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When Amazon raises minimum wage, local businesses follow suit

Many small business owners don’t like the pressure.

Tad Mollnhauer, who runs two printing and shipping stores near Orlando, Fla., Said entry-level workers typically made between $ 10 and $ 12 an hour. But these days, anyone who pays that rate risks losing workers to Amazon. (The state’s minimum wage is less than $ 9 an hour, but it will drop to $ 10 this year following a referendum approved by voters in November. The minimum will increase by $ 1 a year after that, reaching $ 15 an hour in 2026.)

Mr Mollnhauer said it was difficult for small businesses like his to match Amazon’s pay.

“Their network and resources are spread across the country,” allowing Amazon to pay higher-than-market wages in some places, he said. “For me, as two stores, I can’t do that.”

Jay Carney, senior vice president of Amazon, said the company was aware of the impact its policy could have on other employers. “We knew that by doing this we would encourage other employers to do the same, and if that happened it would put upward pressure on wages in general, which would be good,” he said. declared.

But he rejected suggestions that Amazon is using its political power to harm rivals. “We have no power to force anyone to do this, only Congress does it,” he said.

Jared Bernstein, a member of the White House Council of Economic Advisers, said the document showed both the potential ripple effects for workers of the increase in the federal minimum wage – which studies found would help workers. workers who earn more than the minimum also get increases – and the limits of the efforts of private companies.

“There is simply no way to be sure that you can reach the tens of millions of hardworking but poorly paid workers without significantly raising the national minimum wage,” he said.

No Republican senator is backing the $ 15 an hour bill that Amazon approved, and several Democrats have concerns about it. Given those headwinds and an unfavorable ruling by the Senate parliamentarian, the provision will almost certainly not be part of the final version of President Biden’s relief package.