On Tuesday, October 2, Amazon (AMZN  ) announced that effective November 1, it will raise the minimum wage for all US employees to $15 an hour - more than double the current federal minimum. The wage hike will apply all employees except contract workers, meaning that full-time, part-time, seasonal, and temporary workers are covered. This is a significant increase; pay currently varies by region and can be as little as $11 an hour.

The pay boost comes after CEO Jeff Bezos - who, with an estimated net worth of $165 billion, is the world's richest man - was lambasted earlier this year when reports emerged that the median pay for his employees was a scant $28,446. Bezos defended himself at the time by saying that this was the median for all employees globally, and that the figure for US workers was higher, at $34,123. Still, reports also noted that many US-based Amazon employees received SNAP benefits, also known as food stamps, due to low earnings. "We listened to our critics, thought hard about what we wanted to do, and decided we wanted to lead," said Bezos of the increased wages.

Amazon will also lobby Washington DC to raise the minimum wage nationally. According to senior VP David Clarke, while Amazon won't pressure lawmakers to go as high as $15 an hour and it's ultimately "up to Congress and the experts to decide what [the minimum wage] should be," the company does believe the $7.25 threshold, which hasn't been updated since 2009, is too low.

Democratic Vermont Senator Bernie Sanders, one of Bezos' most vocal critics, applauded the change. Economists are less impressed. For Amazon, which recently reached a $1 trillion valuation, the pay hike may have less to do with Bezos' change of heart and more to do with a tight labor market in which companies must compete for workers, particularly with the busy holiday season approaching. Amazon also can use the lift in wages to counteract a recent slew of bad press over its employment practices. Lastly, more money in the pockets of Amazon employees means they might turn around and spend those extra funds on Amazon products, meaning the company might recoup some expenses on a higher sales volume.

Senator Sanders also said he hoped Amazon's decision would pressure other major employers like McDonald's (MCD  ) and Walmart (WMT  ) to raise pay, though Amazon isn't the first company to raise wages. Target (TGT  ), for example, plans to put a $15 minimum wage into effect by 2020, and Costco (COST  ) lifted its starting wage to $14.

Amazon is also changing another method of employee compensation: Restricted Stock Units. The RSU program, which applied to hourly order fulfillment and customer service employees, offered shares of stock under certain conditions. But the company has claimed that employees favor cash, and so they plan to phase out the RSU program in favor of a direct stock purchase plan before 2020. It will be difficult for employees to directly purchase stocks even when making $15 an hour, as share price hovers around $2,000.

Still, despite ongoing concerns over unfair labor practices and automation, Amazon employees were thrilled at the news.