Amazon to Spend $1 Billion on Wage Hikes and Health Care Savings for U.S. Employees

Amazon has announced a $1 billion investment aimed at raising wages and making health care more affordable for its U.S. fulfillment and transportation employees. The move comes as America’s largest employers, including Walmart and Target, continue to adjust pay scales and benefits amid increasing pressure from unions, regulators, and a competitive labor market.

Wage Hike for Fulfillment and Transportation Staff

The Seattle-based e-commerce giant said on Wednesday that the average pay for its U.S. fulfillment and transportation workers will rise to over $23 per hour.

• Some of Amazon’s longest-serving employees will see a wage increase ranging between $1.10 and $1.90 per hour.

• On average, full-time employees will earn an additional $1,600 annually as a result of the wage hike.

With this change, Amazon continues to position itself as one of the higher-paying employers in the logistics and warehousing sector.

Lower Health Care Costs for Workers

Alongside wage increases, Amazon is also introducing significant reductions in health care costs for employees:

• Starting next year, the cost of its entry-level health care plan will drop to $5 per week.

• Co-pays will also be reduced to $5, covering primary care, mental health, and most non-specialist visits.

• Amazon highlighted that this will mean a 34% reduction in weekly contributions and an 87% reduction in co-pays for employees under the basic plan.

This step underscores Amazon’s attempt to improve worker welfare, particularly for those relying on its most affordable health coverage options.

Workforce and Union Pressure

Amazon currently employs 1.5 million workers worldwide, making it one of the largest employers globally.

In December 2024, seven Amazon facilities staged strikes organized by the Teamsters union, demanding a comprehensive labor agreement during the peak holiday season. That same month, Amazon reached a settlement with the Occupational Safety and Health Administration (OSHA) after allegations of hazardous working conditions at its warehouses.

The settlement required the company to implement corporate-wide ergonomic measures, following claims that employees faced musculoskeletal injuries, particularly lower back issues.

How Competitors Stack Up

Amazon’s announcement comes at a time when other major U.S. retailers have also raised wages to retain talent.

• Walmart, the largest private employer in the U.S., revealed in January 2024 that average wages for hourly workers had risen above $18 per hour, up from $17.50. This increase was partly due to the introduction of higher-paying roles in Auto Care Centers. In 2023, Walmart had already raised starting wages to between $14 and $19 per hour, compared with the earlier range of $12 to $18 depending on location.

• Target pays starting wages ranging from $15 to $24 per hour, depending on the location of its stores and distribution centers. According to company spokesperson Brian Harper-Tibaldo, the average wage for Target store employees exceeds $18 per hour.

By raising its average hourly pay to $23, Amazon positions itself well above its major retail rivals in terms of base wages.

Conclusion

Amazon’s $1 billion investment in higher wages and lower health care costs reflects the company’s ongoing efforts to address workforce concerns while staying ahead in a competitive labor market.

With unions applying pressure, regulators monitoring workplace safety, and competitors like Walmart and Target raising wages, Amazon’s move sets a new benchmark in the retail and logistics sector. By increasing its average pay to more than $23 an hour and cutting health care costs by up to 87%, Amazon is signaling a stronger commitment to its U.S. workforce.

However, as labor disputes and regulatory scrutiny continue, the real test will be whether these changes translate into improved employee satisfaction and long-term retention.