Amazon Raises Hourly Wage to $18 and Plans to Hire 125,000 More Employees

(Photo by WSJ)

[Asia Economy Reporter Yujin Cho] The world's largest e-commerce company, Amazon, is raising its average wage to $18 per hour. This move is aimed at addressing labor shortages and supply chain disruptions ahead of the holiday shopping season.

According to major foreign media including The Wall Street Journal (WSJ) on the 14th (local time), Amazon announced plans to increase wages and hire an additional 125,000 warehouse and transportation workers. Their average hourly wage is expected to reach $18.

In some regions, a signing bonus of $3,000 will be offered, and the average wage could be raised up to $22.50 per hour, foreign media reported.

Previously, Amazon had raised its minimum wage from $15 per hour in 2018 to $17 per hour last May.

This wage increase decision comes as labor shortages have intensified due to the COVID-19 pandemic, and as Amazon expands new facilities such as warehouses ahead of the year-end shopping peak.

Amazon opened more than 250 warehouses in the U.S. earlier this year and plans to open over 100 new logistics facilities this month alone. The additional workforce will be deployed for same-day delivery services for Amazon Prime members.

Earlier this month, Amazon also announced plans to hire 55,000 employees in its cloud computing division Amazon Web Services (AWS), Amazon Studios, advertising, and the broadband satellite project Kuiper.

Major U.S. companies are competing to offer benefits and signing bonuses to hire hourly workers amid increased employment demand due to economic recovery.

Many companies, including Walmart and Target, have already decided to offer wage increases, educational benefits, and signing bonuses to attract workers.

Earlier this month, Amazon also promised to cover college tuition costs, including books and fees, for 750,000 part-time workers across the U.S.

Dave Bozeman, Vice President of Amazon Delivery Service, said, "Raising the average wage to $18 per hour in regions with tight labor markets will help alleviate labor shortages," adding, "We believe competitive wages must be paid in areas where recruiting part-time workers is highly competitive."