Amazon Invests $1 Billion to Boost Worker Pay and Health Benefits

Amazon has announced a significant investment exceeding $1 billion aimed at increasing wages and reducing health care costs for its U.S. fulfillment and transportation workers. The Seattle-based company revealed these changes on Wednesday, stating that the average pay will rise to more than $23 per hour. For some of its longest-serving employees, hourly wages will increase by between $1.10 and $1.90. Full-time employees can expect an average annual pay increase of $1,600.

In addition to wage hikes, Amazon plans to lower the cost of its entry-level health care plan to $5 per week, with $5 co-pays starting next year. This initiative is projected to reduce weekly contributions by 34% and co-pays by 87% for primary care, mental health, and most non-specialist visits for employees enrolled in the basic plan.

Labor Relations and Industry Comparisons

Amazon, which employs a global workforce of 1.5 million, has faced scrutiny over labor conditions in recent years. In December 2022, workers at seven Amazon facilities staged strikes organized by the Teamsters union, pressing for a labor agreement during the critical holiday shopping period. Furthermore, in the same month, Amazon reached a settlement with the Occupational Safety and Health Administration (OSHA), requiring the implementation of corporate-wide ergonomic measures. OSHA cited hazardous working conditions that contributed to serious musculoskeletal disorders among employees.

The changes in Amazon’s pay and health policies come amid broader trends in the retail sector. In January 2024, Walmart, the largest private employer in the U.S., announced that average wages for its hourly workers would surpass $18, up from $17.50. The increase was attributed to the introduction of higher-paying roles in its Auto Care Centers and other adjustments. Walmart had previously announced in January 2023 that starting wages for U.S. workers would rise to between $14 and $19 an hour, reflecting a shift from the earlier range of $12 to $18.

Meanwhile, Target, based in Minneapolis, has set its starting hourly wage between $15 and $24 for employees at stores and distribution centers, depending on location. According to company spokesman Brian Harper-Tibaldo, the average hourly wage for a Target store worker exceeds $18.

As these changes unfold, they signal a growing focus on worker compensation and health benefits amid a competitive labor market in the retail sector.