Amazon to cut bonuses, stock benefits as it raises wages

Amazon to cut bonuses, stock benefits as it raises wages

Amazon to cut bonuses, stock benefits as it raises wages

"We listened to our critics, thought hard about what we wanted to do, and decided we want to lead", Amazon CEO Jeff Bezos said in a press release.

"Amazon is much above minimum wages for delivery staff in all states, and so in India, they actually do not need to do any correction", Karanth said.

Amazon this week increased its minimum wage in the United States to $15 an hour from $11, more than double the federal minimum wage of $7.25 and ahead of wages paid by retail giants Walmart and Target.

According to The Sacramento Bee, Amazon employees filed a class-action lawsuit in November past year, claiming they had been denied breaks and wages, including for working overtime. For example, a current job posting for a full-time warehouse worker in Omaha, Neb., starts at $12.25 an hour, while a similar job in Madison, Wis., starts at $11.

The "Fight for 15" has been an ongoing battle in the U.S., with advocates for a fair, living wage working tirelessly for a almost 100% increase in the current non-server minimum wage (due to the expectation of tips, restaurants only have to pay wait staff a little more than $2 per hour). Workers said managers at the warehouse also didn't know how it would work. In Bengaluru, these workers are paid around Rs 17,000 a month, 25% higher than the minimum wage of Rs 13,400 in Karnataka. After the new changes, the restricted stock units (RSU) program will be phased out for stocks that become vested in 2020 and 2021, and will be replaced with a direct stock purchase plan by the end of 2019.

Low-wage workers typically receive higher pay from an expanding economy only after higher-income people have benefited, economists note.

Getty Peter Macdiarmid
Getty Peter Macdiarmid

Amazon's minimum wage hike might turn out to be a financial setback for some employees.

McDonald's Corp. shares slipped as Senator Bernie Sanders called on the fast-food chain to follow in Inc.'s footsteps and boost its minimum wage. It was theoretically a smaller cost for Amazon to bump its workers up to $15 than it would be for Walmart to bump all of its store employees up to $15. "That's one of the reasons why they're so scary to other industries". Galanti also emphasised that the retailer offers significant raises to employees every year, something many retail rivals do not do. "The more that they automate their production process, the less that a higher federal minimum wage would hurt Amazon".

Experts have projected retail rivals, like Target and Walmart, which now pay minimum wage rates of $11, to increase wages faster than planned.

Additionally, workers will allegedly no longer be eligible for cash bonuses based on productivity.

"I want to give credit where credit is due", Sanders said.

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