Amazon hikes hourly pay for front-line employees

Amazon (NASDAQ:AMZN) has raised the hourly pay for front-line employees by another $1.50 per hour, resulting in a $2.2B investment across the network, the company’s largest so far.

As part of an annual review, the pay hike will raise the average hourly wages for fulfillment and transportation workers to $22, with the average total compensation rising to $29 per hour including the value of elected benefits. For employees that work a 40-hour week, the pay hike translates into an increased annual salary of $3K. In addition to higher pay, the company is also adding a free Prime membership to the benefits package.

The increased pay comes as Amazon (AMZN) warehouse employees across the country struggle to unionize. As recently as Monday this week, hundreds of Amazon (AMZN) drivers in Queens, New York joined the Teamsters Union, demanding that the company recognize the affiliation and negotiate a contract with the powerful union.

Efforts by the company to thwart the encroachment of organized labor have been modestly successful, as the Teamsters were still able to gain a toehold by an affiliation with the newly formed Amazon Labor Union in Staten Island, NY. The union is fighting for higher wages, consistent working hours, and changes to the company’s speed and safety standards, but still has not been able to organize outside of Staten Island.

Amazon (AMZN) has argued that unionizing fulfillment centers will only stifle efficiencies, lead to “less empowered” employees, and would extend any future negotiations unnecessarily. A recent study cited by The Guardian showed that after winning union elections, 52% of employees were without a contract a year later, and 37% were without a contract after two years.

By raising hourly wages, Amazon (AMZN) likely hopes to show their employees they can accomplish more without the help of a labor union.