- Sen. Bernie Sanders and Amazon are engaged in a war of words over worker pay at the retail giant.
- Sanders has claimed that Amazon underpays its workers at the company’s fulfillment centres compared with the industry average, while Amazon argues that its pay is competitive.
- We compared Amazon salary estimates with pay in other industries.
Sen. Bernie Sanders and Amazon are engaged in a war of words over a significant question: Does the retail giant pay its employees enough?
Sanders has accused the company of underpaying workers at its massive fulfillment centres, where orders are processed and packaged. Amazon has said it pays its workers competitive salaries and fair wages.
So who’s right?
The answer ultimately comes down to whose wages you’re comparing Amazon’s with – and how you measure them.
In its rebuttal to Sanders, Amazon said that the average hourly wage for a fulfillment center worker including “cash, stock, and incentive bonuses” was $US15 an hour. Amazon did not, however, say how much fulfillment-center workers make in just salary, absent incentives. The company did not respond to a request for further comment.
Meanwhile, a study from the Institute for Local Self-Reliance cited by Sanders looked at 1,300 job listings for Amazon fulfillment-center positions and found that the median pay for those openings was $US12.32 an hour. This number does not include any bonuses or incentive pay and represents a low end estimate for their pay.
The company has also said that the salary for a median Amazon employee in the US is $US34,123, which shakes out to about $US16.41 an hour. It’s imprecise because it includes all US Amazon employees, but it offers a another point for comparison.
Amazon also likes to compare its average worker pay to “traditional retail stores,” aiding the company’s claim that its workers are paid “30% higher than employees’ pay in traditional retail stores.”
Looking at data from the Bureau of Labour Statistics on worker pay by occupation, we can parse how much Amazon employees earn compared with similar workers in other industries:
- According to BLS data, the median average hourly pay for a nonsupervisory retail worker at a general-merchandise store like Target or Walmart made $US12.63 an hour in 2017, or 18.8% less than what Amazon has said it pays fulfillment-center workers (including bonuses and stock options). The BLS data does include some bonuses, but does not stock options so that is not an apples-to-apples comparison.
- Using the ILSR study’s estimate, Amazon fulfillment-center employees make 2.5% less than traditional retail workers in big-box stores.
- Using the median US Amazon employee salary, the fulfillment-center workers make 30% more, in line with Amazon’s claim.
This appears to be the comparison Amazon is making when it refers to “traditional retailers,” but these workers are employed at brick-and-mortar retail locations, like a Walmart store.
Amazon fulfillment centres, by contrast, do not have storefronts and more closely mirror another BLS category: warehousing and storage. Workers in this category work in locations that do not make direct sales (like a fulfillment center) and that provide logistics for the delivery of goods (also like a fulfillment center):
- According to BLS data, nonsupervisory workers in this category made $US16.82 an hour in 2017, and those employed as stock clerks and order fillers made $US15.76 an hour.
- Using Amazon’s $US15-an-hour calculation, the typical warehousing worker made 12% more than a fulfillment-center employee, and the typical stock clerk made 5.1% more.
- Using the ILSR calculation, fulfillment-center workers made 36.5% less than all warehousing workers and 27.9% less than stock clerks.
- Using the median Amazon employee pay, the retailer’s workers made 2.4% less than warehousing workers and 4.1% more than stock clerks.
There is some debate where the Amazon fulfillment workers may fall category wise. Michael Mandel at the Progressive Policy Institute argued that fulfillment center workers are closer to traditional retail workers since they are doing small package delivery over larger bulk items despite not working in a storefront location.
The bottom line: Amazon workers most likely make above the industry average for workers in traditional big-box stores, but right in in line or somewhat less than their counterparts working in actual warehouses.
(Editor’s note: This post has been updated to reflect Amazon’s release of the median pay for workers in the US rather than median pay for global employees. All calculations are updated with the new figure.)
Business Insider Emails & Alerts
Site highlights each day to your inbox.