Scott Duke Kominers, Columnist

Amazon’s $15 Minimum Wage Might Cost Some Workers

Keeping low-paid underperformers on the payroll will be harder to justify, while others who benefited from bonuses worry they may see pay cuts.

October 10, 2018 at 2:00 PM UTC

By Scott Duke Kominers

Scott Duke Kominers is the MBA Class of 1960 Associate Professor of Business Administration at Harvard Business School and a faculty affiliate of the Harvard University department of economics.

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Photographer: Mark Makela/Getty Images

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Last week, Amazon.com Inc. announced a pledge to increase its employees’ minimum wage to $15 an hour to much fanfare from the left, and at least some from the right. But those raises aren’t coming for free; to help pay for them, Amazon has said it will eliminate its hourly workers’ monthly bonuses and stock awards.

I don’t have a view on what’s the right minimum wage for Amazon.1 But the fact that Amazon is raising base wages while eliminating performance pay should give us pause.