Amazon to Spend $1 Billion to Raise Pay and Cut Health Care Costs for U.S. Workers

Amazon said Wednesday it will invest $1 billion to raise wages and lower health care costs for its U.S. fulfillment and transportation workers, boosting average hourly pay to more than $23 and cutting out-of-pocket medical costs for many employees.

The Seattle-based company said some of its most tenured employees will see pay increases between $1.10 and $1.90 per hour. Full-time employees will receive, on average, about $1,600 more per year. Amazon also said it will reduce the cost of its entry-level health care plan to $5 per week and cut co-pays to $5 for primary care, mental health and most non-specialist visits for employees on the basic plan, starting next year. The company estimated those changes will trim weekly contributions by about 34% and reduce co-pays by roughly 87% for affected services.

The announcement affects U.S. fulfillment and transportation workers within Amazon’s global workforce of approximately 1.5 million employees. Amazon framed the move as a targeted investment in wages and benefits for front-line operations staff.

The pay and benefit changes come after labor unrest and regulatory scrutiny at the company. In December 2024, seven Amazon facilities held strikes organized by the Teamsters union as part of a push for broader labor agreements. Last year Amazon also reached a settlement with the Occupational Safety and Health Administration requiring the company to adopt corporatewide ergonomic measures, following OSHA allegations that hazardous conditions at some facilities contributed to serious lower-back and other musculoskeletal disorders.

Amazon did not specify exactly how the $1 billion would be allocated across pay raises, benefit subsidies and other costs, nor did it provide a precise count of U.S. employees who will be eligible for the increases. Company statements described the commitment as an investment in fulfillment and transportation roles rather than a companywide raise.

Analysts and labor advocates say wage and benefit adjustments can affect recruiting, retention and operational costs for large employers, although Amazon has not released projections on how the changes will affect its overall labor expense or pricing. The company has periodically adjusted wages and benefits in response to labor-market conditions and public scrutiny over working conditions.

Amazon’s announcement arrives as retailers and logistics firms continue to compete for hourly workers amid tight labor markets and changing consumer demand. By lowering routine health care costs for entry-plan members and raising base pay, the company aims to reduce employees’ out-of-pocket expenses while improving take-home pay for many hourly workers.

The new pay levels and health care changes are scheduled to take effect next year for the basic health plan. Amazon did not provide further details on rollout timing for the wage increases beyond saying the investments would benefit U.S. fulfillment and transportation staff.

Company executives and union representatives did not immediately respond to requests for additional comment.