A Good Living: Amazon Can and Must Make a Middle-Income Livelihood Possible for the People Who Work in Its Warehouses

Executive Summary

Amazon directly employs over a million people in the U.S.[i] It is now the second largest private-sector employer and the largest warehouse employer in the country.[ii] As such, Amazon has tremendous power to improve the standard of living for many in the U.S., including for the Black workers on whom it relies disproportionately for its front-line operations, and for Black women in particular, who make up the largest group of front-line workers at the company.[iii]

While Amazon has repeatedly represented itself as a model employer paying high wages, Amazon workers across the U.S. have increasingly spoken out about inadequate pay and called for the company to raise wages.[iv]

In this report, we marshal the latest data to help address two primary questions. First, how does Amazon’s pay compare to other warehouse employers? And second, how far is Amazon’s warehouse pay from middle income-compensation in the places where it operates?

Our analysis suggests that the company’s pay is inadequate compared to other warehouse employers and insufficient for workers to approach even average earnings in the counties where they work. We find that while Amazon tends to operate in higher-earnings counties, warehouse workers in Amazon counties actually take home less each month on average than their counterparts in other U.S. counties. This difference is even starker when Amazon counties are measured against other high-earnings counties with warehouses. We also find that this was not the case before Amazon arrived in those counties, suggesting that Amazon’s presence has substantially shifted warehouse earnings lower in the counties where it operates.

Examining the latest available Census data on county-level earnings, we have two major groups of findings.[v] They are:

1. Comparing counties with and without Amazon fulfillment centers suggests that Amazon pays less than other warehouse employers.[vi]
   • Amazon predominately locates its warehouses in high-earnings counties. Seventy-eight percent of counties with Amazon fulfillment centers are in the top 20th percentile of U.S. counties with warehouses with respect to average earnings for all workers in all industries.
   • When measured against other comparable U.S. counties with no Amazon fulfillment centers, high-earnings Amazon counties show substantially lower pay for warehouse workers. On average, warehouse workers in high-earnings Amazon counties make 18 percent less—$822 less a month—than warehouse workers in non-Amazon counties that are similar with respect to average earnings for all workers in all industries.
   • Amazon’s presence widens the gap between warehouse worker earnings and middle-income earnings. In the high-earnings counties where Amazon operates fulfillment centers, warehouse workers’ earnings are substantially less than average earnings for all workers in those same counties—a difference of 30 percent.[vii] By contrast, in comparable non-Amazon counties, warehouse workers make closer to the average for all workers in those same counties, about 8 percent less.

2. Comparing warehouse earnings before and after Amazon’s arrival likewise suggests that Amazon pays less than other warehouse employers, making middle-income earnings further out of reach for warehouse workers.[viii]
   • Before Amazon’s arrival, warehouse worker earnings were on par with other warehouse counties. In 2005, before Amazon had begun operating fulfillment centers in the counties in our analysis, earnings for warehouse workers in those future Amazon counties were similar to the earnings for warehouse workers in other comparable counties, suggesting that Amazon pays less than other warehouse employers.
   • Before Amazon’s arrival, earnings were closer to middle-income. In 2005, before Amazon established fulfillment centers in the counties that now host them, warehouse workers in high-earnings Amazon counties earned much closer to the average for all workers in those counties—10 percent less, compared to 30 percent less currently as mentioned above. By contrast, other comparable counties saw little change (negative 8 percent on average in both 2005 and 2022), suggesting that Amazon’s arrival had a pivotal effect on warehouse worker earnings where it set up shop.

Amazon’s public filings show that it can easily afford to pay more if it prioritizes fair pay for its workers over profit, acquisitions, real estate purchases, and global expansion.

Examining Amazon’s public filings as detailed below shows that by using just one tenth of its annual profit, Amazon could pay each of its U.S. front-line workers an additional $2,225 a year, or nearly $200 more per month.[ix] In addition, the amount that Amazon spent on acquiring other companies in 2022 and 2023 could fund a $16,000 one-time bonus for each of its U.S. front-line workers.[x] What’s more, reducing the money the company spends on expanding its real estate holdings by just a tiny fraction annually would likewise free up money that could provide thousands of additional dollars in pay per year to each of its U.S. front-line workers.[xi] Finally, with one quarter of the money it has spent on average each year since 2010 to expand operations in Europe, Amazon could increase pay for each of its U.S. front-line workers by $4,268 each year.[xii] Taking measures like these would profoundly improve the standard of living for hundreds of thousands of people in the U.S.

We conclude with a series of recommendations aimed at ensuring that Amazon lives up to its promise of being a leader in worker compensation.[xiii] Given Amazon’s role as a large-scale employer throughout the U.S., particularly of Black and Latinx workers, achieving a better livelihood for Amazon workers is a crucial step towards advancing racial justice and building a good jobs economy for all in this country.

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Endnotes

[i] Jason Del Rey, “The Amazonification of the American workforce,” Vox, April 21, 2022, https://www.vox.com/the-highlight/22977660/amazon-warehouses-work-injuries-retail-labor; Todd Bishop, “Analysis: New jobs numbers show where Amazon has been adding and shedding U.S. workers,” GeekWire, April 27, 2023, https://www.geekwire.com/2023/new-numbers-show-where-amazon-has-been-adding-and-shedding-u-s-workers/

[ii] Frank Holmes, Top 10 Largest Fortune 500 Employers In The U.S., Forbes, October 26, 2022, https://www.forbes.com/sites/greatspeculations/2022/10/26/top-10-largest-fortune-500-employers-in-the-us/?sh=b3132397e36e; Amazon.com, Inc. Consolidated EEO-Report, 2021, https://assets.aboutamazon.com/ff/dc/30bf8e3d41c7b250651f337a29c7/2021-amazon-consolidated-eeo-1-report-2p.pdf; Occupational Health and Safety Administration, Establishment Specific Injury and Illness Data (NAICS 493110)

[iii] Amazon.com, Consolidated EEO-Report, 2021, https://assets.aboutamazon.com/ff/dc/30bf8e3d41c7b250651f337a29c7/2021-amazon-consolidated-eeo-1-report-2p.pdf;

[iv] Aboutamazon.com, Our workplace, https://www.aboutamazon.com/workplace; Jason Del Rey, “Jeff Bezos seems to be reckoning with his legacy in the wake of the Amazon union drive,” Vox, April 15, 2021, https://www.vox.com/recode/22385644/jeff-bezos-amazon-warehouse-work-union-shareholder-letter-2021; Katherine Long, “Leaked documents show Amazon workers are up in arms over the company’s new raises,” Business Insider, Oct 6, 2022, https://www.businessinsider.com/amazon-warehouse-raises-workers-leaked-documents-2022-10; Luis Feliz Leon, “Michigan Amazon Workers Stage Largest Delivery Station Strike Yet”, Labor Notes, July 17, 2023, https://labornotes.org/2023/07/michigan-amazon-workers-stage-largest-delivery-station-strike-yet; Annika Merrilees, “St. Peters Amazon employees call for 10 dollar an hour raise and better working conditions,” St. Louis Dispatch, September 15, 2022, https://www.stltoday.com/news/local/metro/st-peters-amazon-employees-call-for-10-an-hour-raises-better-working-conditions/article_664384f5-5bd2-59be-9e47-74ca10e93d66.html; Amanda Andrews, “’No justice, no work’: Amazon workers demand safety and fair pay,” Georgia Public Radio News, October 20, 2022, https://www.gpb.org/news/2022/10/20/no-justice-no-work-amazon-workers-demand-safety-and-fair-pay; Isobel Asher Hamilton, “Amazon workers in 3 US warehouses staged walkouts as they seek $3 raises and 20-minute breaks, reports,” Business Insider, March 17, 2022, https://www.businessinsider.com/amazon-workers-stage-walkouts-new-york-maryland-wage-increases-2022-3; Brian Whitehead, “Amazon employees strike in San Bernardino, demand $5 hourly pay raise,” San Bernadino Sun, https://www.sbsun.com/2022/10/14/amazon-employees-strike-in-san-bernardino-demand-5-hourly-pay-raise/; Luis Feliz Leon, “Wage Gains at UPS Have Amazon Workers Demanding More,” Labor Notes, August 3, 2023, https://labornotes.org/2023/08/wage-gains-ups-have-amazon-workers-demanding-more.

[v] Unless otherwise noted, all of the findings in this report are based on a NELP analysis of earnings data from the U.S. Census Bureau’s Quarterly Workforce Indicators for Q1 2022 and Q1 2005 and self-reporting by Amazon about its warehousing establishments to the Occupational Health and Safety Administration.

[vi] See findings detailed below and in Section II of this report.

[vii] The concept of “middle-income” can be measured in a variety of ways, usually based on median household income, household size and geography. See https://www.brookings.edu/articles/a-dozen-ways-to-be-middle-class/. For U.S. warehouse workers, median household income and size data are not publicly available for counties or specific companies. In our analysis, we use average county earnings for all workers in their county of employment as a proxy for middle-income.

[viii] See findings detailed below and in Section II of this report.

[ix] Amazon.com, Inc., Form-10K – for the fiscal year ended December 31, 2022, https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7ee-05f7-419d-9ce8-186de4c96e25.pdf

[x] Amazon.com, Inc., Form-10K – for the fiscal year ended December 31, 2022, https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7ee-05f7-419d-9ce8-186de4c96e25.pdf; Amazon.com, Inc. Consolidated EEO-Report, 2021, https://assets.aboutamazon.com/ff/dc/30bf8e3d41c7b250651f337a29c7/2021-amazon-consolidated-eeo-1-report-2p.pdf.

[xi] Amazon.com, Inc., Form-10K – for the fiscal year ended December 31, 2022, https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7ee-05f7-419d-9ce8-186de4c96e25.pdf; Amazon.com, Inc. Consolidated EEO-Report, 2021, https://assets.aboutamazon.com/ff/dc/30bf8e3d41c7b250651f337a29c7/2021-amazon-consolidated-eeo-1-report-2p.pdf.

[xii] Amazon.com, Inc., Form-10K – for the fiscal year ended December 31, 2022, https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7ee-05f7-419d-9ce8-186de4c96e25.pdf; Amazon.com, Inc. Consolidated EEO-Report, 2021, https://assets.aboutamazon.com/ff/dc/30bf8e3d41c7b250651f337a29c7/2021-amazon-consolidated-eeo-1-report-2p.pdf.

[xiii] Aboutamazon.com, Our Workplace, https://www.aboutamazon.com/workplace (accessed September 20, 2023); Aboutamazon.com, “Why Amazon Supports a $15 Minimum Wage”, https://www.aboutamazon.com/impact/economy/15-minimum-wage (accessed September 20, 2023); Aboutamazon.com, ”Amazon is hiring 250,000 employees for the holidays, and making its largest ever annual investment in U.S. hourly wages,” September 18, 2022, https://www.aboutamazon.com/news/workplace/amazon-hiring-seasonal-holiday-employees