Amazon Raises Average Wage To $18 As It Scrambles To Fill 125,000 Jobs

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by Tyler Durden
Wednesday, Sep 15, 2021 - 12:29 PM

With millions of Americans still sitting on the sidelines of the labor market, Amazon and Wal-Mart are going head to head in a battle to recruit thousands of additional workers before the holidays. The competition for bodies has gotten so intense that Amazon recently recommended to the contractors who handle the last leg of package delivery (you know, the ones who drive around in those navy blue Amazon-branded trucks?) to stop screening potential drivers for marijuana.

Days after Wal-Mart revealed it would be scrapping its quarterly bonus program in favor of raising wages, Amazon has reportedly one-upped its chief rival by raising its average wage to $18 ahead of a hiring spree that could see it hire another 125K workers before the holidays, according to an exclusive from Reuters.

That $18 average has risen from $17 since May. In some locations, the company is giving signing bonuses of $3,000, said Dave Bozeman, vice president of Amazon Delivery Services- roughly triple what the company offered four months ago.

Bozeman attributed Amazon's latest compensation increase to fierce competition for workers. Amazon did not give exact figures, but said a $1 raise on a $17-per-hour wage would amount to a hike of about 6%. Amazon, now the second-biggest private employer in the US, adopted a $15 an hour minimum wage in 2018, while Walmart recently touted average hourly wages of $16.40. Dow componentWalgreens Boots Alliance said it would raise its minimum to $15 in October.

"It's a tight labor market, and we've seen some of that as the entire industry is seeing," said Bozeman, who spoke in an interview at a delivery station in Tukwila, Washington.

Amazon has tried other incentives, like offering payments toward workers' college tuition and starting wages as high as $22.50 for certain gigs.

While some might be tempting to credit Amazon for following through with Jeff Bezos' outgoing promise of a "better vision" for its employees, the reality is that there are more job openings than workers.

Amazon needs thousands of new workers as the 100 logistics facilities launching this month in the US, on top of more than 250 that opened earlier this year. Workers are also needed to aid in Amazon's long-in-the-works plan to roll out one-day delivery for Prime loyalty club members.