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By: Brad Adler and Matthew Jones
Five months ago, in November, 2018, Amazon raised its minimum wage to $15/hour. Now, Amazon’s leader is challenging his competitors in the retail sector to do the same. In a letter to shareholders that was submitted to the SEC on April 11, 2019, Jeff Bezos stated “Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage… Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”
Bezos’ aggressive challenge comes in the midst of an undercurrent of momentum for an increase in both federal and state minimum wage laws. That momentum seems to be leading to some changes at the state level. For instance, on January 1, 2019, California’s minimum wage was increased to $12/hour for companies with 26 or more employees. Likewise, Maine increased its minimum wage from $10,00 to $11.00 in 2019 and Massachusetts raised its minimum wage rate from $11.00 to $12.00.
So what effect, if any, will Bezos’ challenge and the state movements have on the federal minimum wage? Currently, the federal minimum wage is $7.25/hour, which is significantly lower than the minimum wage rate in many states (including Arizona, Arkansas, Colorado, Connecticut, Florida, Illinois, Maryland, New York and New Jersey). Just recently, the House Education and Labor Committee passed the “Raise the Wage Act,” which proposes to increase the federal minimum wage to $15/hour over the next six years. Most commentators believe that the likelihood that this bill will become law is very low, but it nevertheless is a reminder to all of the stakeholders, including employers, that the issue of minimum wage isn’t going away anytime soon.
Of course, not everyone takes kindly to the billionaire’s $15/hour challenge. In response to the challenge, Walmart’s executive vice president of corporate affairs Dan Bartless tweeted out: “Hey retail competitors out there (you know who you are) how about paying your taxes?”
If you have any questions or would like more information, please contact Brad Adler at [email protected] or Matthew Jones at [email protected].