Amazon boosts worker pay ahead of the holidays, but it’s not enough to beat the inflation Grinch
Prime time… for a raise. Amazon will bump average starting pay for delivery and warehouse workers from $18/hour to more than $19/hour. The Zon says the hike will cost nearly $1B over the next year. Though small, the boost could help attract workers ahead of the holidays (which, FYI, are expected to be less frantic than last year as demand softens). It’s not the only one:
- Target: In February, Target announced it would set a new starting range of $15/hour to $24/hour. It’s trying to hire 100K workers this holiday season (less than last year).
- Walmart: Last September, Walmart lifted its minimum store wage from $11/hour to $12/hour. This season, Walmart wants to hire just 40K workers (vs. 150K last year).
- In context: Real hourly earnings (adjusted for inflation) have fallen 2.8%, and an estimated 70% of surveyed workers are looking for extra gigs to afford high prices.
Pay to keep unions away… Tensions have been rising between Amazon and its front-line workers. In April, Amazon’s Staten Island warehouse became its first US facility to unionize. Amazon tried to reverse the vote and has actively fought union organization efforts, but pumping pay could be a more subtle approach.
America’s retailers set the standard… of America’s wages. After the federal government, Walmart is the country's largest employer with 2.3M global workers, followed by Amazon with 1.5M. With a federal minimum wage of just $7.25, retail behemoths boast major influence over America’s paychecks. A boost from Amazon could pressure other employers to keep up. But this pay hike won't come close to matching inflation, with prices up 8.3% in August from a year earlier.