Key takeaways
Amazon is one of the nation's biggest employers, and hundreds of thousands of its employees staff fulfillment centers dotted across the United States. In September, the company raised its target for average starting pay to $18 per hour and has had a minimum wage of $15 since 2018. Yet despite Amazon's dominant position in e-commerce, warehouses are still part of a diverse and competitive logistics industry.
So can one company's decisions on pay impact everyone in the industry?
To find out, we tried to measure Amazon's footprint and impact in metropolitan areas across the country.
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The chart above draws on data from the Census Bureau and Big Rentz, an equipment rental company that compiled a database of Amazon's fulfillment centers in late October 2021. It shows Amazon's square feet in fulfillment centers per person in 20 metropolitan areas where Instawork transacted the most warehouse shifts since November 1, 2021. Nashville, a major logistics hub, is the clear leader.
In areas where Amazon has the largest footprint per population, it would probably also have the strongest presence in the labor markets for warehouse work. In these labor markets, Amazon's wage floors might have the most influence on pay. We would expect this to be especially true in areas where overall earnings were on the lower side; more businesses would likely have to raise pay in order to compete with Amazon for workers.
To gauge the lucrativeness of warehouse work in a given market, we can divide hourly earnings for warehouse jobs by overall hourly earnings using metro area data for May 2021 from the Bureau of Labor Statistics (BLS).*
Here is how this measure of pay compares to Amazon's footprint per population:
There is a modest positive correlation here. Las Vegas, where warehouse workers earn 80% of the prevailing hourly earnings, is the biggest outlier. This may be because of the relatively small share of white-collar jobs in the area. It may also be that Amazon's pay is counterweighted by other factors.
We can improve on this chart using the Instawork platform, where we have more specific information on roles and fresher data on pay; moreover, our flexible work shifts do not include Amazon's permanent employees. If we replace the BLS's data on earnings for logistics workers with our own pay data on warehouse roles starting on November 1, 2021, we find a stronger correlation with Amazon's footprint:
This is suggestive if not conclusive evidence for Amazon's influence on pay in warehouses. In a more detailed analysis, we would want to rule out other factors and study before-and-after effects of Amazon expansions. But for now, it does seem like a rising tide at Amazon might lift boats on other rivers, too.
*To measure pay for warehouse work, we average across three of the bureau's data series for earnings: 53-7062, 53-7064, and 53-7065.
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 3/24/2022 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
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