By CultureBanx Team
Amazon is raising its minimum wage to $15 an hour for all U.S. employees
22% of Amazon’s workforce is black
Amazon (AMZN -1.65%) is handing out its own form of economic and racial justice by implementing a $15 minimum wage for all U.S. employees starting November 1st. Black people make up around 13% of the U.S. workforce, and more than half of these employees are paid less than $15 an hour. Therefore this new wage floor by Amazon could play a critical role in closing the pay and wealth gaps for African Americans, while having a significant impact on future generations.
Why This Matters: This move by Amazon, a company with a $960 billion market cap is bigger than just its employees and perhaps is a model the nation should follow. In the 21 states where minimum wage remains at the federal poverty-level rate of $7.25, they happen to have some of the largest African American populations in the country.
A $15 minimum wage would directly raise the take home pay of more than half of all African American workers, according to the National Employment Law Project (NELP). This would bring black employees closer to economic security and help to reduce the racial wealth gap over time.
The e-commerce giant’s U.S. workforce is 22% black, but only 6% of its managers fall into this ethnic group. CNBC reported the starting pay at Amazon varies by location, $10 an hour at a warehouse in Austin, TX and $13.50 an hour in Robbinsville, NJ. A 2017 filing by the company showed the median Amazon employee earned just under $28,500.
Amazon said the effect of the higher pay will be reflected in its forward-looking quarterly guidance. Shares of the company are up 63% year to date as they are now the second most valuable company in the world.
Situational Awareness: Let’s see if this wage move is enough for Amazon to fend off competitors in a tight labor market going into the holiday hiring season. Retail rival Target (TGT -2.09%) announced in its holiday hiring release it would raise minimum hourly wage to $15 by 2020, and Costco (COST +0.72%) recently raised its starting wage to $14. The largest U.S. employer Walmart (WMT +0.79%) announced plans in January to raise its minimum wage to $11.
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