The big numerical reveal Wednesday was Amazon.com Inc. finally spilling the beans on the number of Prime members (more than 100 million). Amazon also disclosed another number that shows how much it relies on an army of people moving physical merchandise around the world: $28,446.
That’s the median annual compensation of Amazon employees.
Amazon reported this number for the first time under a new requirement that companies disclose the gap between pay for the rank-and-file and the person in the corner office. (Amazon Chief Executive Jeff Bezos, the world’s richest person, reported total compensation of $1.68 million last year. As in prior years, he didn’t take a stock bonus, collected a salary of $81,840 and had $1.6 million in personal security costs that Amazon covered.)
That median pay figure is skewed by the large number of Amazon’s more than 560,000 employees who work in its package warehouses, distribution centers, Whole Foods grocery stores and other places far from the ping-pong tables, free kale chips and yoga rooms of Silicon Valley’s rich tech campuses. Compare Amazon’s median pay with Facebook Inc.'s $240,430.
Just a reminder: “Median” means half of Amazon’s workers make more than $28,446, and half make less. The company doesn’t have to disclose average pay, which would probably be skewed higher by the smaller number of Amazon’s highly paid tech workers. In a statement, Amazon said its median pay figure includes people in more than 50 countries and part-time employees. The company also said it offers “highly competitive wage and benefits.” (Full disclosure: I have a family member who works for a labor organization that advocates for higher worker pay.)
Amazon likes to boast about its prowess in job creation, and the company’s workforce has exploded in recent years. Amazon is now the second-largest private employer in the United States, ranking behind only Walmart Inc. In Bezos’ annual letter to shareholders, also released Wednesday, he again highlighted Amazon’s investment in infrastructure and its ability to create jobs both directly and indirectly.
Bezos said Amazon directly created more than 130,000 jobs in 2017, not including people the company absorbed from acquired companies such as Whole Foods. That means Amazon brought on board more people in one year than the entire workforce of Google parent company Alphabet Inc., which said it had more than 80,000 employees at the end of last year.
“Our new jobs cover a wide range of professions, from artificial intelligence scientists to packaging specialists to fulfillment center associates,” Bezos wrote. The company’s median compensation figure shows that, at least by volume, Amazon’s workforce tilts more toward the fulfillment center associates than AI specialists.
There has long been a debate about the quality of jobs at Amazon and whether cities and states should roll out the red carpet for the company to open package warehouses in their backyards.
Amazon’s median pay works out to about $14 an hour, assuming a full-time worker at 52 weeks a year. That’s a solid wage in many parts of the United States and not so much in other parts. For comparison, Target Corp. recently announced plans to pay at least $15 an hour by the end of 2020. Those people questioning the quality of Amazon’s jobs just got a new data point for their critiques.
Ovide is a Bloomberg Gadfly columnist covering technology.