One of the most important takeaways from Amazon’s 2018 fourth-quarter and full-year earnings report, released Jan. 31, had little to do with the usual financial results.
Amazon disclosed in the report that it received a record 850,000 work applications for hourly jobs in the US in October 2018 after announcing it would raise its minimum wage to $15 an hour starting Nov. 1. The company said that was more than double its previous record for job applications received in a single month.
Amazon said the new $15 minimum affects more than 250,000 employees in the US and 17,000 employees in the UK (where the increase was £10.50 in the London area and £9.50 everywhere else), plus more than 200,000 workers who were hired for the holiday season. As of Dec. 31, Amazon had 647,500 full- and part-time employees, up 14% from the same period a year earlier.
Here’s the excerpt from Amazon’s quarterly report:
Amazon’s $15 hourly minimum wage went into effect in the U.S. and the U.K. (£10.50 in the London area and £9.50 in the rest of the U.K.) on November 1st for all full-time, part-time, temporary (including those hired by agencies), and seasonal employees. The new Amazon minimum wage benefits more than 250,000 employees in the U.S. and 17,000 employees in the U.K., as well as over 200,000 seasonal employees who were hired this holiday. Following the announcement to increase the minimum wage to $15, Amazon received a company record of approximately 850,000 work applications for hourly positions in the U.S. in October 2018, more than double the previous record for the most applications received in a month.
Analysts had worried Amazon’s wage increase would cut into its profits. So far that doesn’t seem to be the case. Amazon reported $3 billion in profit for the fourth quarter, beating the consensus estimate of $2.8 billion among analysts tracked by FactSet.
Amazon unveiled its wage increase just in time for the holiday rush, putting pressure on other companies looking to hire in an already tight labor market. “We need to stay disciplined on this because the cost to find folks to screen them, the time that it takes in this low unemployment environment is more challenging than has been other periods,” Derrek Gafford, chief financial officer of industrial staffing firm TrueBlue, said on an earnings call in early November, in response to a question about the impact of Amazon’s $15-an-hour minimum.