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Amazon raises minimum wage to $15, urges rivals to follow

Workers sort arriving products at an Amazon Fulfilment Center in Tracy, California August 3, 2015. REUTERS/Robert Galbraith

By Arjun Panchadar

(Reuters) – Amazon.com Inc said on Tuesday it would raise its minimum wage to $15 per hour for U.S. employees from next month, seeking to head off criticism of working conditions at the world’s second most valuable company.

The online retailer said it would now lobby in Washington for an increase in the federal minimum wage and urged its competitors to follow its lead as the union-led “Fight for Fifteen” movement pushes for higher remuneration.

The new minimum wage will benefit more than 250,000 Amazon employees in the United States, as well as over 100,000 seasonal employees who will be hired at sites across the country this holiday, the company said.

“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” founder and Chief Executive Jeff Bezos said in a statement.

“We’re excited about this change and encourage our competitors and other large employers to join us.”

Amazon, which became the second company after Apple to cross $1 trillion in market value last month, paid its U.S. employees on average $34,123 last year. Bezos is listed by Forbes as the world’s richest man with a net worth of nearly $150 billion.

Amazon’s current minimum hourly wage starts at around $11 and analysts said the raise would cost it $1 billion or less annually and be offset by a recent $20 increase in the cost of Prime memberships.

Retailer Target Corp raised its minimum hourly wage last year to $11 and promised to raise it to $15 an hour by the end of 2020, while the world’s largest retailer Walmart raised its minimum wage to $11 an hour earlier this year.

Higher wages could further pressure margins at retailers that are already getting squeezed by higher transportation and raw materials costs, but the $15 still compares unfavorably with average U.S. blue collar wages.

Bureau of Labor Statistics show ordinary workers in the U.S. private non-farm sector on average earn $22.73 an hour. The mean hourly wage for non-management workers in transportation and warehousing is $21.94.

Amazon shares, trading lower before the company announced the wage hike, were down less than 0.3 percent at $1,997.75 in trading before the bell.

WORKER STRESS

Workers have been protesting against fast food chains like McDonald’s Corp and demanding wage increases since 2012 but conditions at Amazon’s warehouses, distribution centers and for its couriers have been drawing media attention and criticism for some time.

Democratic Senator Bernie Sanders has been vocal about low wages paid at U.S. corporations and has proposed legislation, nicknamed the “Bezos Bill”, aimed at making large corporations pay workers more.

“The pay increase puts Amazon ahead of the curve when it comes to providing its employee a living wage,” D.A. Davidson analyst Thomas Forte said, adding that the move will help it to attract employees as it opens more brick-and-mortar retail stores.

The company, which bought Whole Foods Market in a $13.7 billion deal last year, opened a general store in New York City in September after launching a few small grocery shops known as Amazon Go in Seattle and Chicago.

Amazon said it would increase its minimum wage for all full-time, part-time, temporary and seasonal employees.

Amazon also raised its minimum wage in Britain to 10.50 pounds ($13.59) an hour for all employees in the London area and 9.50 pounds an hour for staff in all other parts of the country, effective from Nov. 1.

“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, senior vice president of Amazon global corporate affairs.

(Reporting by Arjun Panchadar and Akanksha Rana in Bengaluru; Editing by Shailesh Kuber and Saumyadeb Chakrabarty)

Walmart uses lower U.S. tax bill to raise minimum wage to $11 an hour

: A customer pushes a shopping cart at a Walmart store in Chicago, Illinois, U.S. November 23, 2016.

By Nandita Bose

NEW YORK (Reuters) – Walmart Stores Inc said on Thursday it would raise entry-level wages for hourly employees to $11 an hour as it benefits from the biggest overhaul of the U.S. tax code in 30 years.

The world’s largest retailer said the increase would take effect in February and that it would also expand maternity and parental leave benefits and offer a one-time cash bonus, based on length of service, of up to $1,000.

The pay increase and bonus will benefit more than 1 million U.S. hourly workers, it said.

Walmart’s announcement follows companies like AT&T Inc, Wells Fargo Co and Boeing Co, which have all promised more pay for workers after the Republican-controlled U.S. Congress passed a tax bill last month that cut the corporate tax rate to 21 percent from 35 percent.

FILE PHOTO: A Walmart employee helps a customer navigate a flyer at the store in Broomfield, Colorado November 28, 2014. REUTERS/Rick Wilking/File Photo

President Donald Trump and his fellow Republicans have argued that the big corporate tax cut will benefit workers and lead to more investment by U.S. companies.

“We are in the early stages of assessing the opportunities tax reform creates for us,” President and Chief Executive Officer Doug McMillon said in a statement. The tax law gives the retailer an opportunity to be more competitive globally and to accelerate investment plans for the United States, he said.

The increase in wages will cost approximately $300 million on top of wage hike plans that had been included in next fiscal year’s plans, the company said.

The company is offering a one-time bonus to all full and part-time employees based on their length of service, rising to $1000 for employees with 20 years of service. The one-time bonus will amount to $400 million in the current fiscal year.

The company raised its minimum wage to $9 an hour in 2015. In 2016, it said employees who finished an internal training program would be eligible for $10 an hour. The retailer has spent about $2.7 billion to increase wages over the past few years.

(Reporting by Nandita Bose; Editing by Lisa Von Ahn and Frances Kerry)

Labor activists target Midwest politicians opposing wage increases

FILE PHOTO: Protest signs are pictured in SeaTac, Washington just before a march from SeaTac to Seattle aimed at the fast food industry and raising the federal minimum wage and Seattle's minimum wage to $15 an hour December 5, 2013. REUTERS/David Ryder/File Photo

By Chris Kenning

CHICAGO (Reuters) – U.S. activists plan protests in up to 400 cities across the United States on Monday’s Labor Day holiday to demand a minimum wage of $15 an hour, and are targeting politicians in Midwestern battleground states who have blocked such salary increases.

The demonstrations, backed by the Service Employees International Union, will focus on hospital and home care workers, joining the fast-food and janitorial staffers who have protested since the “Fight for $15” movement started in 2012.

The movement has helped to spur politicians in a growing number of cities such as New York, Seattle, Minneapolis and Washington, D.C., to adopt measures that over time raise minimum wages to $15 an hour.

Organizers are also increasing pressure on legislatures and governors, particularly in the Midwest, that have blocked or rolled back increases.

The increased focus on politicians who oppose wage increases may capture some of the populist job-related voter discontent in traditionally Democratic Midwest states that helped U.S. President Donald Trump win the White House, said Dick Simpson, a political science professor at the University of Illinois at Chicago.

“The minimum wage issue is one (issue) they can immediately identify with because it affects their pocketbook with every paycheck,” he said.

Republican Governor Scott Walker of the presidential swing state of Wisconsin is among those targeted, as is Illinois Republican Governor Bruce Rauner, who last month vetoed raising the minimum wage to $15 by 2022, saying it would hurt employment and businesses.

“I’m doing 40 hours of campaigning and knocking on doors and making phone calls, whatever it takes to get Walker out of office,” Milwaukee hospital worker Margie Breelove said.

A voter-engagement drive, also slated to begin on Monday, seeks thousands of workers to pledge to volunteer 40 hours leading up to the 2018 elections.

The idea is to support candidates, most of them Democrats, for state legislatures or governor who favor wage hikes and union rights in such states as Iowa, Michigan, Ohio, Wisconsin and Illinois, along with other areas outside the Midwest.

“It’s not just about taking out people that have been rigging the rules against us, it’s backing candidates who are prepared to support our agenda,” SEIU President Mary Kay Henry said in a telephone interview.

Representatives for the governors of Wisconsin, Missouri and Illinois did not respond to requests for comment on Friday.

Opponents of raising the current federal minimum hourly wage of $7.25 argue that it hurts businesses. The federal minimum wage was last increased in 2009.

But supporters of an increase say the current level is not enough to live on and helps fuel the need for social safety-net programs. They point to studies showing little impact on jobs.

Under a law approved last year, California set a $15 target for all workers, which it plans to reach in 2023. New York state is also gradually increasing its minimum wage to $15 an hour for all workers. Cities, including Minneapolis, have also approved such legislation.

However, since 2016, eight states, including Alabama, Kentucky and Iowa, have passed laws pre-empting local wage laws, according to the Economic Policy Institute.

St. Louis’ minimum wage, which had increased to $10 an hour, recently reverted to $7.70 after the legislature prohibited cities from creating separate wage laws. Missouri Governor Eric Greitens had opposed the increase.

(Reporting by Chris Kenning; Editing by Jonathan Oatis)

Seattle employers cut hours after latest minimum wage rise, study finds

By Alex Dobuzinskis

(Reuters) – A Seattle law that requires many businesses to pay a minimum wage of at least $13 an hour has left low-wage workers with less money in their pockets because some employers cut working hours, a study released on Monday said.

Low-wage workers on average now clock 9 percent fewer hours and earn $125 less each month than before the Pacific Northwest city set one of the highest minimum wages in the nation, the University of Washington research paper said.

Even so, overall employment at city restaurants, where a large percentage of low-wage earners work, held steady.

Seattle, which has a booming economy and a strong technology sector, is midway through an initiative to increase its minimum wage for all employers to $15 an hour. The city is at the forefront of a nationwide push by Democratic elected officials and organized labor in targeting $15 for all workers.

“Most people will tell you there is a level of minimum wage that is too high,” Jacob Vigdor, a professor of public policy at the University of Washington and director of the team studying the increase, said in a phone interview. “There is a sense that as you raise it too high, then you get to a point where employers will really start cutting back.”

Many companies reached that point after Seattle, a city of nearly 700,000 residents, raised the minimum to $13 an hour for large employers beginning Jan. 1, 2016, according to the study.

Seattle’s labor market held steady when the minimum rose to $11 from $9.47 on April 1, 2015, the university found in a study released last year.

“Raising the minimum wage helps ensure more people who live and work in Seattle can share in our city’s success, and helps fight income inequality,” Seattle Mayor Ed Murray said in a statement in response to the study, which the city commissioned.

The federal minimum wage has stayed at $7.25 an hour since 2009, and the Republican-controlled U.S. Congress has opposed an increase.

Critics of minimum wage increases say they lead to layoffs and force some companies out of business.

The latest research from the University of Washington found no major reduction in hours or jobs at Seattle restaurants, in keeping with a finding in a study conducted by University of California, Berkeley, that was released last week.

Lawmakers in California, the nation’s most populous state, voted last year to increase the minimum wage to $15 an hour by 2022. Elected officials in several states, including New York and Oregon, and large cities such as Chicago have in the last two years approved their own minimum pay hikes.

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Leslie Adler)

Hundreds protest over minimum wage at McDonald’s stockholder meeting

Cooks, cashiers and other minimum wage earners join anti-Trump activists on a march for an increase in the minimum wage to $15/hour during a “March on McDonald’s” in Oak Brook, Illinois, U.S., May 24, 2017. REUTERS/Frank Polich

By Bob Chiarito

OAK BROOK, Ill. (Reuters) – Hundreds of fast-food workers demanded wage increases as they marched outside McDonald’s Corp <MCD.N> headquarters during the company’s annual shareholder meeting on Wednesday.

The demonstrators were part of a nationwide protest organized by “Fight for 15,” a labor group that has regularly targeted McDonald’s in calls for higher pay and union rights for workers.

More than two dozen protesters were arrested outside the United Continental Holdings Inc <UAL.N> shareholder meeting in downtown Chicago.

“I saw my mother, who worked 30 years for Hardee’s, struggle on food stamps to raise her family and now I’m doing the same thing,” said Terrance Wise, a 42-year-old from Kansas City, protesting outside the McDonald’s meeting in a Chicago suburb.

Wise, who has worked at McDonald’s for three years, said he earns $7.65 an hour working full time. He said he also relies on food stamps to support his three daughters.

“Instead of paying their CEO $15 million, they should give him $10 million and pay their workers what’s right,” he said. The main demand of “The Fight for 15” is a minimum wage of $15 an hour.

Chief Executive Officer Steve Easterbrook earned $15.3 million in total compensation last year, according to company data.

Shareholders inside the McDonald’s meeting did not ask about the protests during a question-and-answer session.

Easterbrook focused on the fast-food giant’s plans for delivering food with UberEats and the rollout of new products.

The company says it invests in its workers by helping them to earn college degrees and acquire on-the-job skills. In 2015, the company raised the average hourly pay to around $10 for workers in the restaurants it owns.

However, most McDonald’s workers in the United States are employed by franchisees who set their own wages.

Hopes for an increase in the $7.25-per-hour federal minimum wage were dashed last year when Republicans retained control of Congress in the U.S. elections last November. Opponents of an increase say higher costs would force restaurants to cut hiring, and some businesses would not survive.

Still, voters in Arizona, Colorado, Maine and Washington have approved minimum wage increases in their states, encouraging advocates to continue pressing their case at the local level. Workers on Wednesday also gathered outside of a McDonald’s store near downtown Los Angeles.

In Chicago, 30 protesters outside the United Continental meeting were arrested and cited for blocking a road, Chicago police said.

More than 100 protesters were arrested during nationwide demonstrations several weeks after Donald Trump won the White House in November. At various times on the campaign trail, Trump suggested U.S. workers were overpaid, but also that the minimum wage should be raised.

(Additional reporting by Anya George Tharakan in Bengaluru and Lucy Nicholson in Los Angeles; Writing by Timothy Mclaughlin in Chicago; Editing by Frances Kerry and Jeffrey Benkoe)

District of Columbia approves $15/hour minimum wage

A supporter holds a sign aloft while listening to U.S. Democratic presidential candidate Clinton during a rally to celebrate the state of New York passing into law a $15 minimum wage in New York

By Ian Simpson

WASHINGTON (Reuters) – The District of Columbia’s city council approved a $15-an-hour minimum wage on Tuesday, a rate adopted by a growing number of U.S. cities and states seeking to battle income inequality.

The council voted unanimously to pass the measure boosting the minimum hourly wage to $15 by 2020, with subsequent hikes tied to inflation. A final vote will come later this month, and Democratic Mayor Muriel Bowser has backed the bill.

Once approved, the U.S. capital will join California and New York in making $15 the hourly minimum. At least eight cities, including Seattle, have also approved the $15 base.

“Raising the minimum wage will help address the issues of residents being pushed out of the District due to rising costs of living and income inequality,” Council member Vincent Orange, a sponsor of the bill, said in the hearing.

He and other supporters say Washington’s robust economy and growing population mean it can support a higher minimum wage.

The District of Columbia’s base wage is $10.50, and will go up by $1 on July 1 under existing law. The federal minimum is $7.25 an hour.

The $15 minimum is estimated to raise wages for 114,000 workers, or about 14 percent of the District of Columbia’s workforce, according to an analysis for the council by the non-profit Economic Policy Institute.

The higher pay proposal was supported by unions but was opposed by the District’s Chamber of Commerce. It said the District should not raise wages until neighboring suburbs do.

The District of Columbia’s booming restaurant industry also opposed it. Restaurant owners and the local restaurant association said that higher costs would lead to layoffs.

Some lawmakers said the measure did not go far enough to address a widening income gap and 18 percent poverty rate. Council member David Grosso added an amendment requiring the government to study a minimum income system to help the poorest residents.

“Raising the minimum wage is a good thing, but is $15 enough? Or should the number be $35, or $50 an hour?” he asked.

Under the measure, the minimum for workers who get tips, like waiters and bartenders, would also be $15 an hour by 2020. Following talks with unions, restaurateurs and community activists, employers would have to make up the difference between a base for tipped workers that will be $5 an hour in 2020, up from the current $2.77, Orange said.

(Reporting by Ian Simpson; Editing by Peter Cooney and Bernard Orr)

Supreme Court turns down challenge to Seattle’s minimum wage raise

People celebrate with ice cream at Seattle City Hall after a Seattle City Council meeting in which the council voted on raising the minimum wage in Seattle

By Daniel Wiessner

(Reuters) – The U.S. Supreme Court on Monday declined to hear a challenge by business groups to a trendsetting Seattle law that will raise the city’s minimum wage to $15 an hour, leaving in place a lower court’s decision to uphold the ordinance.

The law, which took effect in April 2015, requires businesses in Seattle with more than 500 employees nationwide to raise their minimum wage to $15 by 2018. Smaller companies have until 2021 to do so.

Seattle was the first major U.S. city to commit to such a high basic wage amid pressure from unions and workers’ rights groups. The move has since been followed to varying degrees by cities such as San Francisco and Los Angeles as well as by state lawmakers in California and New York.

The International Franchise Association’s 2014 lawsuit took issue with the Seattle law’s treatment of local franchises as subsidiaries of brand parents such as McDonald’s <MCD.N> or Burger King <QSR.TO> rather than independent businesses, meaning they had to comply by the earlier deadline.

A federal judge in Seattle in March 2015 rejected claims that the ordinance was discriminatory, and the San Francisco-based 9th U.S. Circuit Court of Appeals last year agreed.

Seattle officials and the Service Employees International Union, which backed the city in the case, said franchises are not typical small businesses because franchising offers inherent advantages such as access to loans, brand recognition and bulk purchasing. But the franchise association countered that those perks come at a cost, namely royalties, fees and rent.

The association said the lawsuit was an attempt “to level the playing field” for the 600 franchise businesses that employ 19,000 people in Seattle, and it was disappointed with the court’s action.

“Seattle’s ordinance is blatantly discriminatory and affirmatively harms hard-working franchise small business owners every day since it has gone into effect,” the group’s president, Robert Cresanti, said in a statement.

The case is International Franchise Association v. City of Seattle, U.S. Supreme Court, No. 15-958.

(Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Will Dunham)

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