Amazon seeks to fend off critics with $15 minimum wage
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Amazon seeks to fend off critics with $15 minimum wage

One of the strange things about the Big Tech backlash we saw earlier this year was how ineffectively Facebook dealt with its critics. If Jeff Bezos was watching, he learnt something, because ecommerce giant Amazon isn’t waiting for protests to build up critical mass – it’s acting now to silence naysayers. How is it doing this? By giving them what they want: a bigger share of the company’s (substantial) profits.

Amazon’s share price has risen by 69% so far this year

graph 0410 amazon

SOURCE: Yahoo Finance

Amazon has come under fire before for paying workers too little, and driving them too hard. But a few factors looked ready to drive that criticism further. It began, about five weeks ago, with Senator Bernie Sanders, who took to social media to make the company accountable. In a statement, he wrote: “At a time of massive wealth and income inequality, the gap between the very rich and everyone else continues to grow wider. That is why I am introducing legislation in September to demand that Mr. Bezos and other billionaires get off welfare and start paying their workers a living wage.”

Around the same time, Amazon’s market cap crossed the trillion-dollar mark, making it the world’s second company (after Apple) to achieve such a valuation. And Jeff Bezos, Amazon’s founder and head honcho, was catapulted into the position of world’s richest man (he’s worth around $163 billion, for the record). What does all that taken together imply? An impending public relations crisis. How did Amazon respond? By defusing it.

On Tuesday, Amazon announced that it was not only going to start paying all U.S. employees a living wage ($15 per hour, effective November 1 this year), but that it would champion fair pay by lobbying for an increase in the federal minimum wage. In the statement, Mr. Bezos wrote: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead. We’re excited about this change and encourage our competitors and other large employers to join us.”

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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