If there’s one thing we learned after the big tax breaks for corporations, it’s that when big business sounds like it’s giving a big chunk of money to the little people, the big picture provides an entirely different story.
For Amazon, paying a higher wage will help the company find and retain employees while also blunting some of the criticism it has faced for treating employees poorly. And the $15 minimum should help lower-skilled employees, reduce turnover, minimize retraining costs and attract better job applicants.
In Minnesota, Amazon employs more than 2,000 full-time workers, most of them at a large fulfillment center in Shakopee. The company has a smaller sorting center in Shakopee, a transportation delivery station in Eagan and a Prime Now hub in southeast Minneapolis. And earlier this year, the company announced plans to hire an additional 200 engineers and other IT workers for its tech hub in the North Loop in Minneapolis, where it already has about 150 employees.
But the New York Times looked at the whole story of the Amazon announcement. In particular, it noted that while increasing minimum wage, Amazon is eliminating bonuses and stock options.
Near Minneapolis, Katy Iber, who handles returned products at an Amazon warehouse, works the night shift. Her region has a tight local labor market, so she already makes more than $15 an hour.
In an “all hands” meeting at the start of her shift on Thursday — her first day at work since the pay raise was announced — she learned Amazon was raising her base pay by $1 an hour.
But it was also ending monthly attendance and productivity bonuses, known as the Variable Compensation Plan, or V.C.P. And she would no longer be granted valuable Amazon shares. The trade-off meant she’d be losing money, she said.
It was as though the company was saying “‘thanks, we appreciate you going into the holidays. Here’s less money,’” Ms. Iber said. The New York Times reached Ms. Iber through the Awood Center, a nonprofit that is organizing East African workers in the region
At its Shakopee plant and others, Amazon offered a 4 percent bonus for attendance and another 4 percent bonus for meeting production goals. Both of those bonuses will end on November 1.
Another program gave employees two shares of stock, currently valued at $1,864.42 each. That program, too, is ending.
Ms. Iber’s bonus in August was $1.28 an hour. In the three months around the holidays, that could be more than $2.50. That’s far more than the $1 she’s getting with the increase the company announced to applause. She’s also down when considering the stock bonuses. She’ll keep what she’s got; she won’t get any more.
She told the Times she was hoping to buy a new water heater with bonuses this year. Now she says she’ll wait for it to break and put it on a credit card.