Amazon raises minimum pay by $1/hour for US operations workers

Amazon is raising the minimum starting pay for its U.S. core operations workers — including delivery drivers and fulfillment-center employees — to $20 an hour, and average hourly pay to nearly $24, the company said. Amazon frames the change as a $1-an-hour increase for eligible employees. “When you add in the value of our industry-leading benefits, average total compensation comes to more than $32 per hour,” Amazon Senior Vice President Udit Madan wrote in a blog post.

The raises will cost Amazon more than $1.5 billion — about 0.06% of its $2.68 trillion market capitalization. Amazon says it will also give employees access to a low-cost banking product called Day 1 Financial, membership in First Tech Federal Credit Union, a 20% in-store discount at Whole Foods Market (which Amazon owns), and a 10% discount on groceries ordered online through Amazon. Those add to benefits Amazon already offers, including free Prime memberships, prepaid education programs, and healthcare coverage.

Reaction on a subreddit for Amazon fulfillment-center employees was less than enthusiastic — several workers pointed out that the Whole Foods discount would merely bring prices closer to what a regular grocery store already charges, given the chain’s reputation for higher prices.

Why it matters

The raise puts Amazon’s warehouse and delivery pay ahead of many US retail peers even as the increase amounts to a rounding error against the company’s market value, underscoring how large tech and retail employers can absorb wage gains without denting their balance sheets.