In just two weeks, the pay bump that Amazon promised its 250,000 employees and 100,000 seasonal workers will go into effect in the U.S. and U.K. Earlier this month, Amazon announced that it will be raising its minimum wage to $15 per hour, regardless of employees’ full-time, part-time or seasonal status – just in time for the holiday season. But if this extreme bump in pay seems too good to be true, well, it kind of is.
But Amazon isn’t alone in this move.
Walgreens also announced this month that it’s slashing benefits after giving employees $100 million in raises. To make up for this, the drug store chain is eliminating health coverage for retired workers and cutting back on vacation time. All we have to say about that is… yikes.
But is it all that bad?
According to a recent survey by Nexxt of over 1,400 job seekers, 66 percent say they prefer a higher wage over benefits. And to Amazon’s credit, the company will be giving additional pay bumps to compensate for taking away the stock and bonus structure. So this begs the question: is this pay increase simply something that the retail and restaurant industries need? And are the majority of employees willing to forgo benefits for a more livable wage?
That’s the gamble that one Chick-fil-A store in California is making. The beloved chicken chain location also raised its minimum wage this year, with the longer term hopes of increasing employee retention. Due to the nature of the work and a lot of competition, turnover in the retail and restaurant industries is very high. By providing employees a better living wage of $17-$18 per hour, the restaurant location suspects that employees will stay longer, and in turn, this Chick-fil-A store can ensure that these tenured employees are well-trained and offer top notch service to customers. If it works, it would be a winning strategy for the store.
Employees need and deserve to be paid a livable wage for their work. But in any company, the budget needs to be balanced. A dramatic pay increase usually doesn’t come without a cut elsewhere. For many retail and restaurant chains, that’s bonuses or health insurance or stock options. While some employees may find this unacceptable, others may find the pay bump critical to their livelihood.
Some advice to retailers and restaurateurs: before slashing benefits or hiking up wages, ask your employees what matters most to them and what will improve their lives. At the end of the day, happy employees = happy customers.
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