Amazon.com Inc.’s impact on retail stretches well beyond stores: Its warehouses bring above-minimum wage jobs with benefits, giving it an advantage in attracting workers.
Amazon held a hiring event called Amazon Jobs Day last week as part of its effort to fill positions at 12 fulfillment centers around the country. The retailer promoted the event with, among other things, a dedicated website, a social media hashtag and Facebook Live videos.
In most locations, job applicants also were offered the chance to tour the fulfillment centers, watch existing Amazon workers in action and, Amazon says, “see the magic behind the Amazon smile.” At two new locations—Buffalo, N.Y., and Oklahoma City, Okla.—applications were accepted off-site. Prior to the event, Amazon said it planned to make thousands of on-the-spot job offers to qualified candidates.
The wages at Amazon’s fulfillment centers significantly exceed federal and state minimum wages. At least as important: The jobs come with benefits. Employees who work more than 20 hours per week receive life and disability insurance, dental and vision insurance with premiums paid in full by Amazon, partial funding of medical insurance, a 401(k) plan, paid time off and an employee discount.
In addition, full-time and part-time hourly employees are eligible for a program called Career Choice, which prepays 95% of tuition for courses “related to in-demand fields,” even if the skills are not relevant to a future career at Amazon. More than 10,000 employees have participated in Career Choice, Amazon says. Amazon is No. 1 in the Internet Retailer 2017 Top 1000.
Examples of Amazon job openings—each of which requires only a high-school diploma or equivalent—include:
- Full-time fulfillment center associate in Romeoville, Ill., are listed at $13 to $14 per hour, which is up to about 60.7% above the Illinois minimum wage of $8.25 per hour.
- Full-time warehouse associate in Hebron, Ky., at $12.25 per hour. That’s 69.0% above the state’s minimum wage, which matches the federal minimum wage of $7.25 an hour.
- Full-time fulfillment associate in Fall River, Mass., is listed as paying $12.75 to $13.25 per hour. The high end of that range is 20.5% above the state’s $11 minimum wage.
- Full-time fulfillment associate in Baltimore, Md., is listed at $13 to $14 per hour. The high end of that range is 51.4% above Maryland’s $9.25 per hour minimum wage.
Those starting wages are higher than mean hourly wages for similar jobs reported by the Bureau of Labor Statistics (BLS) in May 2016, the most recent period for which data is available. According to BLS data, hand packers and packagers in the United States earn a mean hourly wage of $11.74. The mean hourly wage for stock clerks and order fillers is $12.82.
The current federal minimum wage is $7.25 per hour, and a listing of state minimum wages, maintained by the National Conference of State Legislatures, is available here.
Benefits give Amazon an edge
“I would consider them good entry-level positions,” Nicole Smith, chief economist at the Georgetown University Center on Education and the Workforce, says of the new Amazon jobs.
The benefits, Smith says, are unusual for jobs that require only a high-school diploma, and that should give Amazon an edge in its recruiting. In particular, Smith is impressed with Amazon’s education-related benefits, which could help the company’s entry-level workers move to better careers in the future.
“For high-school jobs, the bottom has fallen out of that market,” Smith says. In the future, prospects for workers with only a high-school diploma will only get worse, she says, so if an employer offers educational assistance, workers should take advantage of that.
Warehouse workers in the United States take home about $12.58 per hour on average, according to PayScale Inc., which maintains a database of more than 54 million salary profiles across 365 industries. Nearly a third of U.S. warehouse workers lack any form of medical coverage. More than half have medical insurance and slightly more than half have dental coverage.
Is e-commerce killing retail jobs? It’s complicated.
E-commerce has had a negative impact on traditional retail jobs, but the retail sector continues to be a major source of jobs in the U.S., says Will Markow, manager of client strategy and analytics at Burning Glass Technologies, an analytics software company that analyzes trends in the labor market.
“The common narrative is that all the retail jobs are being swallowed by Amazon and the other online retailers,” Markow says. While the long-term prospects for traditional retail employment are not good, the true picture is more nuanced.
In 2016, Burning Glass research shows there were more than 2.4 million job postings in the retail sector, second only to healthcare, he says. However, a Burning Glass analysis finds that the annual number of postings for traditional bricks-and-mortar retail roles (including retail sales associates, cashiers and supervisors) decreased 1% from 2014 to 2016. Because job postings for workers outside of retail are increasing, the seemingly small decline in retail indicates significant job losses in that sector, Markow says.
Demand for e-commerce skills in retail grew 32% between 2014 and 2016, but those jobs represent only a small number of job postings. In 2016, Burning Glass found 910,792 job postings for traditional retail jobs, but only 25,455 for retail jobs requiring e-commerce skills. Not only that, the e-commerce jobs require skills that many traditional retail employees don’t have.
For example, job postings for e-commerce analysts grew 27% between 2014 and 2016 to 2,629 from 2,069. But e-commerce analysts typically have a bachelor’s degree or higher in a subject like business management, systems management or online marketing. E-commerce analysts measure, analyze and report on changes in online sales. Such an employee also might also track such things as a company’s web analytics, search engine ranking and advertising campaign results.
The silver lining for retail workers is that retail workers’ skills have value in a range of occupations that have a shortage of qualified applicants, Markow says. In-demand jobs they could be well-suited for include sales associate, sales representative, bank teller, personal banker and pharmacy aide.
An analysis of BLS data published in March by the Progressive Policy Institute (PPI), a left-leaning think tank, finds that the shift to e-commerce has been good for employment and wages.
“We found that the e-commerce sector added 355,000 jobs from 2007 to 2016—more than enough to compensate for the 51,000 jobs lost in the general retail sector,” the PPI analysis says.
The institute also finds that the shift to digital shopping is leading to higher wages. Hourly wages for employees of online retailers averaged $21.13 per hour, about 27% higher than the $16.65 earned for store-based retailers that directly compete with e-commerce, PPI says.
For production and nonsupervisory workers, average hourly earnings were 26% higher in e-commerce compared with store-based retailers—$17.40 per hour vs. $13.82 per hour.
Amazon has 140 fulfillment centers now open in the U.S. alone.