U.S. retail giants woke up Thursday to yet another challenge from Amazon.com Inc. Chief Executive Officer Jeff Bezos, this time with a call to match his company’s recent increase to a minimum wage of $15 per hour.
“Do it! Better yet, go to $16 and throw the gauntlet back at us,” Bezos wrote in his annual shareholder letter. “It’s a kind of competition that will benefit everyone.”
The taunt is coming from a company that has been under a lot of pressure to improve working conditions worldwide. When Amazon pledged in October to raise pay to at least $15 an hour in the U.S., the e-commerce giant also eliminated monthly bonuses and stock awards. Amid a tight labor market, Walmart Inc. and Target Corp. also have increased wages and benefits.
“We are finally seeing the beauty of tight labor markets,” said Dave Cooper, a senior analyst at the Economic Policy Institute, a think tank. “And if they can force their competitors to pay more, that’s extra dollars that workers will spend.”
One caveat is that Amazon’s workforce primarily toils in distribution centers, which typically pay more than stores do because of the more demanding, physical nature of those roles, according to Bloomberg Intelligence analyst Charles Allen. Wholesale workers, a proxy for distribution centers, are paid about $31 an hour,…