Amazon (NASDAQ:AMZN) will soon begin paying a minimum wage of $15 an hour, and that's something an estimated 250,000 employees and another 100,000 seasonal workers are apt to celebrate. The change is scheduled to take effect on Nov. 1 of this year and applies to full-time, part-time, and temporary workers alike. Furthermore, it will trickle down to Whole Foods and all other Amazon subsidiaries.
And it's not just Amazon that's looking to better reward workers. Target (NYSE:TGT) raised its minimum wage for new employees to $12 an hour back in September, and it has plans to increase that figure to $15 an hour by the close of 2020.
This news is no doubt a source of relief not just for Amazon employees but for workers nationwide who struggle to make ends meet in the face of stagnant earnings -- especially since the minimum wage has held steady at $7.25 an hour since 2009. And while it's easy to argue that a giant like Amazon is better equipped to boost its wages than your typical business, it pays for smaller companies to consider following suit nonetheless. Here's why.
1. You'll attract more qualified candidates
Attracting talent to your business is easier said than done, especially when the wages you're offering aren't much to write home about. By increasing your minimum wage, there's a good chance you'll attract employees with more experience and skills. And that can benefit your business by boosting overall productivity.
2. You'll gain employee loyalty
Just as building a team can be challenging, so too is retaining one. But as you probably know all too well, losing key employees doesn't just mean dealing with dips in overall output; it means having to sink time and money into advertising open positions, vetting candidates, and onboarding new hires. If you increase your minimum wage, however, you'll give your most valued workers a good reason to stay.
3. You'll buy yourself some goodwill
Amazon's decision to increase its minimum wage is all over the news. If you're a smaller business and you decide to go the same route, you obviously can't expect the same level of media coverage. But what you can expect is for word to get around, and once it does, there's a good chance more customers will come to respect the way you're running your company -- and show their appreciation by opening up their wallets or choosing your business over a competitor that's not known to treat its workers as fairly.
When minimum wages were introduced back in 1938, workers were guaranteed just $0.25 per hour. And while we've come a long way since then, the fact that we've been stuck on $7.25 for nearly a decade highlights the struggle so many lower earners have been grappling with. Not everyone can afford to pay employees $15 an hour, but if you can do any better than you're doing at present, know that there's much to be gained by being generous.