Amazon announced last week that it is hiring 250,000 employees for its holiday peak season, which it said is “good news for anyone looking for a job.” A new report, however, has found that warehouse workers in areas where Amazon is present make 30 percent below a county’s monthly average. When Amazon isn’t present, warehouse workers actually earn five percent above average pay, the report found.
The report, released by the National Employment Law Project (NELP) on Tuesday, stated that in the highest-earning 20 percent of U.S. counties, warehouse workers in counties with Amazon warehouses earn an average of $822 less per month than those in comparable counties with non-Amazon warehouses. Amazon’s presence in a high-earning county means that warehouse workers will earn an average of 30 percent less than the county’s average income, the report states.
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Motherboard has previously reported on how Amazon brings down wages in the warehousing sector. The company advertises that its jobs pay above federal minimum wage, but work in the physically-demanding warehousing industry typically pays even more. Amazon’s wages average $19 per hour—though, in its announcement last week, the company said that number would soon rise to $20.50—but reporting has shown that Amazon’s warehouse workers still struggle to pay their bills, and face grueling and ergonomically dangerous physical labor.
“Amazon has gotten away with such low pay for incredibly grueling work by taking advantage of people’s economic vulnerability at this moment in the U.S.,” said Irene Tung, a senior researcher and policy analyst at the NELP. “But with the vast resources that are at its disposal, Amazon could instead make a different choice, and decide to offer U.S. workers a lifeline out of precarity, insecurity, and this paycheck-to-paycheck existence.”
The newly-published report examined U.S. Census data on county-level earnings in the top 20th percentile of U.S. counties with warehouses, because Amazon “predominantly locates its warehouses in high-earnings counties.” Amazon operates fulfillment centers in 123 of the 641 high-earnings counties with warehouses in the U.S., the report said.
“The vast majority, 78 percent, of Amazon’s fulfillment centers are located in that kind of county,” Tung said in a phone call with Motherboard. “Amazon makes very deliberate choices around being able to have access to the kinds of consumer markets it’s targeting. These are places where workers in general have fairly high earnings—but warehouse workers are not making that much, compared to warehouse workers in other places in the U.S.”
Because Amazon can employ thousands of workers at a single fulfillment center, “Amazon employees’ earnings can factor heavily into average earnings data for warehouse workers in those counties and can provide insight into Amazon pay rates.”
The report states that “the average for warehouse worker earnings in high-earnings Amazon warehouse counties is 18 percent lower than in non-Amazon high-earnings counties—or roughly $822 less a month in pay.” After analyzing all of the over 1,500 counties with warehouses in the U.S., the report stated that warehouse workers in Amazon counties still earn an average of 12 percent less than those in non-Amazon counties.
“I think the most striking finding is the substantial difference between warehouse earnings in Amazon counties as compared to non-Amazon counties—and the 30 percent difference between warehouse worker earnings in Amazon counties and what the average earnings are in those counties,” Tung said.
“The picture that emerges from these data is that warehouse jobs are middle-income jobs or at least closer to middle-income jobs in most of the U.S., except in the counties where Amazon operates fulfillment centers,” the report stated.
Tung said that Amazon needs to reveal more information about its pay for workers, including breaking things down by race and gender. “This is what we see from the government data,” Tung said. “This is what we’ve been able to piece together from the government data. But what we need is for Amazon to disclose detailed data, broken down by race, by gender, by job title, so we can actually see what’s happening.”
A $1.50 raise announced by the company last week is the latest in an annual series of raises its warehouse workers have received, which it often implements before the holiday peak season. Each annual pay increase Amazon has implemented costs it around $1 billion over the course of the year, the company has said.
“While we weren’t given an opportunity to actually review this ‘report’, it appears to be another attempt by NELP to misrepresent the facts,” said Amazon spokesperson Sam Stephenson. “The truth is that most Amazon hourly employees are paid the same or more by Amazon than their previous employers, and a 2022 study by the U.S. Chamber of Commerce found that new fulfillment and distribution centers raise annual pay by 1.8% in local communities. This year, we’re investing $1.3 billion toward pay increases for our customer fulfillment and transportation employees, bringing the average pay for those roles to over $20.50 per hour, with some locations offering as much as $28 per hour.”
A week after this story was published, Stephenson sent Motherboard an updated statement on behalf of the company. “This ‘report’ is full of misleading, inaccurate and downright false claims created by playing a shell game with data,” Stephenson wrote in the statement. “The methodology is not up to the standards of best practices used by economists, and leads readers to a conclusion that isn’t true. The fact is that most Amazon hourly employees are paid the same or more by Amazon than their previous employers and the presence of Amazon fulfillment and distribution centers increase annual pay by an average of 1.8% in a community.”
The report lists recommendations for actions Amazon could take to “live up to its promise of high-quality employment,” including raising pay by at least 25 percent, improving its paid time off policies to give workers a minimum of 72 hours paid sick leave, and supporting workers’ right to organize.
“Amazon has said publicly so many times that they want to be a leader in compensation and in wages. It’s not rocket science to look at their books, their public filings, and see that they have plenty of money,” Tung said. “They can absolutely do this. Amazon started making these $1 raises each year in response to workers organizing. So public policymakers that are interested in seeing higher pay at Amazon should absolutely support workers’ efforts to organize. That will put pressure on Amazon to do the right thing.”
Correction: An earlier version of this article had the headline “Amazon Drags Down Wages for People Who Don’t Even Work For It, Report Finds.” This was based on a misreading of the report, which concluded that warehouse workers in counties where Amazon operates make less than the average, indicating Amazon’s pay is lower. Motherboard deeply regrets the error.
Update 10/02/23: This story has been updated with additional comment from Amazon.
