Amazon Boosts Pay for Frontline Staff at Cost of $1 Billion

The logo of Amazon on the door of an Amazon Books retail store in New York City, on Feb. 14, 2019. Brendan McDermid/Reuters

Amazon has announced pay increases for its frontline employees in the United States and is planning to set aside $1 billion over the next year for the purpose.

The average starting pay for frontline employees will rise from $18 per hour to $19, with employees making anywhere between $16 and $26 per hour depending on their location in the country and job position, the company said in a press release on Sept. 28. Amazon also announced more investments in employee career-development programs, bringing the total investment in benefits to almost $10 billion in 2022. The e-commerce giant will also expand Anytime Pay, its pay access program, to all employees across the country.

“Anytime Pay provides Amazon employees access to up to 70 percent of their eligible earned pay—whenever they choose and without fees—with the goal of putting employees in control of their pay schedule. Previously, most Amazon employees received their regular pay once or twice monthly,” according to the release.

Amazon employed more than 1.1 million people across the United States by the end of 2021, according to Bloomberg. It is the second-largest private employer in the country, just behind Walmart.

Most employees work on hourly wages and are employed in retail stores, like Amazon Fresh and Whole Foods Market, or in packing and shipping sections.

The company’s decision to raise wages comes as some workers are pushing for unionizing Amazon’s U.S. facilities. Amazon is dealing with high employee turnover as workers are looking for better-paying jobs amid the soaring cost of living.

A U.S. labor official recently ruled against Amazon’s attempt to overturn the results of a labor union election at the JFK8 building in the New York City borough of Staten Island. The company had claimed that the election was “improperly influenced.”

Pushing Out Smaller Players

Amazon has been campaigning to make $15 per hour the national minimum wage. Though the company portrays such campaigns as part of its humanitarian efforts, labor policy researcher Rachel Greszler points out that Amazon is just doing it because raising wages would give them a “competitive advantage.”

Thanks to its massive capital base, Amazon can make investments in automation unlike small competitors, Greszler said in an interview with The Epoch Times.

The company has automated many low-productivity jobs “out of existence.” Raising minimum wages will only hurt small businesses that are in a hamstrung position to hire workers at lower wages.

“Many of them can’t yet afford to pay all their workers at least $15 per hour, but that doesn’t mean that they should just be driven out of business or prevented from starting and growing,” Greszler said.

“I think that if Amazon had to pay the equivalent of $15 minimum wage when it first set up shop 25 years ago, it might not even exist today.”

A recent analysis by MWPVL International Inc., which tracks Amazon’s real-estate footprint, revealed that the company has shuttered plans to open 42 facilities in the United States totaling roughly 25 million square feet of usable space. In total, MWPVL expects Amazon to open 250 facilities in 2022.

Petr Svab contributed to the report.