Amazon set to end wage increases & extra overtime pay in June

The coronavirus outbreak has impacted worker's wages, health, and daily routines. Yahoo Finance’s On The Move panel shares how the coronavirus will continue to affect Amazon workers post-pandemic.

Video Transcript

JULIE HYMAN: We were just talking about some of the challenges that security guards are facing right now, and of course, they're not alone. A lot of workers across the country are working in more stressful conditions right now. And some companies have been compensating them extra for that.

Amazon is one example. That, however, is going to be changing. Melody, Amazon says, what, at the end of May, it sounds like, that hazard pay that its employees have been receiving is going to be no more.

MELODY HAHM: Exactly. May 31st, and that's an extension, an added extension, to the original premise that it would end up being the end of April. Then it was mid-May, and now it's May 31st.

But you are a smart journalist, Julie. The takeaway here is that starting June 1st, all the Amazon employees, it's as if the pandemic is over, right? It's as if things are back to normal. And this is one of the downsides, right, of all of these stay-at-home orders, some of them being lifted, some local officials being lifted. Corporations are taking the opportunity to say, hey, our economy is back up and running, which we know for a fact is untrue.

I think what Gene Sperling told us yesterday when he was talking about his book "Economic Dignity" really struck a chord with me because it just shows that there does seem to be a lot of momentum right now for individuals to tip extra, to feel like they can help these workers that were previously deemed nonessential, and now they're suddenly being heralded as heroes. I think my understanding is, as much as this sounds very cynical, I do not anticipate that this sort of effect will be long lasting or that we can anticipate anything coming out of Congress that would implement a higher pay overall.

ADAM SHAPIRO: Melody, I'm curious. You know, Amazon's move, they've hired people because of COVID-19 because there are so many millions of people who are out of work. Are they at an advantage, and could they possibly-- I mean, do they pay 15 an hour, or are they going to be paying in states that don't have a $15 minimum wage, might they be paying less?

MELODY HAHM: Yeah, so the Fight for 15, as you are pointing out, across the board, Amazon did lift pay to 15 bucks an hour. Of course, there have been many investigations where they're actually not compensated for a certain vacation time. They end up having lower equity compensation. There are less bonuses in play. So overall, the net compensation ends up being lower for a lot of these employees who are making the minimum salary at Amazon.

And then even pivoting, looking at Walmart, a lot of these private employers, you're right. They're the ones who have stepped up to the plate and are offering these new jobs in this time of tumult. But at the same time, that gives them an advantage, but also employees are desperate. So they're not going to be shopping around right now, right?

Previously, we would hear a lot about seasonal workers, that folks would have full-time jobs and then pick up seasonal work just to get some extra cash during the holiday season. We should anticipate some of those kinds of offerings to go away.

DAN HOWLEY: Hey, Melody, do you think that there's going to be a backlash against this? I mean, yes, it's just been announced, but do you think we'll see some kind of build-up over time before this deadline hits and that Amazon will end up extending this increased pay?

MELODY HAHM: Dan, we're in the thick of the backlash. I mean, unions, labor workers, any sort of advocacy groups over this period of time, this ignition was there, right? But the pandemic is merely an extra catalyst to get people galvanizing. You are depending entirely-- your entire sustenance-- especially for folks who can't go out on the street and who can't go out and shop, everything is being purchased online to a certain extent, right?

So we are getting some backlash. I get kind of a couple of emails every morning from different labor groups who are advocating for higher pay overall. And I think, you know, just looking at the median hourly wage of retail workers, it's still $11.37.

So unfortunately, the rhetoric and reality are not matching up right now. So Dan, to your point, maybe Bezos and co will end up keeping that higher wage for longer. Maybe hazard pay will be a longstanding thing. Unfortunately, I don't think I'm very optimistic about that becoming a reality.

JULIE HYMAN: And we should mention, by the way, that it's not just Amazon. Retailers like Kroger, the big grocery store chain, also ending their hazard pay. So this seems to be a little bit more widespread.