On Tuesday, October 2, Amazon announced that it would raise its internal minimum hourly wage for US employees, including part-time workers and those hired through temporary agencies, to $15 an hour. This includes workers at the company’s warehouses or “fulfillment centers,” as it calls them, in addition to store employees at Whole Foods, which Amazon acquired last year. The e-commerce giant also said it planned to lobby the US government to raise the federal minimum wage from its current hourly rate of $7.25, last updated in 2009, the New York Times reported:
The new wages will apply to more than 250,000 Amazon employees, including those at the grocery chain Whole Foods, as well as the more than 100,000 seasonal employees it plans to hire for the holiday season. The change will not apply to contract workers. It goes into effect on Nov. 1. “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Amazon’s chief executive, Jeff Bezos, said in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”
The move came amid growing pressure on Amazon from the media and politicians regarding its pay practices and the work conditions of its lowest-paid employees, particularly those at its warehouses or “fulfillment centers.” Vermont Senator and former presidential candidate Bernie Sanders has been an outspoken critic of Amazon’s CEO Jeff Bezos, who is currently estimated to be the wealthiest individual in the world, citing news reports that large numbers of Amazon’s low-wage employees were dependent on public assistance. Sanders and California congressman Ro Khanna have been pushing legislation that would require companies to compensate the federal government for the cost of public assistance benefits received by their employees, including food stamps, Medicaid, and public housing.
The next day, however, Bloomberg reported that Amazon was cutting monthly bonuses and stock awards for hourly employees to help offset the costs of the minimum wage hike. Still, the company insists that these workers’ total compensation is rising:
The British supermarket chain Tesco is facing a massive pay discrimination claim from its mostly female shop floor workers, asserting that they should receive wages equal to those of the mostly male employees who perform similar work at the company’s distribution centers. The law firm Leigh Day is taking legal action on behalf of around 100 shop assistants, but the class action could affect as many as 200,000 workers, the Guardian reports:
Tesco warehouse staff earn from about £8.50 an hour up to more than £11 an hour while store staff earn about £8 an hour in basic pay, according to the claim. The disparity could mean a full-time distribution worker earning over £5,000 a year more than store-based staff.
The case follows similar actions against Asda and Sainsbury’s which are working their way through the employment tribunal process. Nearly 20,000 people are involved in the Asda case, where the latest ruling backed the shopworkers’ right to compare their jobs to employees – mainly men – working in distribution centres. Asda is due to appeal against that ruling at the court of appeal in October. About 1,000 workers are involved in the Sainsbury’s action.
An employment tribunal ruling against Tesco could cost the company as much as £4 billion, or £20,000 in back pay per employee. Leigh Day intends to argue that the pay discrepancy reflects implicit discrimination against store workers and other jobs traditionally held by women. The case will hinge on the question of whether the warehouse employees’ work is in fact more valuable to the company than that of the shop workers, one economist tells CNN Money:
Corporate recruiting efforts are already in full swing to make sure the shelves are stocked during this year’s holiday season. Jennifer Smith of the Wall Street Journal reports that some US companies initially posted holiday openings as early as July, with many anticipating an increased need for warehouse and fulfillment workers.
With unemployment at its lowest in years, businesses have been forced to up the ante for seasonal workers, increasing wages, offering greater flexibility, and even transportation support. Smith reports that Macy’s is hiring 20 percent more seasonal workers than last year, as is XPO Logistics, a company with numerous e-commerce clients.
The fact that warehouse and logistics workers are the primary focus of hiring is indicative of increased online orders and declining in-store sales. The Journal reported that online retail sales rose 13 percent in November and December of 2016 while department stores saw a 7 percent drop in sales.
Warehouse hiring has gone up 31,000 over the past year and accounted for 951,000 jobs in August, meaning wages will likely to continue to grow given the shift in retail operations from in-store labor to fulfillment and facilities. Smith cites data from logistics staffing firm ProLogistix showing that the entry-level pay for warehouse workers is expected to be $13.68, a 10 percent increase from non-peak wages and a 5 percent increase from last year.
Amazon's Dupont, WA fulfillment center (Christina Crea/JBLM PAO/Flickr/PD
Many observers of technology trends fear that robots will displace human workers on a massive scale, but more optimistic voices contend that the ongoing revolution in workplace automation will create many more jobs than it destroys. Amazon’s experience is a point in the optimists’ favor: Even as the online retail giant has invested extensively in its robot workforce, it is also rapidly expanding its human workforce. In January, Amazon announced plans to hire 100,000 more employees in the US by mid-2018, which would grow its workforce by over 50 percent to more than 280,000 employees.
Six months later, the company is on its way to meeting that goal, GeekWire’s Nat Levy reports, pointing to Amazon’s latest quarterly earnings statement showing that it added 31,000 employees worldwide in the last quarter, bringing its total global workforce to 382,400 people:
Amazon reports its headcount as part of its quarterly earnings statements, and so far in 2017, Amazon has hired about 41,000 people. In the last 12 months it has added 113,500 people worldwide. For perspective, Amazon’s global workforce is roughly equivalent to the population of Cleveland, and it has added approximately a Billings, Mont., worth of people in the last year. All this hiring doesn’t mean Amazon is slowing down. On its website, the company is listing more than 19,800 open positions.
In fact, Amazon is looking to hire another 50,000 employees in one massive day of job fairs next week, Levy’s colleague Taylor Soper noted earlier this week: