Amazon Increases Employee Pay Rate Amid Major Hiring Spree

by Jennifer Shea

Amazon is hiking its employee pay rate as it embarks on a major hiring spree ahead of the holiday season.

The company is adding 125,000 warehouse workers, Amazon announced on Tuesday. Some of them will make up to $22.50 an hour.

Amazon has also increased its average starting wage for fulfillment center and transportation workers, according to the New York Post. Their pay has gone up from $15 an hour to $18 an hour.

Amazon Facing Tight Labor Markets

In urban areas, where employers currently tend to face tighter labor markets, Amazon is raising its hourly rate to $22.50 and tacking on $3,000 signing bonuses.

Moreover, the company will be opening more than 100 new fulfillment centers and regional delivery stations this month. That’s after it opened more than 250 such centers and stations over the past year.

Amazon did not say where the new centers and stations will be located.

Move Comes as Other Companies Also Bulk Up Workforces

Meanwhile, other major retailers, such as Home Depot, Macy’s, Target and Walmart, are also adding employees ahead of the holiday season. But many of them have made a change this year: instead of hiring temporary employees, they’re taking on full-time workers.

“With just a few short weeks from the start of the holiday shopping season, retailers are announcing permanent hiring plans rather than seasonal ones,” Andrew Challenger, senior vice president of the outplacement firm Challenger, Gray & Christmas, said in a statement, per the Post.

For instance, in early September, Walmart announced it would be hiring 20,000 logistics workers. It also increased store associates’ hourly wage by $1, bringing the average hourly rate there to $16.40, according to the company.

Still, the 190,000 seasonal jobs that U.S. companies have advertised this year falls short by 301,700 of last year’s seasonal job total, Challenger, Gray & Christmas said.

Executive Says They’re Adding Warehouse Workers to Maintain Pandemic Growth

For its part, Amazon is bulking up its workforce in order to maintain its pandemic-era growth. An executive recently clarified that the major surge in warehouse workers is to help fuel that growth.

“The 125,000 [warehouse workers] is really to help us keep up with our growth,” Amazon Delivery Services Vice President Dave Bozeman told Reuters. He added that only a minority of jobs were to address attrition.

It’s a good time to hire. As jobless benefits expire, fewer Americans are filing unemployment claims.

At the same time, job openings have hit record highs. Some have suggested that the slowness to fill those openings is due to a mismatch between the type of jobs workers are seeking and the type of jobs that are available. But as companies like Amazon sweeten their offers, perhaps that gap will close somewhat.

“It’s a tight labor market, and we’ve seen some of that as the entire industry is seeing,” Bozeman said.