The idea of raising the minimum wage has been a much-debated topic in recent times, with many calling for a raise to $15 an hour across the United States. One company that could benefit from such a raise is Amazon. Despite the federal minimum wage being fixed at $7.25 an hour, Amazon has decided to take matters into its own hands and increase its base pay to $15 per hour (Amazon Newsroom, 2018). In order to understand how Amazon was able to make this decision and what it means for their employees, business model and competitors, we must first look at why they decided on this change in policy.
The primary reason behind Amazon’s move lies in both economic considerations and public perception of their brand image. On the economic side are factors such as employee motivation and satisfaction leading to better productivity levels (Lin et al., 2020). Studies have found that paying workers more results in improved employee morale which then leads to higher work performance (Myall et al., 2012). This would be beneficial for companies like Amazon whose success relies heavily on having efficient processes run by motivated teams working together collaboratively. Another factor is increased customer loyalty leading to stronger brand recognition, something which could help set them apart from other online retailers (Ziegler & Kiesecker, 2016).
How could Amazon decide to raise its minimum wage to $15 per hour, despite the federal minimum wage being fixed at $7.25 per hour?
On top of these practical elements there are also ethical implications. The current U.S Federal Minimum Wage Law states that anyone over 20 years old should earn no less than $7.25 per hour (U.S Department Of Labor nd.). This amount falls far short of allowing someone who works full time making only minimum wage enough money for rent or food without any additional government assistance programs (Gleason & Januszewski 2019) . Therefore increasing pay beyond the legal requirements can have both positive effects on customers’ confidence towards businesses whilst addressing important social issues like poverty wages or inequality between genders or races when it comes down job opportunities within certain industries (Bivens et al., 2017).
Finally, being one of the largest employers within retail sector providing jobs not only throughout America but worldwide makes Amazon’s decision very influential amongst other big companies who could follow suit if successful due result achieved by such changes(Kaneshiro et al., 2018). It is likely that larger corporations will begin taking similar action given their resources and potential impacts they could have on markets as well as society overall through improvement living standards even further once reaching out lower class individuals too.(Lemosetal 2015)
In conclusion while some may argue it was too expensive decision financially speaking ,it seems clear that increasing wages up to 15$ hourly rate suits multiple interests among them being improving working conditions along achieving competitive advantages over lower paid competitor firms .As mentioned before ,such acts might influence corporate powerhouses across different sectors inspiring them towards improving wages policies following suit .