Is Amazon’s $15 Wage More Than Good PR?

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On October 2, Amazon pledged to pay all U.S. workers $15 per hour beginning next month. All 250,000 Amazon employees and 100,000 seasonal staff will receive the higher wage, as will workers at Whole Foods.

“We listened to our critics, thought hard about what we wanted to do and decided we want to lead,” Amazon CEO Jeff Bezos said in a statement. He also threw Amazon’s support behind raising the minimum wage. On the face of it, the $15 wage hike seems to be a PR victory for Amazon.

The brand almost certainly will measure social and traditional media for positive and negative comments about the $15 boost. Using analytics it will determine whether or not this was a PR win, of course. If it’s ruled a victory, Amazon also is likely to see whether or not the good PR correlated to better sales. Should be interesting.

From an unscientific viewpoint, it’s a PR win when you consider the reaction of one of Amazon’s loudest critics, Sen. Bernie Sanders. “I want to give credit where credit is due,” Sanders said. “I want to congratulate [Amazon chief] Mr. Bezos for doing exactly the right thing." Sanders has long urged lawmakers to tax Amazon because its low wages resulted in workers needing to resort to food stamps and other federal programs to survive.

White House is Positive

Another vociferous critic of Amazon and Bezos, President Trump, said nothing. Yet his chief economic advisor, Larry Kudlow, was pleased. “Good for them...I'm in favor of higher wages,” was his reaction. He tied the wage boost to a healthy economy.

When you consider how much angst tech giants are receiving in Washington, D.C., we’ll call the Sanders and Kudlow kudos a PR win.

The stock market wasn’t quite as sanguine, with Amazon shares off slightly at Tuesday’s close. That’s a draw.

Digging a bit, not everything is as it appears. Bezos said he’s glad to lead, but, while Amazon is the largest retailer to hike wages to $15, other companies have done this previously or pledged earlier to do so.

Boosting Optics

Amazon almost certainly considered PR optics before making its pledge. The company is set to decide on its second headquarters before the year is out, the competition is fierce, and tax incentives are flowing like the swollen Potomac after a week of rain. How would it look for Bezos, the world’s richest man, to accept tax breaks while his workers complain about low wages?

Factored into Amazon’s calculations—and you can bet nearly any big move Amazon makes factors PR into its calculations—is the possibility of hourly workers striking while the new headquarters are announced. Slowly, quietly, hourly workers are finding their voice. Unionized hotel staff began striking today in Boston, largely about wages. Hotel workers in Chicago went on strike earlier this year, as did restaurant and fast food workers. Overseas Amazon workers struck earlier this year.

Union Blocking

Meanwhile, management at Whole Foods has rebuffed attempts to unionize workers, though the struggle continues. In this case, raising the wage to $15 could be more than a PR win—workers on the fence might decide to forego unionization.

A higher wage might benefit Amazon in other ways. In a tight market for seasonal workers, the $15 wage could help recruitment and retention. Keeping workers in place saves on the high cost of replacing staff and training newcomers.

The wage hike also is likely to pressure Amazon’s smaller competitors, possibly leading to poorly staffed stores at holiday time. When consumers are fed up with retailers, where do they shop? Amazon. Workers making the higher $15/hour wage also might shop more, perhaps at Amazon.

Making Less on $15/hour?

Most early coverage of the wage increase failed to mention an associated fact. Certain financial incentives and bonuses, including stock and monthly bonuses, will be halted for Amazon workers as of November 1. Some workers reckon they’ll be making less as a result, Yahoo Finance reports.

A large question will be whether or not the $15 hike is an isolated move or Amazon management truly wants to improve the workers’ lot. In addition to Sanders’ complaints, reports have surfaced periodically of poor working conditions at Amazon. The most memorable image, of warehouse workers laboring in cramped conditions urinating in cups to avoid taking breaks and missing deadlines, is another reason Amazon needed a PR win.

Seth Arenstein is editor of PR News.  Follow him: @skarenstein

 

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