The tech giant Amazon announced on Tuesday that it will be raising its minimum wage to $15 an hour, effective on November 1st.
About 350,000 full-time, part-time, and seasonal workers for the E-commerce giant will be given the increased wage–some of which were making $11 an hour.
This decision is no coincidence as the company was criticized recently by lawmakers (mostly liberal Democrats) for some of its workers still being dependent on public assistance.
"We listened to our critics, thought hard about what we wanted to do and decided we want to lead," said Jeff Bezos, Amazon’s CEO in a statement. "We're excited about this change and encourage our competitors and other large employers to join us."
"Sen. Bernie Sanders (I-Vt.) has emerged as a fierce critic of Amazon's treatment of its workers. Last month, Sanders and Rep. Ro Khanna (D-Calif.) introduced the Stop Bad Employers by Zeroing Out Subsidies Act, or Stop BEZOS Act, aimed at curbing the number of corporate employees on welfare. The measure would impose a tax on large companies to compensate the government when their employees rely on federal assistance programs like food stamps," writes "Politico."
Sanders was quick to congratulate Bezos on “doing the exactly right thing.”
Amazon is also jumping on the lobbying bandwagon to raise the federal minimum wage to $15.
So now with Amazon working with lawmakers, how will this impact the restaurant industry?
This evidently means some restaurants will be forced to spike their wages to compete for employees.
Since the unemployment rate has hit a historical low, this has already made it especially difficult for restaurants, especially fast food chains, to hire and retain staff.
Not all operators are in support of the minimum wage spikes and for good reason. The average 5-6 % profit margin is tough enough for restaurant owners. With the minimum wage increase to $15, this means restaurants will be even less profitable and some will have to cut labor cuts in other ways.
This increase could not only be detrimental to their business, but the employees would ultimately suffer from weekly hour cuts and even may lose their jobs entirely.
As labor wages increase, more operators are also investing in technology like self-ordering kiosks to cut down on labor costs.
Read more about Amazon's latest move at "Politico" now.