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Amazon boosts average starting pay to $18 an hour for 125,000 new hires

Amazon said on Tuesday it is boosting its average starting wage to $18 an hour for 125,000 new hires in the U.S. in jobs in transportation and fulfillment. Some locations are also offering sign-on bonuses of up to $3,000. 

The new jobs may pay up to $22.50 an hour in some locations, Amazon said. The roles also provide full-time workers with health, vision and dental insurance, as well as a 401(k) and up to 20 weeks paid parental leave. The retailer earlier this month said it will pay full college tuition for its 750,000 U.S. hourly employees starting in January. 

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The wage hike comes amid struggles by many employers across the nation to hire new workers due to labor shortages caused by the pandemic. Some businesses have blamed COVID-19 unemployment benefits for the dearth of qualified workers, but millions of workers say they continue to sit on the sidelines because of virus fears, as well as a shortage of child care and remote school for younger children.

The average starting wage of $18 an hour will be effective in regions where labor markets are tight, while the company will continue to pay a minimum wage of $15 an hour, said Dave Bozeman, vice president of delivery services at Amazon.

"With the pandemic, we have seen it tight in certain areas rather than others — we have to make sure we have a competitive wage in those areas," Bozeman said, adding that regions including parts of Kentucky, Iowa and Ohio are experiencing tight labor markets. 

Other companies have also boosted wages and benefits to lure workers from the sidelines. While some businesses have pointed the finger at pandemic unemployment benefits — which ended on Labor Day — the nation's labor force still hasn't rebounded to its pre-pandemic size. There are about 3 million fewer workers in the labor force today than there were prior to the pandemic. 

Bozeman said the company's announcement that its hiring 125,000 workers isn't part of its seasonal hiring push. The company plans to announce those hirings later this year, he added.

Amazon said it has opened more than 250 warehouses in 2021 and plans to open 100 new buildings this month. Amazon said people can learn more about the jobs at this site.

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