Amazon today announced it is increasing the minimum wage of its 350,000 full and part time US workers to $US15 per hour, following increased pressure over the treatment of its lowest paid workers.
Meanwhile, research released today reveals American Uber drivers are being paid less than $US10 per hour – a rate that places some full time drivers below the poverty line. While the Amazon pay-bump is welcome relief, scrutiny continues to mount over how tech companies treat their lowest pay workers, including in Australia.
Amazon has attracted criticism in recent years as warehouse worker wages stagnated while revenue soared.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Jeff Bezos, Amazon Founder and CEO in a company statement.
“We’re excited about this change and encourage our competitors and other large employers to join us.”
One of Amazon’s harshest critics has been Sen. Bernie Sanders. Today he welcomed the news and urged other companies to follow Amazon’s lead.
“It is absurd that the taxpayers of this country have to subsidise the wealthiest person on earth, who happens to be Mr. Bezos, because so many of his workers made wages that were so low that they were forced to go on food stamps and Medicaid — it doesn’t make sense,” Sanders said.
“So I applaud Jeff Bezos today for raising the minimum wage at Amazon.”
Australian warehouse workers “struggle to function”
Amazon warehouse workers in Sydney and Dandenong are reportedly paid AU$25.36 per hour – just over the $25.05 award rate. However, because the majority of work is outsourced through a labour hire companies, workers struggle to negotiate better terms like the $30 – $35 per hour workers at nearby warehouses receive.
Fairfax Media has also revealed the infamous Amazon “cult-like corporate culture” and employee pressure is present in Australian warehouses too.
“Warehouse pickers are issued with handheld electronic scanners that direct them to different aisles of the warehouse to collect products, and load them onto carts to be dispatched to customers,” Fairfax reported in early September.
“As soon as one item is scanned, a solid bar on the bottom of the screen immediately starts to count down, showing how much time they have to reach their next item, which could be anywhere in the 24,000-square-metre warehouse. If an item is not scanned within the required time, the worker’s ‘pick rate’ is marked down.”
Warehouse workers told Fairfax they struggled “to function” because of the pressure and employees who failed to meet pick rates don’t last long.
Amazon responded to the allegations at the time, saying the company “set productivity targets objectively, based on previous performance levels achieved by our workforce”, and that staff performance was evaluated over a “long time”.
As employees strive for new levels of productivity, collecting minimum wage for their efforts, Amazon’s upper echelon of staff are rewarded handsomely. Amazon CEO Jeff Bezos is now regarded as the world’s richest man and Amazon is valued at over $1 trillion. Some back of the envelope maths from Quartz at Work suggests Bezos will make an average US Amazon warehouse worker salary every 11.5 seconds.
Uber and the poverty line
The Amazon news coincides with the release of a US study revealing American Uber drivers receive on average less than US$10 per hour and drivers are unsatisfied with their earnings.
The US study conducted by Ridester, which included an analysis of the earnings of over 2,600 Uber drivers, showed UberX drivers received an average hourly wage of $13.70 before tip. However, when taking into account vehicle cost the figure falls to $US9.73 per hour.
At that rate an Uber driver working 40 hours per week and supporting a family of three would not break the poverty line in America. Uber has been tight lipped about driver incomes since claiming the median income of an Uber driver in a major US city was above US$90,000 per annum in 2014.
In Australia the average hourly rate has been calculated as less than $15 per hour, well below both the statutory minimum wage and the the award pay for waged workers in the sector. Uber considers its drivers to be contractors rather than employees, thereby removing any responsibility to meet minimum wage or provide benefits – a position the Fair Work Commission has backed up.
Australian Uber drivers voiced concerns over their pay and when pressed by the ABC in March Uber’s then Australian boss, David Rohrsheim, did not deny many Australian drivers were earning less than minimum wage.
“Earnings change depending on what time people choose to log on,” Rohrsheim told the ABC.
“When surge pricing automatically kicks in … the fare might be one-and-a-half, two times the normal rates.
“Drivers know this and the smart ones log on at the right times and the right areas and earn the big bucks.”