Amazon hikes average U.S. starting pay to $18, hires for 125,000 jobs

© Reuters. FILE PHOTO: A worker assembles a box for delivery at the Amazon fulfillment center in Baltimore, Maryland, U.S., April 30, 2019. REUTERS/Clodagh Kilcoyne/File Photo

By Jeffrey Dastin

(Reuters) -Amazon.com Inc has increased its average starting wage in the United States to more than $18 an hour and plans to hire another 125,000 warehouse and transportation workers, an executive told Reuters.

The world’s largest online retailer has raised pay from an average of around $17 since May. In some locations, the company is giving signing bonuses of $3,000, said Dave Bozeman, vice president of Amazon (NASDAQ:AMZN) Delivery Services, or triple what the company offered four months ago.

The fatter paycheck, which Reuters was first to report, shows how big employers are desperate to draw workers in an increasingly tight U.S. labor market. Fewer Americans are seeking jobless claims https://www.reuters.com/business/us-weekly-jobless-claims-near-18-month-low-2021-09-09 just as openings have hit a record in the reopening economy.

Bozeman attributed Amazon's latest compensation increase to fierce competition. Amazon did not give exact figures, but a $1 raise on a $17-per-hour wage would amount to a hike of about 6%.

Amazon, now the second-biggest U.S. private employer, set a $15 an hour minimum wage in 2018. Walmart (NYSE:WMT) Inc recently touted https://www.reuters.com/business/retail-consumer/walmart-bumps-up-hourly-wages-565000-workers-by-1-ahead-holidays-2021-09-02 average hourly wages of $16.40, while Walgreens Boots Alliance (NASDAQ:WBA) Inc said it would raise its minimum https://www.reuters.com/business/walgreens-raise-minimum-hourly-wage-all-team-members-oct-2021-08-31 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.

He said Amazon would maintain its $15 an hour base pay. Benefits like funding college tuition for workers and starting wages as high as $22.50 in some areas distinguished the online retailer from peers, he said.

MEETING GROWTH

Amazon's news, after logistics hiring it announced in May and corporate recruiting it touted this month https://www.reuters.com/technology/exclusive-amazon-ceo-unveils-55000-tech-jobs-first-hiring-push-under-his-watch-2021-09-01, follows a stretch of increased scrutiny of its labor practices. A failed effort https://www.reuters.com/technology/amazons-win-union-fight-shows-harsh-realities-facing-labor-movement-2021-04-09 by some staff in Alabama this year to organize put on display Amazon's demanding warehouse work and aggressive anti-union stance. After that battle, then-CEO Jeff Bezos said the company needed a better vision for employees.

Andy Jassy, who succeeded Bezos, said in a CNBC interview that aired on Tuesday that the United States ought to raise the federal minimum wage.

Amazon is hiring workers to help run 100 logistics facilities launching this month in the United States, on top of more than 250 that opened earlier this year. Some workers will aid in Amazon's long-in-the-works effort to roll out one-day delivery for Prime loyalty club members.

"The 125,000 (warehouse workers) is really to help us keep up with our growth," said Bozeman, who added that only a minority of jobs were to address attrition. Amazon said it would fill the roles, which are full- and part-time, as quickly as possible but did not offer a timeline.

The company's external delivery service partners aim to hire another 50,000 workers by year-end, too, Amazon said.

Nicole Bilich, a human resources manager, said competitive pay has brought in applicants for her Stockton, California, warehouse, which Amazon plans to launch in October. But hiring 2,200 people in three to four months is no simple matter.

"The biggest challenge we have is really just the numbers of people we need," she said.