As the holiday season approaches, Amazon has announced that more than 800,000 warehouse workers in the United States will receive an average pay raise of $1.50 per hour starting this month, along with complimentary Prime subscriptions beginning next year.
With this pay increase, the company's starting wages for front-line employees will go up to $22 an hour, up from the previous $20.50.
The move comes as the online retail giant and one of the largest private employers in the U.S. has been under fire for unsafe working conditions in its warehouses, especially during the company's annual Prime Day event and the holiday season.
However, the company stated Wednesday that it has improved safety measures, claiming that work-related injuries have reduced to 28% and serious injuries lowered by 75% in the last five years.
Last week, Amazon announced wage hikes for contract delivery drivers to around $22 an hour as part of its $2.1 billion investment this year in a third-party logistics program.
These latest hikes reflect Amazon's efforts to integrate feedback from its workforce. The company currently holds a market cap of $1.69 trillion. The increase in wages highlights the competitive job market for logistics workers, spurred by the growth of online shopping. While the job market is showing signs of cooling, the economy is still creating new jobs.
Based on the statistics by the Labor Department, the average hourly wage for transportation and warehouse workers rose to $30.79 in August, marking a 22% increase since August 2020. In July, more than 460,000 jobs remained unfilled in the transportation and warehouse sector.
Amid wage increases, Amazon also announced it plans to host a Prime Day-like deal bonanza from Oct. 8-9 to kick off the holiday season with big savings. As per the company's press release, Prime Big Deal Days 2024 will also be launched in Australia, Belgium, Brazil, Canada, France, Germany, Italy, Sweden, and the U.K., among others.
The company stated that its Prime Day event broke its own records in July, with online sales surpassing over $14.2 billion.
Amazon's competitors, including UPS, Walmart and Target, also increased the wages for their warehouse workers. Last year, UPS and the Teamsters union signed a five-year agreement, which included raising the starting pay to $23 an hour during the contract term.
