Three Questions: Prof. James Baron on Amazon’s New Minimum Wage

Actually $15 minimum wage sufficient for Amazon staff members to be financially secure?

No. For full-time worker, $15 an hour or so works out to $31,200 yearly, which certainly will not offer financial security, particularly in the metropolitan labor areas for which Amazon tends to run.

Is there a most likely effectation of this change on Amazon and its workforce?

Amazon will probably have an easier time recruiting and keeping entry-level folks, but it is unclear what will happen to those who are a little above the brand-new minimum wage, who have seen their relative standing eroded significantly because of the bottom being raised. In analysis my colleague Amy Wrzesniewski and I have inked on a company that did some thing similar, they saw increased turnover among employees have been exempt from the pay modification, who had been apparently disgruntled about their particular reduced relative standing inside the firm.

Are other companies likely to follow Amazon’s lead?

Not all the companies being put through the bad press about work conditions that Amazon has actually, therefore is almost certainly not therefore willing to join this bandwagon. However, Amazon is apparently causeing the change in part since they are finding challenging to hire and retain men and women inside a tight labor marketplace, and their rivals (some who have raised minimal pay) are required because of the work marketplace to comply. And achieving today determined voluntarily to attend $15 an hour or so, Amazon now possesses strong fascination with having its lobbying capacity to try to obtain the minimum-wage raised to be able to impose this burden on the competitors.