“We listened to our critics,thought hard about what we wanted to do, and decided we want tolead,” Chief Executive Officer Bezos said in the statement. (Photo:Bloomberg)

Jeff Bezos blinked.

Bowing to political pressure, he announced plans Tuesdayto raise the minimum wage for all Amazon.com Inc. employeesin the U.S. and U.K.

Effective Nov. 1, the company will offer $15 an hour to morethan 250,000 current employees in the U.S. along with 100,000 moreseasonal workers who will be hired during theholidays, Amazon said in a statement. The hourly minimum wage inthe London area will rise to 10.50 pounds ($13.60), and 9.50 poundsin the rest of the U.K., affecting some 37,000 current and seasonalemployees, according to a separate statement.

Related: Amazon employees at or near top of food stamp listsin at least five states

“We listened to our critics, thought hard about what we wantedto do, and decided we want to lead,” Chief Executive Officer Bezossaid in the statement. “We're excited about this change andencourage our competitors and other large employers to joinus.”

The e-commerce behemoth has been hit by lawsuits in recent yearsalleging that it has used contract employees to skirt regulationsand cut costs in the U.S. and abroad. Vermont Senator and formerpresidential candidate Bernie Sanders has charged that Amazon paysits workers such a low wage that many of them have to apply forpublic assistance.

Amazon, like other retailers, is also responding to a tight U.S.labor market. Earlier this year, Walmart Inc. boosted its startinghourly wage to $11 an hour. Target Corp. last year increased itsminimum hourly wage to $11 and bumped that to $12 this year, withthe goal to reach $15 by the end of 2020. Costco Wholesale Corp.and other retail chains like TJX Cos. have also raised wages inrecent years. Amazon's pay hike includes workers at Whole Foods,which the company acquired last year.

Bezos, the world's richest man, is getting a lot of publicrelations bang for the buck. Analysts don't expect the wage hike tohave much impact on costs. Based on expected revenue for next year,according to Loop Capital Markets LLC analyst Anthony Chukumba, thehike will add $1 billion to $2 billion in incremental costs.

“It may sound like a lot of money,” he said. “But in the contextof how big Amazon is, it doesn't move the needle a whole heck of alot.” Meanwhile, Amazon is using more robots in warehouses, whichshould slow hiring growth and help the company keep payrollexpenses in check.

Shares were little changed at $1992.15 at 10:20 a.m. in NewYork. Amazon's stock has risen 71 percent this year, valuing thecompany at $978 billion.

The political pressure on Amazon has been ratcheting up inrecent months. Sanders introduced a bill last month that would taxAmazon, Walmart Inc. and other big employers whose workers collectpublic assistance. If the companies paid a living wage, U.S.taxpayers would save $150 billion a year on government assistanceprograms, such as food stamps, Medicaid and public housing, Sandersargues. The bill is called the stop Bad Employers by Zeroing OutSubsidies Act — or Stop BEZOS.

In a blog post responding to Sanders at the time, Amazon said itcreated 130,000 new jobs last year and that employees receivingfood stamps include those who work part-time or only worked atAmazon for brief periods.

Amazon said on Tuesday that company lobbyists will also beginadvocating for an increase in the U.S. federal minimum wage, whichhas been $7.25 an hour since 2009. Amazon's new U.S. wage impliesan annual income of about $31,200 for a 40-hour-per week worker.The U.S. income poverty threshold for a family of four is about$25,000, according to 2017 Census bureau figures.

“Today I want to give credit where credit is due,” Sanders saidTuesday. “And I want to congratulate Mr. Bezos for doing exactlythe right thing.” The Senator said he looks forward to working withBezos on a bill to raise the federal minimum wage.

Bezos' actions, as “one of the most significant, importantcorporate leaders in this country, that's going to reverberatearound the corporate world,” Sanders said in an interview. He saidhe has “no doubt” that other profitable corporations — in the fastfood industry, the airlines and retail — will follow suit.

Is there a downside to offering a $15 minimumwage?

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