Amazon increases average US starting pay to $18 and plans to add 125,000 jobs

The company is also giving signing bonuses of $3,000 in some locations as it seeks to attract more workers

Amazon, now the second-biggest US private employer, set a $15 an hour minimum wage in 2018. Reuters

Amazon.com has increased its average starting wage in the US to more than $18 an hour and plans to hire another 125,000 warehouse and transportation workers, an executive told Reuters.

The world’s largest online retailer has raised pay from an average of around $17 since May. In some locations, the company is giving signing bonuses of $3,000, said Dave Bozeman, vice president of Amazon Delivery Services, triple what the company offered four months ago.

The fatter paycheck shows how big employers are desperate to draw workers in an increasingly tight US labour market. Fewer Americans are seeking jobless claims just as openings have hit a record in the reopening economy.

Mr Bozeman attributed Amazon's latest compensation increase to fierce competition. Amazon did not give exact figures, but a $1 raise on a $17-per-hour wage would amount to a hike of about 6 per cent.

Amazon, now the second-biggest US private employer, set a $15 an hour minimum wage in 2018. Walmart recently touted average hourly wages of $16.40, while Walgreens Boots Alliance said it would raise its minimum to $15 in October.

"It's a tight labour market, and we've seen some of that as the entire industry is seeing," said Mr Bozeman, who spoke in an interview at a delivery station in Tukwila, Washington.

He said Amazon would maintain its $15 an hour base pay. Benefits like funding college tuition for workers and starting wages as high as $22.50 in some areas distinguished the online retailer from peers, he said.

Amazon's news, after logistics hiring it announced in May and corporate recruiting it touted this month, follows a stretch of increased scrutiny of its labour practices. A failed effort by some staff in Alabama this year to organise put on display Amazon's demanding warehouse work and aggressive anti-union stance. After that battle, then-chief executive Jeff Bezos said the company needed a better vision for employees.

Andy Jassy, who succeeded Mr Bezos, said in a CNBC interview that aired on Tuesday the US ought to raise the federal minimum wage.

Amazon is hiring workers to help run 100 logistics facilities launching this month in the US, on top of more than 250 that opened earlier this year. Some workers will aid in Amazon's long-in-the-works effort to roll out one-day delivery for Prime loyalty club members.

"The 125,000 (warehouse workers) is really to help us keep up with our growth," said Mr Bozeman, who added that only a minority of jobs were to address attrition. Amazon said it would fill the roles, which are full- and part-time, as quickly as possible but did not offer a timeline.

The company's external delivery service partners aim to hire another 50,000 workers by year-end, too, Amazon said.

Nicole Bilich, a human resources manager, said competitive pay has brought in applicants for her Stockton, California, warehouse, which Amazon plans to launch in October. But hiring 2,200 people in three to four months is no simple matter.

"The biggest challenge we have is really just the numbers of people we need," she said.