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Willl Facebook’s Wage Hike Stress Other Internet Peers?


May. 16 2019, Published 3:12 p.m. ET

Facebook to raise wages

Social media giant Facebook (FB) has agreed to raise the minimum wage for thousands of its US contract workers in the Bay Area, New York, Washington, DC, and Seattle. The company also has plans to pay even higher wages as well as provide support and counseling to contractors in those regions who moderate content and remove disturbing photos and videos that show up on the company’s platform.

Facebook has been spending a lot of money to maintain the security and compliance of its platform and has also hired thousands of people to check unusual activity on the platform and remove fake accounts and pages. Facebook’s total costs and expenses rose more than 80% YoY to $11.7 billion in the first quarter of 2019.

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Wage hike

The workers have been getting $15 per hour since 2015, but that hasn’t been enough amid the rising cost of living in areas like the San Francisco Bay Area. Facebook has therefore increased the wages to $20 per hour for contractors in the San Francisco area, New York, and Washington, and $18 an hour in Seattle. The workers, who review the content according to Facebook’s community policies will be paid a minimum of $18 per hour in the country and up to $22 in expensive areas like the Bay Area, New York, and Washington, DC. Facebook will start the new payment system by mid-2020.

Facebook’s announcement might pressure other Internet peers including Amazon (AMZN) and Alphabet’s (GOOGL) unit Google. Last year, Amazon stated that it is implementing a minimum $15 per hour to its workers, whereas Google noted in April that its non-employee workforce gets at least $15 an hour.


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