by Samantha McDonald, fn.com
Competing retailers are seeing their stocks take a hit a day after Amazon announced it would raise its minimum wage to $15 for about 350,000 workers across the country.
The e-commerce behemoth’s pay hike, which takes effect Nov. 1, is more than double the federal minimum wage at $7.25 — a figure the company hopes to increase by lobbying congressional members in Washington, D.C.
Shortly after the news, shares for big-name retailers including Costco Wholesale Corp., Kohl’s Corp. and Macy’s Inc. tumbled in Tuesday trading. As of 11:30 a.m. EST, the former’s stock was at $235.97 per share after closing at $236.35 yesterday. On the other hand, the latter two were at $72.35 and $33.02 per share after previous close at $73.07 and $33.03, respectively.
Additionally, the e-tailer’s move puts pressure on rivals like Walmart and Target — both of which have announced their own pay bumps. Early this year, Walmart said it would push workers’ hourly wages to $11. Meanwhile, Target followed up its first hike to $11 last September with another raise to $12 and plans to increase the number to $15 by 2020.
The hike also comes just ahead of the holiday shopping season. In addition to full-time, part-time and temporary employees, more than 100,000 seasonal workers will receive the raise.
“We listened to our critics, thought hard about what we wanted to do and decided we want to lead,” founder and CEO Jeff Bezos said prepared remarks. “We’re excited about this change and encourage our competitors and other large employers to join us.”