The company said Wednesday it plans to increase the average starting wage for what it called its front-line workers from $18 an hour to more than $19. The average is based on a pay scale that ranges from $16 to $26 an hour. Amazon said the increases will cost it about $1 billion over the next year.
Amazon also said its workers will now be able to choose when they collect their pay with a program the company’s calling Anytime Pay. The more flexible pay schedule lets workers decide when and how often they get paid up to as much as 70 percent of what they are owed.
“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,” Amazon senior vice president of worldwide operations John Felton said in a statement.
The updates on employee benefits also came with expansion of the company’s career development programs.
Amazon said in total spending on employees is set to approach $10 billion this year.
The wage hike comes as the Teamsters Union escalates efforts to organize Amazon’s workforce.
Last week the union staged a rally outside Amazon’s Seattle headquarters, with 1,000 members calling for the company’s workforce to band together and urging improvements in working conditions.
“The Teamsters aren’t going away,” general president Sean M. O’Brien said in a statement last week following the protest, going on to say, “Amazon will not churn and burn American workers and get away with it.”
A spokesperson for the union could not be reached for comment Wednesday on the wage increase news.
This month a non-profit group called the Warehouse Worker Resource Center (WWRC), based out of Ontario, Calif., said Amazon’s San Bernardino air hub workers were being forced to work in extreme temperatures. The state’s recent heat waves, which saw temperatures in the 90s and 100s, were the basis for a report from WWRC that found temperatures as high as 121 degrees in some employee work areas.
The report was based on employee recordings of the temperature at the Inland Empire facility, referred to internally as KSBD, between Aug. 31 and Sept. 6 indoors, inside planes, in trailers and outdoors on the tarmac.
The WWRC and workers criticized the company’s announcement on wages.
“As you know, Amazon warehouse workers at KSBD [the San Bernardino air hub] in the Inland Empire have been calling for a pay increase, improved safety measures and an end to retaliation,” a spokesperson for the WWRC told Sourcing Journal Wednesday evening. “Amazon’s response thus far has been to bring in high-priced consultants to attempt to interfere with their right to organize…. Workers are demanding a $5 increase and expectedly feel insulted by this announcement.”
The worker group Inland Empire Amazon Workers United issued a similar call for a larger increase to address inflation.
“More than 800 Amazon warehouse workers at KSBD stood together for higher pay; over 100 of us confronted management about staying safe in the heatwaves and more than 150 of us walked out on Aug. 15 when Amazon ignored our demands,” the group said Wednesday.
It went on to attribute the company’s announcement to its efforts, along with other workers around the country, to demand increased pay and safer working environments.
“While we know Amazon would not have raised pay if we had not demanded it, we need $5 an hour to meet the rising costs in the Inland Empire,” it said.
Meanwhile, Bloomberg reported Wednesday Amazon plans on closing what it said are a number of its call centers, citing the continued trend of working from home and real estate savings. The closures come as Amazon also works to right-size its fulfillment center and distribution footprint in line with consumer buying trends post-pandemic.