Today online retail giant Amazon announced it is raising the minimum wage it pays workers to $15 an hour in the U.S. However, that is not the only change.
No Free Lunch
Along with the announcement to raise the minimum wage to $15 an hour, Amazon also announced it will be cutting its bonus and stock award incentives.
So even though many new workers and soon to be hired workers will be making a better wage, there are also a large chunk that will actually end up netting less with this wage and no bonus/stock incentives.
Hence me saying - No Free Lunch.
New Wage Launch
The higher wage is set to kick in on November 1st and will impact 350,000 workers.
The soon to be retired incentive structure provided employees with such benefits as a share of stock at the end of each year (AMZN trades around $2,000 and is up roughly 600% over the past three years making that benefit worth much more than when initially dispersed)
“We can confirm that all hourly Operations and Customer Service employees will see an increase in their total compensation as a result of this announcement,” Amazon told CNBC in an email. “In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”
People do like stability, but in then end Amazon needed a way to mitigate such a large increase to its operating expense structure.
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Disclaimer: All info in this post is my opinion and for informational purposes only