Amazon has increased the hourly wages for workers by $1—what seems like a small amount will cost the company an extra $1 billion a year.
Key Details
- Most front-line warehouse and transportation employees at Amazon are getting a raise, bringing them to $19 an hour.
- In customer fulfillment and other transportation groups, pay will increase to $16 an hour.
- Amazon’s minimum of $15 an hour for all employees will remain the same.
- These employee raises represent nearly $1 billion in additional spending for the online retailer.
- The company is also adjusting its payment policy, allowing employees to receive paychecks more than twice a month.
Why it’s news
Amazon is the second largest private employer in the U.S. with more than 1.5 million employees. The majority of employees are paid hourly.
The decision to increase employee wages comes soon after attempts at several facilities to unionize. A New York warehouse is one prominent example where workers are expected to vote on whether or not to unionize next month.
The company has also faced a shortage of workers. A leaked research memo in June showed that Amazon has concerns about running out of people to hire by 2024.
“If we continue business as usual, Amazon will deplete the available labor supply in the U.S. network by 2024,” the memo, reported on by Vox, says.
Amazon’s move to increase wages could be one way to combat the employee shortages. In addition to retaining current employees, Amazon is making more moves toward automation.
Earlier this month, Amazon acquired Cloostermans, a robotics software development company. Amazon and Cloostermans already worked together before the acquisition.
Amazon looking to expand its robotic force is no surprise. Since acquiring Kiva Systems in 2012, Amazon has used over 520,000 robots in its warehouse operations. More recently, the company launched a fully autonomous mobile robot, capable of driving around employees and having full access to the warehouse.
Cloostermans’ technology will be another step on Amazon’s path toward automation.
