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Typically maligned over its benefits and working conditions, Amazon has unexpectedly pledged more than $1billion to improve pay and health benefits for its US fulfillment and transportation employees.
The company said the average hourly wage for frontline staff will rise above $23. For long-tenured employees, hourly increases will range from $1.10 to $1.90. Full-time staff can expect an annual bump of about $1,600.
Health care costs cut sharply
In addition to pay rises, Amazon is adjusting its entry-level health plan. From next year, weekly contributions will fall to $5, while co-pays for primary care, mental health and most non-specialist visits will also drop to $5. The business said the changes mean contributions will fall 34% and co-pays will decrease 87% for employees using the plan.
Amazon, headquartered in Seattle, employs 1.5 million people worldwide.
The announcement comes less than a year after a series of workplace flashpoints. In December, seven Amazon facilities went on strike, with the Teamsters union pressing for a labor deal during the peak holiday season. That same month, the company settled with the Occupational Safety and Health Administration, agreeing to nationwide ergonomic changes after regulators said staff faced hazardous conditions that contributed to back and musculoskeletal injuries.
Retail rivals raise the bar
Amazon’s move follows pay hikes at major competitors. Walmart, the country’s largest private employer, said in January that average hourly wages for its staff had risen above $18, up from $17.50. The company cited the creation of new higher-paying roles in Auto Care Centers. A year earlier, it lifted starting pay rates to between $14 and $19 per hour, depending on location.
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Target has also raised its baseline. The retailer said starting hourly wages at its stores and distribution centers vary between $15 and $24 depending on location. The average hourly rate for a Target store employee now stands above $18.
Amazon’s decision to raise pay and cut health costs reflects mounting pressure in the retail sector to stay competitive on compensation, benefits and working conditions as rivals continue to adjust their own packages.
