Business
Amazon has some good news for its employees on minimum wage
Amazon employs hundreds of thousands of people in warehouses and delivery operations across the United States. On September 16, it told them their pay is going up.
The company announced a $1-per-hour raise for eligible U.S. core operations employees, bringing the minimum starting wage for full-time roles to $20 an hour, according to Amazon’s press release. Average hourly pay for core operations workers rises to nearly $24. With benefits factored in, average total compensation exceeds $32 an hour. Amazon said the minimum starting wage has now risen more than 17% over the past three years.
What the $1.5 billion investment actually covers
Amazon said the pay increases will cost more than $1.5 billion. The investment covers workers involved in fulfilling and delivering customer orders, including fulfillment-center workers and delivery drivers. Amazon did not describe it as a companywide raise for every employee.
Udit Madan, Amazon’s senior vice president of Worldwide Operations, said the company evaluates pay and benefits annually. “I often hear that they appreciate a good paycheck, but also really value the full range of benefits that we offer, which together help them support their families and grow in the long run,” he wrote in a blog post announcing the changes.
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For a full-time employee working 40 hours a week year-round, the $1-per-hour increase works out to about $2,080 more annually before taxes. The $1.5 billion figure is a significant outlay in absolute terms and comes to roughly 0.06% of Amazon’s current market capitalization of about $2.68 trillion.
The federal minimum wage is $7.25 and Congress has not raised it since 2009. Amazon’s new $20 floor is nearly triple that. Many states have passed their own higher minimums, some above $15, so Amazon’s starting wage lands above most state floors too. The company says it sets pay by looking at what it takes to fill and keep positions in its busiest markets.
What new benefits Amazon is adding
The pay increase comes alongside a new banking benefit and grocery discounts, both effective October 1, 2026.
Amazon is giving employees access to Day 1 Financial, a lifetime membership in First Tech Federal Credit Union. Qualified employees and their families keep the membership for life. Access begins rolling out in late 2026 and is expected to be broadly available in 2027. The credit union is federally insured by the National Credit Union Administration.
On groceries, Amazon employees will get 10% off eligible fresh groceries and everyday essentials on Amazon.com and Whole Foods Market online, and 20% off in-store at Whole Foods Market, according to Amazon. The discount is uncapped and can be stacked with existing Prime member discounts.
Amazon already offers full-time employees free Prime membership, prepaid education up to $5,250 annually through its Career Choice program, health-care coverage from day one, a 401(k) with company match and paid parental leave.
How workers are reacting to the news
The reaction among some Amazon workers has been mixed. On a Reddit forum for Amazon employees, several comments questioned whether the Whole Foods grocery discount would amount to meaningful savings in practice, given the chain’s reputation for higher prices than typical grocery stores. One commenter said the 20% discount might bring Whole Foods prices roughly in line with a regular supermarket.
The wage increase shows up in every paycheck. The Whole Foods discount only helps workers who actually shop there. Many Amazon fulfillment-center employees are in suburban and rural areas where Whole Foods locations are sparse. A 20% discount on a grocery chain that runs 30% to 40% above average market prices still leaves workers paying more than they would at a standard supermarket.
Yahoo Finance reported the Reddit comments were highlighted by Amazon itself in materials it shared with media, framing the employee skepticism as good-natured.
The banking benefit drew a more positive response. Access to a federally insured credit union with lifetime membership is a tangible financial tool, particularly for workers who are unbanked or underbanked. About 4.2% of U.S. households have no bank account, according to the FDIC, and a larger share use high-fee check-cashing or payday lending services. A credit union membership with low fees and competitive rates addresses a real gap for that group.
What this means for Amazon and its workforce
Hourly workers have more options than they did five years ago. Walmart’s average U.S. frontline associate wage now tops $18 an hour, according to Walmart. Target, Costco and other large retailers have done the same. Amazon warehouse jobs have a reputation for fast pace and physical demand, so the pay premium has to justify that to workers who could go elsewhere.
The company has also faced years of criticism over warehouse working conditions, injury rates and worker organizing efforts. Higher pay addresses one dimension of employee concerns but does not resolve questions about workload, pace of work or scheduling flexibility that have driven some of the tension between Amazon and its workers.
For investors, the $1.5 billion figure is worth context. Amazon generated more than $100 billion in operating cash flow in its most recent fiscal year, according to Yahoo Finance. The wage investment is meaningful for the workers receiving it, but manageable at the company’s scale.
Labor costs are one of the largest line items in Amazon’s operations. The company has been investing heavily in robotics and automation across its fulfillment network, partly to offset rising labor expenses over time. Higher wages make the automation investment look more attractive from a cost standpoint, since it raises the threshold at which machines become cheaper than people. Amazon will report how labor costs are trending when it releases its next quarterly earnings results.
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This story was originally published by TheStreet on Sep 20, 2026, where it first appeared in the Employment section. Add TheStreet as a Preferred Source by clicking here.
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