Amazon has recently been criticized for wages the company has been paying to warehouse workers.  In response, the company announced last week that they were raising the compensation for all U.S. employees (approximately 250,000) to $15 an hour.

This action had two immediate results.  One, it triggered competition among other companies who will be hiring seasonal workers during the upcoming holiday shopping period in an already tight labor market.  And, secondly, it caused concern among Amazon employees whose wages were likely to be cut by this action.  In addition to the raises for regular employees, there will also be raises for seasonal workers and part-time/ temporary workers, as well as the recently-acquired Whole Foods employees who are planning to unionize.  To help offset these rather costly pay increases, the company is discontinuing certain incentive pay and stock compensation for hourly warehouse and customer-service employees.  Many employees that were receiving bonuses and discount stock purchase options will see these going away.  And, for those who have been employed for a few years and were already making close to $15 an hour, the “increase” works out to be a pay cut.  As well, some people who had been around for a while are now getting modest pay raises, but those employees just coming in the door are getting the same pay.  This doesn’t sit well with seasoned employees and indicates that there well might be some labor discomfort before things settle out at Amazon.

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