Amazon’s wages for delivery partners are set to increase to $20.50 per hour as a result of the company’s $440 million investment in its Amazon Delivery Service Partner program. Initially launched in 2018, the program established a network of independent contractors and provided them with access to Amazon’s logistical expertise. According to Amazon, the program has created 279,000 driving jobs, generated $45 billion in revenue, and will now further contribute to Amazon’s pay to drivers.

The change in wages is just one of the many benefits Amazon is set to introduce for its drivers, with investment in education programs and child care support also on the list. The update arrives as discussions of unions and other contract negotiations enter the news cycle.

What is Causing the Change in Amazon’s Wages?

The labor market is shifting, with unions speaking out more regularly about wage hikes and worker rights. For example, UPS and Teamsters recently arrived at an agreement in August that ratified UPS’s acknowledgment of their demands, one which included a $2.75 increase in hourly pay for full-time and part-time employees. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.” Teamster’s general president Sean O’Brien stated. The deal also included other accommodations such as more full-time opportunities, an increase in SurePost deliveries, further negotiations on drones, etc.

The contract has now set the tone for all logistic companies and how they pay their drivers. With a rising interest in UPS’s employment opportunities now, companies will have to be more open to negotiating higher wage rates with workers.

FedEx has had to take a closer look at its current systems and consider a response to the situation as well. The already significant disparity between UPS workers and FedEx ground unit drivers has further widened, and Spencer Patton, a former high-profile contractor, has stated that FedEx should consider a 15 percent increase in current contractor compensations in order to continue attracting reliable drivers.

The disparity in wages is not only an issue between companies but within one as well. Diario AS reports that while FedEx might offer delivery drivers in Colorado $40 per hour, those in Massachusetts might see only $20 an hour. The demands for both increased and standardized pay are fast gaining traction. The company is reported to have plans to increase wages for select U.S. employees in October, but there are no further updates on the percentage amount or how they plan to roll this out. This has also redoubled efforts across the country for drivers to unionize.

The current average pay for a delivery partner driver is estimated at $19.28 an hour in the U.S., according to Indeed. Amazon’s pay to drivers is an update to the current average pay but it is unclear whether it will be enough to put workers at ease.

What Else Will Drivers Receive through the Amazon Delivery Service Partner Program?

While Amazon’s wages being increased is something to look forward to, there are other benefits lined up as well. Amazon’s benefits for drivers include the Next Mile education program, which is also slated for expansion. The program will provide eligible employees up to $5,250 in tuition coverage per year and also offer the option of choosing from 2,000 academic programs. Delivery Service Partners (DSPs) will have the opportunity to receive reimbursements for coursework they complete at accredited institutions, whether inside or outside the network.

Amazon’s benefits for drivers also include a childcare support system where drivers can avail of a 24/7 concierge service that will help them locate childcare according to their needs. “Through the service, DSP employees can work with a Care Manager to find a caregiver, post a care opportunity (e.g. babysitting job), or search and reach out to a caregiver directly,” the website states. The company also announced the  “Together, We Give” charity program for DSPs to gain access to $5,000 grants to make donations to nonprofits in their community.

While these benefits are going to be of undeniable assistance to Amazon’s drivers, it does not offer a significant hike from the current wage average. Workers might still see the appeal of a higher wage working for companies like UPS, where drivers can be backed by both high wages and a strong union presence to safeguard their interests. While there are no immediate strikes evident in Amazon’s near future, the DSP response to Amazon’s wages will be telling of what’s to come.

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