- Amazon announced it’d be raising its minimum wage for about 350,000 employees to $15 an hour starting Nov. 1.
- Within a day, Amazon also announced it will be phasing out other benefits for hourly workers, such as stock awards.
- The company has received some backlash over the latest change as Jeff Bezos is the richest man in the world.
The minimum wage raises Amazon warehouse workers will receive beginning Nov. 1 come with one major caveat: Those workers will be ineligible for monthly bonuses and stock awards. The news is striking a chord with employees as it comes a day after Forbes named Amazon CEO Jeff Bezos the richest American, a title he can add on top of being the richest man in the world.
A mere 24 hours after the e-commerce giant announced it was increasing the minimum wage to $15 an hour and encouraging rival retailers to follow suit, Amazon confirmed that it is phasing out variable compensation pay (VCP), or monthly bonus, and restricted stock unit (RSU) awards for hourly workers.
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Amazon’s Hourly Raise Is Only 0.000875% of Jeff Bezos’ Net Worth
GOBankingRates crunched the numbers to figure that the hourly wage hike, which will be applied to 350,000 employees, is a meager 0.000875 percent of Jeff Bezos’ massive $160 billion net worth. Here’s how that percentage was calculated:
- The wage increase is $4 per person per hour (from $11 to $15)
- 350,000 (number of Amazon employees affected) x $4-per-hour increase = $1,400,000 more paid to employees per hour
- $1,400,000 is 0.000875 percent of $160 billion, Bezos’ net worth
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Amazon Cuts Perks Worth Thousands per Employee
One of the sunsetting perks is VCP, through which Amazon employees are eligible to earn up to 8 percent of their monthly take-home pay, Yahoo Finance reported. The average worker can earn between $1,800 to $3,000 a year through VCP, depending on the season, hours worked and the fulfillment center’s volume.
Warehouse workers will also experience a dramatic change in their stock options. Touted as one of the key attractors for prospective Amazon employees, full-time hourly workers usually receive two to three shares a year after a two-year vesting period, according to Yahoo Finance. And since Amazon’s stock price has more than tripled since 2016, those cuts could potentially be a huge loss over time for employees.
Amazon’s Reasoning for the Cuts — and the Backlash Over It
As a response to the wage hike and benefits change, Amazon workers have been vocal about how their paychecks will reflect less money with the absence of bonuses. Along with that, since the beginning of the week, Amazon’s stock (AMZN) has taken a hit over the backlash. Cynics and critics also took to Twitter to voice their lack of surprise for Amazon’s power move, with some people complaining that Amazon is simply moving money around, not increasing the amount workers earn.
To explain the decision, Amazon rationalized the change in a company blog post, citing that its hourly workers “prefer the predictability and immediacy of cash,” maintaining that the wage hike overcompensates for the change in bonus structure.
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