Thousands of Amazon Workers in NJ to Benefit from New $15 Minimum Wage

Online retailer will apply increase from November 1. Decision draws out supporters of statewide wage increase, Gov. Phil Murphy included

Credit: Edwin J. Torres/Governor's Office
Gov. Phil Murphy, center, at the grand opening of an Amazon fulfillment center in Edison last week
With Amazon’s announcement that it will increase the minimum wage of its workers to $15 an hour, one of New Jersey’s largest employers has moved ahead of efforts in Trenton to significantly boost the statewide minimum wage.

Amazon said it would make the increase across the U.S. on November 1 and will directly impact the pay of 16,000 workers in the state. Nationwide, Amazon has an estimated 250,000 workers, plus another 100,000 seasonal hires, who will benefit. According to the company, the wage increase will translate into raises for all its hourly fulfillment-center and customer-service employees, including those already making more than $15 an hour. It could also encourage competitors to lift the wages they pay their own employees in the state’s surging warehouse and distribution sector.

Amazon’s wage announcement could be a sign that social activism is playing a large role in its business decisions. With Newark among the finalists in the company’s search for a location for its new corporate headquarters, that in turn could boost Newark’s prospects. The announcement also energized those calling for the establishment of a statewide $15 minimum wage in New Jersey, including Gov. Phil Murphy.

“Let’s act now to #RaisetheWage to $15/hour, helping over one million New Jerseyans,” Murphy said in a social-media post.

According to Amazon’s latest figures, the company has 12 warehouse facilities across the state for sorting and shipping products, with the latest openings recently in Edison and West Deptford. Its total of 16,000 workers in New Jersey places Amazon in the state’s top five largest employers.

Bezos said Amazon listened to critics

But as the company has grown in New Jersey and elsewhere, Amazon has faced criticism for not paying all its workers livable wages, even as corporate profits are surging and its founder and chief executive officer Jeff Bezos has become the richest person in the world. Among the company’s chief critics has been U.S. Sen. Bernie Sanders (I-VT), a former presidential candidate and leading proponent of a $15 minimum wage.

Bezos, in a statement issued yesterday along with the wage announcement, said Amazon listened to its critics and then decided “we want to lead.”

“We’re excited about this change and encourage our competitors and other large employers to join us,” Bezos said.

The current federal minimum wage is $7.25 but in New Jersey the hourly floor is set at $8.60. That rate is likely to be increased only slightly at the beginning of 2019 under inflationary-adjustment language that is written into the state constitution.

The latest research released by New Jersey Policy Perspective, a progressive think tank based in Trenton, indicates some 1 million New Jersey residents would benefit from a $15 minimum wage, and nearly $4 billion would be pumped into the state economy by the workers whose hourly pay would be increased. The group held a news conference in Trenton yesterday to call on Murphy and lawmakers to live up to their repeated promises to enact a $15 minimum wage in the state.

Sticking points for statewide wage increase

Credit: Edwin J. Torres/Governor's Office
Workers at the new Amazon fulfillment center in Edison
Under the latest discussions in the State House, there seems to be wide agreement for a wage increase to be phased in over several years. But possible carveouts, including for small-business employees and workers under a certain age, remain key sticking points as a minimum-wage bill has yet to be introduced. There’s also some growing concern that waiting too long to start the phase-in schedule could erode the full value of the $15 minimum wage thanks to rising inflation.

“This should be something that happens very, very soon,” said Brandon McKoy, NJPP’s director of government and external affairs. “Honestly it should have happened already.”

The New Jersey Working Families organization, one of the leading proponents of a $15 minimum wage, said that in the wake of Amazon’s decision New Jersey is now in danger of “falling behind.”

“If Amazon can raise the wage, so can New Jersey,” said Analilia Mejia, the group’s executive director. “Legislators should move immediately to pass a $15 minimum wage that leaves no one behind.”

Amazon to join campaign for higher federal minimum

In their announcement yesterday, Amazon officials said they are not only taking their own steps to increase wages, but they will be encouraging other companies to do so as well. They also said they will be joining the effort to get Congress to lift the current federal minimum wage.

“We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country,” said Jay Carney, Amazon’s senior vice president of global corporate affairs.

Those comments suggest Amazon is factoring social impact into its overall decision-making process, something that could boost the outlook for Newark in the search for the company’s next headquarters, which it has dubbed “HQ2.”

Newark certainly is not considered a shoo-in compared to other high-profile HQ2 finalists. Research released by Princeton’s The Boyd Company, a corporate-relocation firm, found the city has the highest unemployment and poverty rates among those left in the HQ2 sweepstakes. “A thumbs up for Newark would clearly give Amazon a huge social-standing boost, not to mention have a transformative impact on New Jersey’s largest urban center.” Boyd said.