Amazon is taking a new tack in its crusade to raise the federal minimum wage, by noting the rising economic clout that the increased paychecks of its 1 million-plus employees is having on local small and medium-sized businesses (SMB) and in turn the broader economic recovery.
In a new blog post written by Amazon Global Corporate Affairs SVP Jay Carney Monday (June 7), the online retailing giant said its $15-an-hour starting wage was causing a ripple effect and fueling a rising tide of progress.
“Employees who saw their take-home pay increase told us that they had an easier time providing for their families and were able to spend on things like car repairs, home improvement projects, tuition, and extracurricular activities for their kids,” Carney wrote, while introducing a trip of video record employee testimonials.
“In the weeks ahead, we’ll be sharing additional video stories and taking you to more parts of the country,” Carney said. “You’ll see examples of how Amazon’s wage has benefited communities and invigorated local economies,” he added, noting the company’s long-term leadership role amongst a dozen national employers who have also embraced the cause of raising pay.
“Not only have more than 10 major employers — ranging from Target to Costco to Under Armour — raised their hourly rate in the past year alone, the small businesses that Amazon employees rely on in their communities have been able to grow and thrive.”
The Amazon wage hike outreach follows a related update from rival Walmart Friday, in which it announced it would again close all of its U.S. stores on Thanksgiving day this year for the second time as a “thank you” to associates for their continued hard work during the pandemic.
“Throughout the pandemic, Walmart has continued to place a heavy emphasis on the well-being of its associates,” Walmart said in the statement, which also noted the expanded access to no-cost counseling and extension of its COVID-19 emergency leave policy through Sept. 30.
Walmart U.S. COO Dacona Smith said Walmart stores would operate at regular hours on Wednesday, Nov. 24, but noted the company intended to announce its Black Friday operating hours plans at a later date.
“Throughout the pandemic, our associates have been nothing short of heroic in how they have stepped up to serve our customers and their communities,” Smith said, before invoking company founder Sam Walton’s tenet Walmart’s “people make the difference.”
“That’s never been more true than it is right now,” Smith added.
Demand For Drivers, Servers, Cashiers
To be sure the cost — and competition — to recruit, hire, train and retain hourly employees is on the rise, as major nationwide chains and platforms struggle to get the delivery drivers, warehouse packers and in-store clerks needed to process a surge in demand.
As a result, sign-on bonuses for new employees are on the rise, as are referral payouts for workers who help in the recruitment process.
Going forward, the ability to manage these rising costs and effectively offset them through strategic price increases will become an increasingly scrutinized and valuable skill.
It has already started to show up within the retail sector by way of an increased embrace of artificial intelligence (AI) tools and the science of price optimization such as that which is offered by firms such as Revionics, an Atlanta-based price optimization platform that was acquired by Aptos last summer.
“One of the myths about price optimization is that it’s just a profit play, that you just increase prices, but that is categorically not what we do,” said Matthew Pavich, managing director of global strategic consulting at Revionics, whose clients use its AI guidance and pricing expertise on an estimated $400 billion in retail sales each week.