Amazon’s juggernaut keeps scaling new heights. It reached $1tr valuation recently.
Amazon’s core business is warehousing and logistics, employing 600,000 people. The median annual salary its employees receive is $28,000. At Facebook, that figure is $240,000. At Google, it is $141,000 while the figure at Microsoft is $127,000
Amazon is clearly way behind its peers by size. That has made people start asking uncomfortable questions.
Walmart too came under scrutiny when questions were asked why so many of its employees need social assistance? Walmart’s margins are thin, but under pressure, it raised wages. Its margins took the hit. But eventually, its staff turnover reduced and customer experienced improved – and that was captured in its performance which then translated into its higher enterprise value.
Lately, US Senator Bernie Sanders has started questioning why so many of Amazon’s employees are on food stamps?
Amazon pleads its margins are thin. But politicians don’t see that as an excuse. Senator Sander feels Amazon can improve on what it pays its employees.
He is a prominent politician. So this could be the start of heat on Amazon. Expect Amazon coming under pressure to raise its staff’s wages. This will make the margins to squeeze, and its enterprise value to decelerate.
