Employment has become Amazon’s most potent political vulnerability as well as its most important political message. The shift to online shopping has led many retailers like Toys “R” Us and Sears to shut down and layoff staff in cities and towns across the country, while jobs at the warehouses and sorting centers that move Amazon’s goods have boomed. It employs about 575,000 worldwide, up more than 50 percent in the past year alone, and its growth has followed the divergent paths of the economy, with highly-skillled tech workers in Seattle making well over $100,000 and warehouse employees earning lower wages.
Even as Amazon pushes toward using more robots at its warehouses and expanding experiments like Amazon Go, its cashierless convenience stores, it still has a huge need for workers, particularly as the holiday season approaches. With the United States unemployment rate below 4 percent, the tight labor market has made it harder to attract the workers it and other retailers it needs.
The smaller supply of prospective workers has slowly been pushing wages higher. The average wage for retail sales people across the United States is $13.20 an hour, according to federal data. For all retail workers, including sales people, cashiers and supervisors, the average wage is $18.85.
Last year Target announced it would raise minimum pay to $15 an hour by 2020, and Costco has raised its starting pay to at least $14 per hour. In January, Walmart said it was raising starting wages for employees to $11 after the new tax law passed, though critics noted that it was laying off workers as it tried to quietly close 63 Sam’s Club stores.
“At the moment in the United States unemployment is pretty low, and Amazon may be struggling to recruit and retain employees,” said Alan Manning, an economics professor at London School of Economics who has studied minimum wage policies. “It’s also a bit of good publicity.”
Indeed, less than an hour after the announcement on Tuesday, Dave Clark, Amazon’s senior vice president in charge of operations, posted a video on Twitter of employees at a fulfillment center in Southern California cheering as he broke the news to them.