The Effects of Amazon’s $15 Starting Wage

Earlier this month, Amazon made news when the online retail leviathan announced it would raise its minimum wage to $15 an hour. The increase will affect full-time, part-time and seasonal employees. The pay bump will be effective November 1 and will impact more than 350,000 employees, including those that work at Whole Foods and other Amazon subsidiaries. For those already making $15 an hour, they will see a $1 increase to their hourly wage.

The new $15 hourly rate is more than double the federal minimum wage of $7.25, which has not increased since 2009. The announcement brought praise from both Senator Bernie Sanders and the Trump White House.

However, the pay increase does have its drawbacks. As part of the new compensation structure, hourly workers will no longer be offered stock awards. Amazon previously offered hourly employees one share of Amazon stock for every year of employment, plus an extra share at 5 years. Amazon stock currently sells at $1764 a share (Nasdaq: AMZN). But they’ve replacing that program with the minimum wage increase because they’ve found that employees prefer the “predictability and immediacy of cash.”

The Amazon Affect

So what does Amazon’s increased starting pay mean for local staffing companies like Flex Tech and their clients? With Amazon offices and fulfillment centers in the DFW, Austin/San Antonio and Houston areas, the risk of losing so many candidates to Amazon has never been greater.

Most of the entry level positions at Flex Tech have a starting salary between $11-13 per hour, while Level One Techs make between $13-14 an hour. The discrepancy in pay does make us pause to reconsider our wage rates. An increase in starting wages for entry level positions would impact the pay scale for mid-level and upper tier technicians as well, not to mention the construction costs for every project moving forward. But with the construction booms in the DFW, Austin and San Antonio areas, wage increases are a topic we’ll have to explore in the near future, especially considering the value that our techs bring to any job site.

As for our candidates…

Anyone simply wanting a job making as much money as they can, applying at Amazon is definitely the way to go, especially since they’re looking to hire 3,000 more employees in DFW alone.

However, for ambitious candidates looking to start a fulfilling career where they can actually see the results of their labor, securing a position through Flex Tech is the smarter choice in the long run. Some of the benefits include:

  • Better opportunity for advancement
  • Access to career resources
  • On the job training
  • Flexibility in job selection
  • Access to companies that are looking to fill long-term positions
  • Support from a dedicated team willing to invest in you to help you succeed.

Bottom line

The Amazon starting wage increased has caused us, plus our clients and candidates alike, to pause and consider what’s more important: higher pay, better opportunity or quality work. And finding the optimal balance between the three will be the challenge in the age of Amazon.

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