedy for widening wage inequality and will encourage consumer spending, while opponents say it could reduce employment opportunities, especially for teenagers and others looking for entry-level or low-skilled jobs.
Some companies have responded to public pressure.
Target raised its minimum wage for new hires to $12 an hour in September and plans to raise the minimum wage to $15 by the end of 2020. Disney reached an agreement with its unions to pay at least $15 an hour at Disneyland in California in 2019 and at Disney World in Florida by 2021.
And Walmart, the country’s largest private sector employer with more than 1 million US workers, raised its minimum wage to $11 in February.
Clark said Amazon wanted to make the switch sooner.
“We decided, why wait? We really should do it now,” he told Romans.
Paul Sonn, director of the state policy program at the National Employment Law Project, said Amazon’s announcement would put pressure on other companies to raise wages, and on Congress to raise the national minimum. Twenty-nine states have their minimum wages higher than the federal $7.25.
Neil Saunders, managing director of Retail consultancy GlobalData, said a higher minimum wage could also help Amazon recruit workers.
“Without a wage increase, Amazon would place itself at a disadvantage in the labor market,” Saunders said. The company’s rapid growth “requires a lot of hiring, which is increasingly difficult in a tight labor market,” he said. “This is especially true during the holiday season.”
Saunders added that the decision was “politically savvy”.
Last month, Amazon said the average hourly wage for a full-time associate was already more than $15 an hour.
The median at Amazon last year was $28,446, according to a company filing. That’s $13.68 an hour. The company said the figure includes international and part-time workers.
The company announced that as of November 1, the minimum wage for UK workers is increasing. The new minimum wage is £10.50 ($13.60) for the London area and £9.50 ($12.30) for the rest of the country. More than 37,000 employees, including seasonal workers, will be affected by the changes.
The current UK minimum wage for adults over 25 is £7.83 ($10.15).