By Georgia Wells, Rachel Feintzeig and Theo Francis
When Amazon.com Inc. revealed its workers' median annual salary
of $28,446 last week, the predominantly blue-collar nature of its
workforce became clear.
The figure puts Amazon on par with chocolate manufacturer
Hershey Co., slightly above retailer Home Depot Inc.--and miles
below the $240,430 median annual compensation at Facebook,
according to the companies' latest proxy statements.
Amazon is often compared with Silicon Valley tech giants like
Facebook, Apple Inc. and Alphabet Inc.'s Google, but a vast
logistical apparatus separates it from its tech peers.
Most of the roughly half-million employees at Amazon.com Inc.
don't make six figures and spend their workdays writing code. They
unload trucks, drive forklifts and walk miles collecting products
to fill orders--all for around the same pay as workers in other
companies' warehouses.
One researcher likened Amazon to the child produced by a
three-way merger between Google, United Parcel Service Inc. and
Walmart Inc.
"At Amazon, you've got this whole group of foot soldiers out
there that are working on fulfillment centers that aren't part of
the picture for the other names in internet land," said Michael
Olson, senior research analyst at Piper Jaffray. "It shows how
Amazon is different from the other tech stocks."
More than 330 large public companies have disclosed median
annual pay figures for the first time this year, a requirement of
the post financial crisis Dodd-Frank law. Median salaries reported
so far range from $253,015 at biotech firm Incyte Corp. to less
than $10,000 at retailers with big part-time workforces and some
manufacturers with high numbers of employees in low-wage
countries.
In the S&P 500, Amazon isn't classified as a tech stock, but
rather as a part of the retail industry. At the same time, Amazon
is valued at 184 times its estimated earnings for this year,
according to analysts surveyed by FactSet--a far higher valuation
than even Facebook and Alphabet.
Amazon started as a retailer, but it always had technology at
its core. When Chief Executive Jeff Bezos founded Amazon in 1994,
it was a book seller, but it took advantage of the nascent internet
to connect far-away customers.
Today, Amazon uses software to run everything it does, whether
that is shuttling packages around the world, streaming movies on
the web, storing companies' digital files on its servers or
recommending products to customers. It has spent years honing its
machine learning and artificial intelligence technology to the
point where it can forecast demand, identify fraud and recommend
products to customers.
But with more than 175 operating and fulfillment centers, where
workers pick, pack and ship orders, and more than 35 sorting
centers globally, most members of Amazon's workforce are a sharp
contrast with the 45,000-plus largely white-collar workers at its
Seattle campus offices and elsewhere.
The median salary data was disclosed under new rules mandating
the information for public companies. Companies have some leeway in
how they report the figure, which is intended to identify the
worker who is paid at the midpoint for all employees.
Median pay of $28,446 works out to about $13.68 an hour--around
what the typical U.S. front-line warehouse worker makes, experts
say. The median pay includes Amazon's workers from more than 50
countries and ranges across the entire Amazon workforce, including
full- and part-time workers in every area of the company.
"These roles range from associates working in our fulfillment
centers to customer-service representatives to software engineers
and product managers," an Amazon spokeswoman said. Amazon pays its
full-time fulfillment center workers in the U.S. an average hourly
wage of more than $15, including cash, stock and incentive bonuses,
the spokeswoman said.
In some ways Amazon's workforce resembles that of major
retailers. Amazon has the fifth-highest median pay of retailers
ranked by S&P Global, according to a Wall Street Journal
analysis of corporate proxy data provided by MyLogIQ LLC, exceeding
the median pay figures from Home Depot Inc., Macy's Inc., Gap Inc.
and Walmart Inc. In a securities filing Friday evening, Walmart
reported that it paid its median worker $19,177 last year, ranking
it near the middle of the 18 retailers that have reported data so
far.
Amazon's median pay trails all 10 companies in S&P Global
rankings in the transportation industry, including several railroad
and airline companies.
The company's "enormous market advantage" doesn't appear to be
translating into more pay for the median warehouse worker, said Ben
Zipperer, an economist at the Economic Policy Institute, a
left-leaning think tank in Washington, D.C.
Brian Devine, senior vice president at logistics staffing firm
ProLogistix, estimates that Amazon pays in the upper half of
employers in logistics, but not in the top 10%.
U.S. cities have been vying for the chance to host Amazon's next
batch of white-collar jobs, which could number as many as 50,000,
in a proposed second headquarters.
The average pay for software-development engineers who work for
Amazon in the U.S. is about $107,000, according to worker salaries
shared on website Glassdoor, an online marketplace where employees
can anonymously report their pay. The average pay for Amazon's
logistics specialists in the U.S. is about $45,000, according to
Glassdoor data.
Amazon has said that depending on location, the average
compensation for roles at its second headquarters could top
$100,000.
Write to Georgia Wells at Georgia.Wells@wsj.com, Rachel
Feintzeig at rachel.feintzeig@wsj.com and Theo Francis at
theo.francis@wsj.com
(END) Dow Jones Newswires
April 22, 2018 09:14 ET (13:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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