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'You know who you are!': Jeff Bezos challenges rivals to match Amazon's pay and benefits

Key Points
  • Jeff Bezos issues a challenge to competitors to match Amazon's pay and benefits.
  • "Do it! Better yet, go to $16 and throw the gauntlet back at us," Bezos says in his annual letter to shareholders.
  • Walmart and Target have both been making investments in pay, but they're still behind Amazon.

Jeff Bezos on Thursday issued a challenge to other retailers, not naming which ones specifically, to match Amazon's pay and benefits.

"Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us. It's a kind of competition that will benefit everyone," Bezos wrote in his annual letter to shareholders, filed with the Securities and Exchange Commission.

Amazon's biggest retail competitors in the U.S. today, Walmart and Target, have been making investments in pay, but they're still behind Amazon.

Target just last week said it would be increasing its its minimum hourly wage by a dollar, to $13, in June, part of its already announced goal to hit $15 an hour by the end of 2020.

Target's minimum is higher than Walmart's $11 an hour, set in January 2018, but is still below Amazon's, which was hiked to $15 in November. Walmart has said its average worker earns $17.55 an hour with wages and benefits.

Target declined to comment further beyond its recent announcement.

Walmart's EVP of Corporate Affairs Dan Bartlett responded to Amazon's challenge by sharing an article on Twitter Thursday morning about Amazon paying $0 in federal taxes on more than $11 billion in profits last year. He wrote: "Hey retail competitors out there (you know who you are) how about paying your taxes?"

With U.S. unemployment at its lowest level in nearly 50 years, retailers have been finding it more difficult to attract skilled workers, and so raising pay is one way they hope to be more competitive in the marketplace for talent. Some of these companies have also received criticism in the past for poor pay and unhealthy working conditions. Amazon has faced protests from some of its Prime Air pilots and outside activist groups in the past, for example. And on Thursday, pilots for Atlas Air, Southern Air, and ABX Air — carriers that power Amazon Air — are expected to protest.

In addition to hiking pay, companies including Target and Walmart are also adding other perks like extra parental leave, special training programs and educational opportunities. Walmart even eased its dress code to allow staff in stores to wear blue jeans. Bezos on Thursday talked about Amazon's "Career Skills" program, as an incentive, that trains hourly workers on how to build out their resumes, use a computer and "communicate effectively."

Meantime, House Democrats are championing a bill to raise the federal minimum wage to $15 an hour, from $7.25, but it's unlikely to pass. Six states have approved laws phasing in a $15 minimum wage. The District of Columbia has the highest minimum wage at $13.25, and it's set to rise to $14 an hour on July 1.

Read Bezos' 2018 annual letter here.

— CNBC's Amelia Lucas contributed to this story.

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Here's Jeff Bezos' annual shareholder letter

Key Points
  • Jeff Bezos published Amazon's annual shareholder letter on Thursday.
  • You can read the letter in full right here.