Workers pack and ship customer orders at the 750,000-square-foot Amazon fulfillment center on August 1, 2017 in Romeoville, Illinois. ( Scott Olson/Getty Images)
Amazon sent a letter to Sen. Bernie Sanders (I-Vt.) on Tuesday vowing that all of its hourly U.S. workers will be better off financially after its new pay policy goes into effect on November 1.
“All hourly operations and customer service employees will see an increase in their total compensation as a result of this announcement,” wrote Jay Carney, Amazon’s senior vice president for global corporate affairs, in a letter to Sanders obtained by The Washington Post.
Amazon, America’s second largest employer, announced last week that it would boost its minimum wage to $15 for all of its hourly workers who labor in fulfillment centers, return centers and other sites. But workers at some Amazon warehouses didn’t clap or cheer when they heard the news because the company simultaneously took away bonuses and stock grants. (Amazon chief executive Jeffrey P. Bezos also owns The Washington Post).
Many workers told The Washington Post, the New York Times, The Huffington Post and other outlets that they believed they would make less money under the new rules than they do now, prompting Sanders to ask Amazon to confirm that all employees would see an increase in total compensation after the changes take effect.
“Again, all hourly operations and customer service employees will seen an increase in their base pay, as well as in their total compensation,” Carney wrote. “We are also proud to continue to provide our industry-leading benefits, including comprehensive healthcare, up to 20 weeks of paid parental leave and our Career Choice program, which pre-pays 95 percent of associates' tuition for courses in high-demand fields.”
Carney said that the increase in the hourly wage “more than compensates" for the phase-out of incentive pay and stock grants, and reiterated that the company is eliminating these because workers want more “immediate and predictable” compensation.
Workers who have been with the company for several years are still trying to understand how Amazon is going to ensure they get more take home pay than they do now. “Total compensation” often refers to pay plus benefits and not necessarily the take home pay that most workers are focused on to get by. Employees who currently earn $14.01 or more were told they would receive a dollar pay rise, but as one worker at a Tennessee fulfillment center explained to The Washington Post, he currently earns about 8 percent extra a month in bonuses.
His base pay is around $14 an hour, and the extra bonus money for good performance would yield him another roughly $180 a month and even more during the peak holiday season from October to December. After the changes, he would only earn $160 extra a month from the dollar pay raise. Amazon is also stopping its practice of giving workers a quarter raise every six months, effectively creating a lower ceiling on how much veteran employees can earn.
He will also no longer receive stock grants, which vested after three years with the company and were a substantial benefit to long-term employees since the company’s stock is worth almost four times what it was in September 2015.
The worker, who asked not to be named out of fear of retribution, said he was “disappointed” and called this a “downturn of events.” He added that morale was “shot” among veteran employees.
Amazon told Sanders it is planning to do more outreach to help employees understand how the changes will impact them personally and how they will be better off.
Sanders, who berated Bezos repeatedly for underpaying his employees, praised Amazon after the minimum wage increase and said it “could well be a shot hear around the world” that causes other large companies to follow suit.
Amazon’s $15 pay is significantly above the typical retail pay in the United States, but it remains below median warehouse worker pay of $15.53 an hour, according to Labor Department data.