Amazon CEO says 'it's high time' the government increases the federal minimum wage

• Amazon CEO Andy Jassy said a federal minimum wage below $7.50 "feels very wrong."
• Jassy said he's not sure how much higher Amazon's wages will go after reaching a $18 per hour starting average.

Amazon CEO Andy Jassy said he believes it's time to raise the federal minimum wage.

"It's high time that change too," Jassy said during an interview with CNBC Squawk Box on Thursday. "I don't know the exact number, but below $7.50, to me, feels very wrong. I think it should be closer to that $15 minimum wage that we started a few years ago."

Amazon has lead retailers in establishing a new minimum wage. The ecommerce giant raised its starting wages for all US employees to at least $15 an hour in 2018. Last fall, the company hiked its average starting salary to $18 an hour. The company has been lobbying Congress to raise the federal minimum wage from $7.25 to at least $15 per hour for four years.

Wages have been on the rise in the US over the past year as workers quit their jobs in record numbers and participated in a "Great Reshuffle." The pandemic has left many major retailers facing a labor crunch. In 2021, Amazon grew its workforce to 1.6 million employees, but Jassy said Amazon has not been immune to the labor shortage.

"Even though we hired a lot of people, we couldn't hire all the people we needed in all the places that we need," Jassy said.

Amazon hourly employees have a yearly turnover rate of about 150%, with some workers leaving the company within a few days or weeks of joining, according to data from a New York Times' investigation. In the past, executives have expressed concern that the company will burn through employees so quickly that they could run out of people to hire.

The Amazon CEO told CNBC he's not sure how much higher Amazon wages can go.

"When you run a retail business like we do, it's true for all retailers, they are relatively low operating margin businesses," Jassy said. "So there's really only so far you can go and have an economic business that makes sense, but we've continued to see wages go up and there's been a very significant acceleration in the last two years. And, you know, it's hard to tell how much more they'll go up. I don't think we'll go backwards though."

Despite Amazon's stance on raising the federal minimum wage, the company has sparred with Sen. Bernie Sanders and even US President Joe Biden.

Last year, Amazon's consumer chief, Dave Clark, said Amazon is "like the Bernie Sanders of employers," but that "we actually deliver a progressive workplace for our constituents."

More recently, Biden took a swipe at Amazon. The president waded into Amazon unionization efforts earlier this month and warned: "Amazon, here we come. Watch." Biden's warning came less than a week after Amazon workers at a warehouse in Staten Island, New York became the first to successfully unionize, though the retailer is challenging the legitimacy of the vote.

Jassy responded to Biden's warning during his interview with CNBC and said he believes Amazon workers are "better off" without a union.

"Everyone is entitled to their own opinion. We have a lot of things that we have supported the administration on and agree with them on," Jassy said. "We won't agree on everything though," he added.