Amazon told employees on Wednesday that its warehouse and delivery workers will get a wage hike from $18 per hour to $19, according to CNBC.
According to the world's largest online retailer, they will implement the wage increase starting in October.
Depending on position and location, the workers at the warehouse of Amazon now earn between $16 and $26 per hour.
Amazon Hopes to Attract and Retain Workers With Wage Increase
With the wage hike, Amazon hopes to attract and retain workers in the company as U.S. labor market tightens, according to Reuters. This would help the retail giant particularly now that the peak season is approaching.
Because of the pay increase, the company is expected to spend roughly $1 billion over the next year for the pay hikes of the warehouse and delivery workers.
During the COVID-19 pandemic, there have been tensions between Amazon and its front-line workforce.
Over the past years, employees have requesting for wage increases, more paid time off, and adjustments to productivity expectations.
Earlier this month, the company expressed its plans to raise pay and benefits for "drivers employed by members of its contracted delivery network."
Together with the wage increase, the retail giant also said that employees will now be able to avail the expanded payday advance.
The payday advance lets employees access up to 70% of their eligible earned pay. This can be done anytime of the month.
Amazon Implements Wage Increase Amid Workers' Move to Unionize
Amazon made the move to increase the pay of its warehouse and delivery workers as some Amazon workers seek to unionize. The news also comes as the retail giant is heavily criticized regarding the working conditions in its warehouses.
According to CNET, workers at Amazon are seriously injured "at twice the rate of other warehouses." This is based on 2021 study.
In fact, the U.S. Department of Labor is investigating the company after four of its warehouse workers died in separate incidents this summer.
According to Amazon, injuries in the workplace have occurred partly due to the pandemic. With this ongoing problem on injured workers, tens of thousands of additional workers were hired by the company.
Complains were also raised by the injured warehouse workers regarding difficulties in getting benefits and care that supposedly covered by Amazon.
In the past years, the company is "battling soaring inflation." Moreover, it is facing high employee turnover because "workers are seeking higher wages to meet the rising cost of living."
As the quarter closed on June 30, Amazon recorded over 1.5 million full and part-time employees globally. A greater number of these workers are based in the United States.
Across the country, the company has nearly 900 fulfillment facilities. Meanwhile, Amazon executives are getting worried that the company will run out of people to hire because of its high turnover rate.
According to The Business Insider, there is no statement from Amazon yet whether all of its almost 750,000 warehouse employees in the U.S. will get a wage increase.
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