Amazon doubles wages of US workers

The American e-commerce giant has made the decision to increase its lowest-paid workers to US$15 an hour. This compares to the US federal minimum wage of US$7.25, although many US states have a minimum wage that is higher than this.

It’s expected that employees who don’t earn the minimum will also receive something of a pay rise.

There has been a concerted effort to increase the minimum amount paid to be closer to a ‘living’ wage, even if the minimum wage doesn’t change. Large retailers like Target and Walmart have also recently increased wages.

The change will help 250,000 people in US and tens of thousands in Europe.

In the short-term this will likely dent Amazon’s profits but in the long-term it may help. In a similar fashion to Ford, the lowest paid at Amazon are some of the most likely to spend that additional money on Amazon-bought products.

Cynical people would say that Amazon is one of the worst offenders for replacing workers with automation. Also, that it wouldn’t have done this wouldn’t pressure from people like Bernie Sanders.

Ultimately, I think it’s a good move for businesses to pay people a liveable wage. People’s wages become their spending, which becomes the revenue of businesses. The economy would dry up if people were spending all their money on basic necessities and nothing else.

This could prompt some businesses in Australia such as Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW) to consider raising their minimum pay level. Australia’s national minimum wage is better than the US’, but US$15 is nearly $21 AUD at today’s exchange rate – plus Australia’s cost of living is supposedly more.

Foolish takeaway

I applaud Amazon for the move – businesses that are doing very well should share the rewards with their employees in some way, even if it’s a small gesture. As I mentioned, it could boost Amazon over time if millions of low-paid retail workers earn more – they might spend some of it on!

Another online retailer that’s doing very well is this exciting ASX share that could deliver great growth for your portfolio.

Top Australian Stock Picker Just Issued Rare “Double Down” Buy Alert

Discover why this legendary Australian stock-picker just issued a “Double Down” buy alert to his exclusive group of insiders… and why he’s convinced this might be the single most attractive entry point for years to come.

Simply click here to get started and access our secure sign-up page.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!