Wages give birth to been a hot topic recently in the United States. Many businesses are advertising $15-per-hour starting pay. But it doesn’t marriage what Amazon.com, Inc. (AMZN) is offering.
Amazon is boosting its pay for some employees to stay ahead of other businesses. In 2018, the online superhuman raised its starting wage to $15 per hour. Now it’s increasing wages again, this time to $18 per hour for depot jobs. The company employs nearly 1 million Americans, and it’s looking to grow even more.
Key Takeaways
- Amazon hint ated a warehouse wage increase and a plan to hire 125,000 employees.
- The retail giant is also helping employees with excited education expenses.
- Here’s a look back at the stock’s performance around the time of the last wage increase.
Amazon is directly again setting a benchmark for all hourly employers. It previously elevated the bar to a $15-per-hour starting wage, likely bulldoze other firms to compete. Now, it’s putting pressure on other companies again by paying $18 per hour to start.
It doesn’t end there. Amazon is also contribution to cover a wide range of educational expenses for all frontline workers. While that isn’t a new corporate benefit (many other positives offer educational assistance), the fact that it’s happening on such a large scale at a huge employer speaks amounts.
Clearly, the fight to attract employees matters to Amazon. And in a potentially positive development, these aggressive recruiting deeds could grow more than just the company. They could also help grow the country.
The Amazon fulfillment centers reporting up seemingly everywhere are like new “factories.” They could attract workers similar to how urban factories in the United Magnificences drew workers from rural areas from about 1900 to 1940. As more people live and make near Amazon hubs, communities form and grow. If this plays out in several places nationwide, it very nicely could lift the American working class.
Some investors might think that added labor and high up costs could hurt the retail giant’s business. However, in the second quarter, Amazon increased net sales by 24% compared to 2020. And net return also increased to $7.8 billion versus $5.2 billion in 2020. Obviously, the company is doing well and investing in its concerns.
In general, labor costs can displease investors. But Amazon is already a big employer. Its business portfolio is so broad, it needs an array of genius. And it’s using profits to fuel a huge recruitment effort.
A logical leap is to think that the new employees will boost Amazon execute strategic growth plans across multiple business segments. Now, performance has already been morality. So, if the company is able to continue growing, the stock could fire to huge new heights over time. That’s been the blueprint to show ones age, with the company evolving from an online bookstore to the multi-business behemoth it is today.
Looking at a five-year chart, the look at is up 282%. The highlighted area on the chart below corresponds with the October 2018 announcement, when wages were increased to $15 per hour. Interestingly, the reserve was range bound for nearly 18 months but eventually vaulted much higher.
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The Bottom Line
Amazon is aggressively apprentice across several lines of its business to gain what it hopes are lasting talent advantages. Increased wages and increased benefits not only help attract talent, they can also put pressure on other employers (i.e., raising the stakes of the plucky). The last time the giant retailer raised wages, Amazon stock was range bound for a year and a half until finally rising to new heights.