Amazon Leads To Labour Inflation

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There is news which has global resonance and influence because its importance. Such is the case with the increase in the minimum wages of Amazon employees by around 2$ to 15$/hour (a bit more than 13 euros). The measure will enter into effect on 1 November. According to Alphavalue´s analysts, “this not only blocks the competition (Walmart), but also confirms the shortage of manpower in the US and that, as a result, the margins of labour intensive companies can only increase, from food retail to the providers of security services”. On top of that, Amazon not only competes in sales to reduce prices and costs by imposing higher salaries on all, but also is the only group capable of increasing productivity, and therefore will need fewer temporary for the end of this year than last year (80,000 temporary employees in 2018 compared to 100,000 in 2017). “Another blow to the competition”, add the analysts.

Amazon is also increasing minimum wages following the general tendency in the US. To a large extent this Will fuel inflation. The inflection point in this theme was the shock on US wages at the beginning of February, changing the expectations over interest rates and this increases volatility in the debt market. Of the 480 companies covered by Alphavalue, the average personnel cost is 57,000 euros (this includes social security, pension costs etc). Below is a table of companies with large labour forces, modest wages (indication of part time work) and significant exposure in the US and the UK, given that Amazon’s initiative is being implemented on both sides of the Atlantic. The analysts conclude that “a certain level of caution is justified among investors confronted by wage measures like those of Amazon.

Amazon wages

In the US, the  minimum wage at federal level is 7.25 dollars per hour, although local legislation in some states sets a higher level, for example in California where it is 10.50$ per hour, or in Florida 8.25$ per hour. The measure will benefit the more tan 25,000 employees of the company. In addition, around 100,000 additional temporary workers, who will be contracted during the holidays, will also benefit from this increase in wages.

In the area of London, the minimum wage per hour will increase to 10.5 pounds per hour (around 11.8 euros). In the rest of the UK, the company´s employees will receive 9.5 pounds per hour (10.7 euros). This change will Benefit the 37,000 current and seasonal workers, according to data from the US company.


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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.