As Amazon Set the Pace of Move to $15 per Hour, It Announces Plans for more Wage Hikes

Amazon continues to catch a lot of flak for the way it treats its Fulfillment Center workers, fairly or not on everything from a lack of bathroom breaks to poor protections against COVID-19 to relentless performance monitoring and difficult to meet standards.

Supply Chain Digest Says... That would appear to mean in practice Amazon’s minimum wage is or will be $15.50. What do you say? Click here to send us your comments Click here to see reader feedback

Yet, Amazon seems to have comparatively little trouble filling FC positions, now at over 500,000 in total in the US. That even when Amazon opens an FC that will required one to several thousand workers, perhaps one not far away from another Amazon FC in the area.

The key factor seems clear: attractive pay and benefits, at least as far as the warehouse sector goes. In 2018, Amazon increased its lowest starting wage to $15 an hour for all US employees, following pressure from politicians and worker advocacy groups.

Amazon also offers healthcare coverage starting the first day on the job, and provides a good retirement plan, paid college tuition and other benefits not common or as generous as can be found at Amazon.

And indeed, when workers at an Amazon FC in Bessemer, Alabama voted overwhelmingly to reject a chance to join the Retail, Wholesale and Department Store Union in results announced in early April, interviews with workers there by New York Times reporters found Amazon wage levels and benefits were key factors in how they voted.

"For some workers at the warehouse, the minimum wage of $15 an hour is more than they made in previous jobs and provided a powerful incentive to side with the company. Amazon’s health insurance, which kicks in on the first day of employment, also encouraged loyalty, workers said,” according to the Times’ article.

So with Amazon employing hundreds of thousands of FC workers at $15.00 per hour to start, that is clearly putting pressure on other warehouse operators to follow suit.

And Amazon announced it is raising the ante. Two weeks ago, Amazon it would increase pay by 50 cents to $3 an hour for over half a million of its US operations employees, including FC workers. Darcie Henry, vice president of global human resources for Amazon, made the announcement in a blog post on the company’s website. Amazon said it will spend more than $1 billion on incremental pay for these workers.

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That would appear to mean in practice Amazon’s minimum wage is or will be $15.50.

Amazon’s wage leadership is certainly putting pressure on other distributors large and small. And for months there has been some verbal sparring over wages at top retailers.

In February, Walmart announced it was raising wages for many workers that would bring its average wage to $15.00. But that includes store employees. All warehouse workers at Walmart would make at least $15 per hour.

That a led a spokesperson for grocery rival Kroger to tell Business Insider that "We welcome Walmart's announcement to bring their average wage up to $15 an hour. At Kroger, our average hourly wage has been $15 an hour since 2019."

Target also recently moved in lowest wage for warehouse jobs to $15.00.

Amazon has strongly supported the Raise the Wage Act, a bill backed by President Biden and top Democrats that would increase the federal minimum wage to $15 an hour from $7.25 an hour by 2025 – which makes sense, as the company is already paying FC workers at the level.

Is Amazon driving warehouse wages higher for all? Let us know your thoughts at the Feedback section below.