Amazon is raising wages just in time for the holiday rush

Holiday shoppers leave Macy’s.
Holiday shoppers leave Macy’s.
Image: Reuters/Keith Bedford
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Amazon, as you have probably heard, is raising wages. Its lowest paid workers in the US will get $15 an hour, while the lowest paid workers in the UK will earn £10.50 an hour in London and £9.50 an hour everywhere else.

The changes take effect Nov. 1, which, conveniently, coincides with the holiday rush. Amazon is extending the wage floor to seasonal and temporary workers hired by agencies, and said it plans to staff up with at least 100,000 additional hires in the US this holiday season. (It added 120,000 workers to its payroll for the 2017 holidays.)

Amazon framed its decision to raise wages as a thoughtful response to critics who said it paid too little, forcing workers to fall back on government assistance. But it’s also a savvy move that will help the online retailer through the busy holiday season, especially now that the US labor market has tightened, hourly wages are rising, and worries of a worker shortage have increased.

US retailers are on pace to hire the most seasonal workers for the holidays this year since 2014, according to a projection by staffing research firm Challenger. That includes 120,000 seasonal hires by Target, 80,000 by Macy’s, 39,000 by JCPenney, and 100,000 by UPS.

These retailers know they’ll have to compete for talent. Macy’s is making seasonal workers eligible for performance-based quarterly bonuses. Target is hiring workers starting at $12 an hour, and throwing in other benefits such as a 10% discount at Target stores and entry in a team-by-team prize-drawing to win a $500 holiday gift card and a $500 donation to a local charity. Kohl’s is offering a 15% discount immediately and a 35% discount “with no exclusions” during the holidays.

Amazon, dominant as it is in retail, still needs to compete for talent in a tight market. Lifting wages as a preemptive strike against the holiday crunch doesn’t cheapen Amazon’s decision, but makes it extra smart in how it came about.