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Amazon’s increased minimum wage a positive move, for now

Cornell University
5-Oct-2018 9:50 AM EDT, by Cornell University

Newswise — Amazon announced on Tuesday a new policy raising the minimum wage to $15 for all of its United States workers, including part-time workers and those hired through temporary agencies. The company also said it would also lobby the federal government for a higher minimum wage.

Erica Groshen is a visiting senior scholar at Cornell University’s School of Industrial and Labor Relations and a former commissioner of the U.S. Bureau of Labor Statistics, and says Amazon’s move might help spur other companies and the national government to raise minimum wages.


Groshen says:

“Amazon’s decision might matter because it expands on state initiatives to increase minimum wage in the face of a strong labor market, rising inequality and the declining real federal minimum wage. If many other large national companies do this, it could provide an effective substitute for federal action — or spur national action. 

“Very strong company profits show that there is plenty of room for wages to rise without endangering survival for many companies. In the last decade, large firms have mostly stopped paying higher wages to low-skill workers — while still paying high wages for high-skill workers. Amazon’s move may show that companies are rethinking this relatively recent development.  

“Amazon’s policy change loses significance if it contracts out more work to low wage employers or independent contractors. What policy does Amazon have for the pay and benefits of contractors? Will the company require this wage minimum for those workers, too?

“Additional questions remain: How many workers are affected and by how much? If the number of workers is small or wages being taken back in lower benefits, Amazon’s decision is no big deal. Is there a commitment to adjust the minimum wage with inflation going forward? If not, this may not help for long.”

Cornell University has television, ISDN and dedicated Skype/Google+ Hangout studios available for media interviews.


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