In announcing higher base wages for 350,000 workers, Amazon last week followed a tradition of Washington companies showing leadership with enlightened workplace policies.
Amazon’s decision last week to raise wages for all warehouse workers to at least $15 per hour is an outstanding move by one of the world’s most influential companies.
This continues a proud tradition of Seattle’s largest public companies demonstrating extraordinary leadership and innovation.
They have long shown Wall Street and corporate America that enlightened and progressive workplace policies are not only feasible and morally correct, they are also good for business. This is proven by the success of companies such as Costco, Starbucks, Microsoft and now Amazon, as they work to benefit not only shareholders and customers but also employees.
As Amazon became profitable, it was justly criticized for miserly treatment of workers in its vast distribution system, far from the shimmering new headquarters and well-paid software developers in Seattle’s South Lake Union neighborhood.
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Founder Jeff Bezos chose to respond not just by fixing its problem, but by addressing an inequity challenge that affects entry-level workers and companies across the board.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Bezos said in a prepared statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”
This reflects the more public and civically engaged Bezos who has emerged since Amazon brought multiple flywheels up to speed, generating billions of profit.
Of course, there’s also self interest. With Bezos now the world’s richest person, Amazon is a political piñata, and it’s trying to change the narrative.
A few warehouse workers have complained that Amazon’s new compensation plan does away with bonuses and a limited stock-award program. But overall it lifts the wage floor for 250,000 permanent and 100,000 seasonal workers, including more than 5,000 in Washington state. The company said none will see a decline in pay, all hourly employees will see an increase and the net effect is “significantly more total compensation” for employees.
The sustainability and predictability of higher wages make this indisputably positive, as does Amazon’s pledge to lobby for a higher federal minimum wage. The federal minimum of $7.25 — last raised in 2009 — is unconscionable, sanctioning near poverty wages low enough to qualify for food stamps.
Amazon obviously calculated that higher wages will benefit the enterprise, but the success of the enterprise is essential to create and sustain jobs for workers.
Major retailers across the country are increasing wages this year as competition grows for workers and in response to federal tax cuts. Walmart announced earlier that it’s increasing base wages to $11. Target raised its starting wage this year to $12 and will reach $15 by 2020.
Costco in June increased starting wages by $1, to up to $14.50 per hour. That’s on top of health-care benefits for full and part-time employees 90 percent covered by the company. The Issaquah-based retailer, which was named America’s best employer last year by Forbes, is legendary for rebuffing Wall Street pressure to lower compensation costs to the level of competitors.
“We always want to maintain a significant [wage] premium overall,” Chief Financial Officer Richard Galanti said in May.
Starbucks began funding college educations for its employees in 2014, and the Seattle coffee giant now covers full tuition for Arizona State University’s online bachelor’s program to any employee working at least 20 hours per week.
Microsoft’s compensation packages and perks raised the bar during the software industry’s rise in the 1990s. More recently, the Redmond company is using its sway with vendors to propagate its workplace standards across the nation. In 2015 it began requiring large suppliers to provide paid time-off benefits if they wanted Microsoft’s business. Last month it expanded the program to require all U.S.-based suppliers to provide at least 12 weeks of paid leave to employees having or adopting children.
Add enlightened workplace policies to the list of things Washington state is exporting, sharing its abundance with the nation and world.