In a bid by campaigners pushing pay increases to help bring down the rising levels of inequality and poverty, Amazon has come to the forefront by raising its minimum wage for British and American workers.
The company, which has become almost a byword for low-paid and low-quality work in recent years, said it would increase its US minimum wage to $15 (£11.57) an hour for more than 350,000 workers. In the UK 40,000 permanent and temporary staff will get an increase to £10.50 an hour in London and £9.50 across the rest of the country.
Jeff Bezos, the multi-billionaire founder of the e-commerce company who is also the richest man in modern history, said: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.
“We’re excited about this change and encourage our competitors and other large employers to join us.”
Economists have said the move was becoming a necessity as a result of labour shortages in both countries. The new UK minimum pay rates, which will take effect on 1 November, are at least 21% higher than the current national minimum wage of £7.83. The new rate is also higher than the level recommended by the Living Wage Foundation of £8.75, or £10.20 in London.
The current minimum for Amazon’s British workers is £8 an hour, meaning a pay rise of at least 28% in London and 18% elsewhere, well above the rate of UK inflation. The lowest paid US workers currently get $11 an hour, meaning an increase of 36%.
Bernie Sanders, one of the company’s most vocal critics, said other companies should now follow Amazon’s lead.
The new US and UK minimum wage will apply to all workers across the board, including full and part-time, seasonal employees and temporary workers hired by recruitment agencies.
Union leaders welcomed the move but said Amazon still needed to improve its employment practices.
Jeremy Corbyn, the Labour leader, said trade union pressure had prompted the pay rise, adding: “The fight goes on to improve working conditions and get this company to pay its fair share of taxes.”
Frances O’Grady, the TUC general secretary, said raising the minimum wage was only a start and shouldn’t be seen as an act of generosity.
“If Amazon is really serious about looking after its workforce it must recognise trade unions. And it must end the exploitative working practices that have seen hundreds of ambulances called to its UK warehouses,” she said.
In the UK a slowdown in the number of EU workers arriving since the Brexit vote, together with record job vacancies, has made it harder for UK companies to find staff, possibly pressurising companies to increase pay to retain and attract staff.