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Amazon bumps pay for warehouse, delivery workers

Average starting hourly pay to increase from $18 to over $19

Amazon frontline workers will begin earning more in October, with the ability to access up to 70% of those earnings at any time (Photo: Jim Allen/FreightWaves)

It’s been a tumultuous couple months for Amazon’s logistics network as it contends with unionization efforts, an overbuild of warehouse space and an OSHA investigation into working conditions.

The heat is on. But the e-commerce giant just took a step to smooth over its relationship with front-line workers.

On Wednesday, Amazon (NASDAQ: AMZN) announced that beginning in October, warehouse workers and delivery drivers will see their average starting pay rise from $18 to over $19 an hour. The marketplace also introduced a benefit that will allow workers to collect pay at any point during the month, and it expanded its career advancement and development programs.

Amazon clarified that front-line workers will earn between $16 and $26 per hour depending on their position and location in the U.S. The pay increases are part of a $1 billion investment the company is making over the next year.

“Continuing to invest in pay, providing easy access to earned wages at any time during the month and offering great benefits and career advancement opportunities are all part of our long-term efforts to be the best employer in the world,” said John Felton, Amazon’s senior vice president of worldwide operations.

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The wage bump comes as Amazon deals with a churn rate that The New York Times estimates is as high as 150% per year — that comes out to 3% turnover every week. It’s a rate nearly double that of the retail and logistics industries. And it’s put Amazon in a hole where it may run out of people to hire by 2024 because it has gone through so many workers.

Hiking wages should have the effect of attracting and retaining additional workers, both in the short term to help the company contend with peak holiday season and in the long term. The same is true of Amazon’s newly released perk, Anytime Pay.

The service, now available to all employees in the company’s operations, corporate and technology networks, allows workers to access up to 70% of eligible pay at any time without fees. Previously, workers were paid once or twice per month at regular intervals.

The e-commerce giant also added a new development program to its career advancement opportunities. The program, Amazon Intelligence Initiative, places employees in engineering roles within Amazon Web Services, the company’s cloud computing platform. Employees are provided full-time employment as they go through a 12- to 14-month training period before being placed into an appropriate role.

Watch: Amazon allowing sellers to use warehouses

The investments in pay and benefits come as Amazon’s chances of winning the union battle embroiling its Staten Island, New York, facility dwindle — and as workers fight their own battle at a facility in Albany just a few hours north. Higher wages are one of several concessions workers hope to win, along with the reinstatement of 20-minute breaks, changes to safety programs and more.

Amazon has faced a slew of allegations accusing it of near-constant surveillance, poor COVID-19 safety precautions and even limiting bathroom breaks to the point where workers have to urinate in bottles. It’s also being investigated by the Department of Labor for “potential worker safety hazards” at facilities in New York City, Chicago and Orlando, Florida.

The company on Thursday took steps to change that narrative, announcing disaster relief efforts in the wake of Hurricane Ian’s severe impact on Florida. It closed more than 80 facilities in the storm’s path, including Whole Foods stores, and is paying employees for scheduled shifts during the closures.

Amazon has also prepositioned over 1 million relief items at a special warehouse in Atlanta, and it has 10 trucks with over 360,000 bottles of water strategically spread across Florida. It added that it will extend its delivery window for customers in impacted areas and is monitoring online stores 24/7 to combat price gouging of essential items.

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Jack Daleo

Jack Daleo is a staff writer for Flying Magazine covering advanced air mobility, including everything from drones to unmanned aircraft systems to space travel — and a whole lot more. He spent close to two years reporting on drone delivery for FreightWaves, covering the biggest news and developments in the space and connecting with industry executives and experts. Jack is also a basketball aficionado, a frequent traveler and a lover of all things logistics.