Dive Brief:
- Amazon is raising pay by $1 per hour for eligible employees, making its core operations full-time employee minimum starting wage $20 per hour, the e-commerce giant announced Wednesday.
- The company also introduced a banking benefit called Day 1 Financial for employees, which is a membership in First Tech Federal Credit Union. The lifetime service includes zero overdraft or monthly maintenance fees, and no account minimums on standard checking and savings accounts.
- Additionally, all Amazon employees in the U.S. will have access to new grocery benefits starting in October. That includes an uncapped 10% off eligible grocery and everyday essentials on Amazon.com and Whole Foods Market online, plus 20% off in Whole Foods stores.
Dive Insight:
The increased minimum starting wage at Amazon bumps its average starting wage to about $24 per hour, the company says.
The company’s new financial benefit will roll out later this year and become broadly available in 2027. The banking service also requires no credit history to open a checking and savings account, offers access to auto and home loans, and more. It adds to Amazon’s existing free Brightside Financial Care service, where employees can connect with a financial assistant.
Amazon’s new grocery benefits can also be combined with existing Prime member discounts. Eligible employees already receive a free Amazon Prime membership.
It all comes as the U.S. consumer is facing financial pressures. While retail spend has remained relatively healthy so far, some experts believe a tipping point is in the near future.
Inflation started to outpace wage growth earlier this year, with grocery and fuel prices increasing.
“A consumer spending slowdown is likely later this year and into early 2027 as middle-income and lower-income households feel the pinch from higher gas and grocery prices,” Navy Federal Credit Union’s Chief Economist Heather Long said in emailed comments Wednesday after monthly retail sales data was released. “Real incomes are flat or declining for many and they will have to cut back on something.”