Last week, Amazon announced that it would be raising the minimum wage for all its employees to $15 an hour.
However, employees quickly learned that when Amazon giveth, Amazon taketh away — because, at the same time, the company said it would also be getting rid of monthly bonuses and some stock benefits.
Amazon has since walked back the move, assuring employees in a letter addressed to Sen. Bernie Sandersthat no employee would see their compensation go down as a result of the changes. But some are still skeptical.
Nancy Koehn, historian at the Harvard Business School, says the move could demoralize the corporate giant's workforce.
"Why not just say: 'Everybody is going to get $15 an hour, and, by the way, there will still be incentives to be productive and show up a lot and take an ownership in the company, which is what stock is," Koehn said. "I don't understand that."
Cost doesn't seem to be a prohibitive factor: Deutsche Bank has estimated that the wage increase will cost the company less than 1 percent of its 2019 projected revenue.
"This is not a make or break kind of enterprise they're undertaking, in terms of increased cost," Koehn explained.
Koehn believes Amazon is sending a message to its peers that slashing benefits is acceptable as long as it comes with a minimum wage hike.
"The signal to other companies is: yeah, raise the wages sort of — but not really — or take it away from some people and give it to others," Koehn said.
