Amazon is trying to rebuild its reputation by raising wages and supporting small and medium-sized enterprises

It is learned that when Amazon released its third-quarter earnings report last week, Andy Jassy delivered a speech on Amazon's future development strategy. In addition to continuing to invest in the retail industry, Amazon will also address the social issues that it has been criticized for.

Although people prefer to solve Amazon's social problems through greater tax and spending activities and greater regulation, and are disappointed with Amazon's substantive efforts, it is undeniable that Amazon is indeed making changes and trying to reverse its reputation.

Minimum wage

The U.S. government has been working to raise the federal minimum wage, with a goal of doubling it to $15 an hour. But Amazon, which raised its wages to $15 an hour on its own initiative nearly three years ago, is raising its minimum wage for entry-level workers to $18 as a tightening labor market and supply chain shortages cause prices to surge.

Amazon has more than 500,000 entry-level workers, and based on the wage levels of 500,000 employees, every dollar Amazon pays above the federal minimum wage increases its wage expenses by approximately $4 million per day, plus benefits and other direct employment costs.

Depending on legislation in different regions, Amazon could be paying nearly $8 per hour more than the local minimum wage, which could easily increase Amazon's daily base wage costs by $40 million.

Employee skills upgrade

Additionally, to support fiscal spending to raise wages, Amazon is working to upskill hundreds of thousands of workers through its Upskill2025 program.

It also recently announced another $1.2 billion outlay to provide free community college to more than 750,000 front-line workers, another social initiative that has largely fallen in line with Wall Street.

Sustainability

As the public looks to more federal regulations to push companies to invest in carbon neutrality and other social good initiatives, Amazon is already using its resources and influence to accelerate those efforts.

In 2019, Amazon co-founded the so-called "Climate Pledge", which aims to achieve carbon neutrality by 2040, 10 years ahead of the Paris Agreement. Amazon has also invested billions of dollars and actively used its influence to bring more than 200 signatories with annual revenues exceeding $1.8 trillion.

Supporting small and medium-sized enterprises

Amazon is often accused of using its massive platform to squeeze and exploit small business sellers.

But the data provided by Amazon shows the opposite is true. While there are various government programs designed to help small businesses, Amazon, as a platform with end-to-end back-end logistics, has greatly promoted the development of small businesses.

In 2020, Amazon invested $18 billion to provide 135 tools to its small and medium-sized businesses (SMBs) , while pledging to train 500,000 SMBs and entrepreneurs and add more than 100,000 small businesses.

These investments are well documented in its 2021 SMB Impact Report, where Amazon’s investments have helped SMBs reduce shipping costs by 30%, increase revenue by 20%-25%, reduce fraud, and provide ad-supported services and access to loans. It has invested $150 million to help Black business owners.

In short, Amazon is addressing social impact issues that governments are ignoring. It is spending billions of dollars to raise the minimum wage, upskill its workforce, send its frontline workers to community college, launch meaningful and measurable climate change and social initiatives, and help thousands of small business owners.

The report said: "Although it is still self-interest, when it comes to social issues, making meaningful progress is the most important thing. Andy Jassy is following what Jeff Bezos has done for years. Invest first, then develop. At the same time, its social impact deserves more recognition than it has received so far."