"You've got a company that can't attract and keep labour because their wage rates are at the bottom of the pay scale, generally speaking", said Marc Wulfraat, president of logistics consultancy MWPVL International, which closely tracks Amazon's fulfillment operation.
In a statement, CEO Jeff Bezos said that "we listened to our critics, thought hard about what we wanted to do, and decided we wanted to lead". Amazon's current minimum hourly wage starts at $11, a source close to the company said.
The company on Tuesday announced it would raise the minimum wage for its USA employees to $US15 an hour, including for those working in its fulfillment centres.
Amazon has recently been targeted over its pay by Senator Bernie Sanders, who last month introduced a less-than-subtly-named piece of legislation called the Stop Bad Employers by Zering Out Subsidies-"Stop BEZOS"-Act".
More than 350,000 United States workers will see the minimum wage increase to $15 (£11.57) an hour, while nearly 40,000 UK workers will see their pay rise to £10.50 in London and £9.50 across the rest of the country.
The online retailer made the announcement Tuesday. Only one state - Washington - had a minimum wage above $8 an hour.
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Amazon, whose value topped an awesome $1 trillion in September, has been under political and economic pressure to pay its employees more.
Workers across the country have pushed for a $15 minimum wage. Mr Bezos said he encouraged the company's competitors to increase their own minimum wages.
The company has a history of complaints about gruelling workplace conditions and lower wages, and has had to deal with lawsuits, picketing and issues with management tactics.
Sanders predicted that other companies including Wal-Mart and McDonald's would follow suit by raising wages. The change will take effect on November 1, and will apply to full-time, part-time, temporary, and seasonal workers.
Amazon.com shares were little changed Tuesday, but they have been among the best performers in the S&P 500 this year, with a gain of about 70 per cent, compared with a gain of 9 per cent for the S&P.