Amazon Struggles To Get Things Right

A week ago Amazon.com Inc in a press release said it would raise the minimum wage of its workers to $15 per hour. But after the announcement, Amazon also said it would cut monthly bonuses and stock grants for hourly employees. Amazon had wanted to phase out its restricted stock unit program it many of its warehouse workers suggested they “prefer the predictability and immediacy of cash.”

But as a result of this decision, many longtime workers who already make $15 per hour or slightly more became worried that their total pay may actually decrease. So dozens of employees emailed the CEO Jeff Bezos directly and request the old incentive schemes be restored. This is the problem with rising the minimum wage either at a company level or the State level. When the minimum wage is creased to a higher number, it’s not fair for everyone who was already making that new wage because other workers who produce less for the company will be paid the same as them.

Earlier this week Amazon responded to the new concerns saying it would adjust compensation in a way that all employees would see the benefit of the wage increase. Basically, employees who already earn $15/hour will see their wages increased by $1.25/hour. In a statement made on Wednesday, the company claims that they will “quickly to get this information to [its] teams as fast as possible knowing there would be certain cases that would need to be adjusted between the announcement and November 1st when this new $15 minimum wage takes effect.”

“Some employees have benefited from a bull market and the unusually strong appreciation of Amazon’s stock price in recent years. This is a good outcome for those employees, but such stock price appreciation is by no means guaranteed to continue. Stock markets and individual stocks can go up, but they can also go down,” Amazon said.

“For employees who want to invest in stock for the possibility of future growth, we will be rolling out a direct stock purchase plan in 2019. We are continuing to roll out the details of all these changes to employees this week.”