NEW YORK--Amazon.com Inc said on Tuesday it would raise its minimum wage to $15 per hour for U.S. employees from next month, giving in to critics of poor pay and working conditions at the world's second most valuable company.
The increase pushes Amazon's lowest wage above that at Walmart Inc and Target Corp. It is almost $3 shy of the average for a non-management worker in warehousing in the United States.
The online retailer also said it would now lobby in Washington D.C. 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.
Amazon's move comes when U.S. unemployment is at a near two-decade low as retailers and shippers compete for hundreds of thousands of workers for the all-important holiday shopping season. Several companies, including United Parcel Service and Macy's, have announced hiring to staff stores and handle holiday sales and delivery.
"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.
The pay increase, effective from next month, will benefit more than 250,000 Amazon employees in the United States as well as over 100,000 seasonal employees who will be hired across the country this holiday season, the company said. Christine Owens, executive director at advocacy group National Employment Law Project, said Amazon's call for changes at the federal level was a "significant" move.
"At $7.25, the federal minimum wage is a poverty wage. Having major, profitable employers like Amazon join the fight could help finally unstick it," she said.
Amazon, which became the second company after Apple to cross $1 trillion in market value last month, currently pays around $11 per hour. Analysts said the raise would cost it $1 billion or less annually but would be offset by a recent $20 increase in the cost of its Prime memberships.
