SALT LAKE CITY — While Amazon.com has opened the gates on hiring some 1,500 to staff its sprawling new Salt Lake distribution center, a closer look at those openings reveal most new employees will barely earn a living wage from the online giant.
State officials celebrated an announcement early last summer of Amazon's plans to build and staff an 850,000-square-foot distribution center in Salt Lake City's northwest quadrant, and even offered the company an eight-year, $5.7 million tax incentive. Gov. Gary Herbert said at the time that luring one of the world's most valuable retailers to Utah was a coup.
"To have a company like Amazon, as big as they are, choose Utah for a fulfillment center is a great win for us," Herbert said. "It's a big shot in the arm for Salt Lake City, Salt Lake County and the state."
While the company made a $200 million capital investment in the facility, which will rely heavily on robotics and automation to augment the efforts of human workers to fulfill and ship orders, who exactly is getting a shot in the arm is somewhat selective.
Amazon's online job posting for new "warehouse fulfillment associates," the positions that represent the majority of the new hiring in Salt Lake City according to an Amazon spokeswoman, advertises a starting wage of $12.50 per hour. That's an earning rate that falls far short of the state's median wage of just over $17 per hour and, for a worker that puts in a year's labor, will earn them a flat $26,000 — over $20,000 shy of Utah's $46,460 median annual wage.
A June report on housing affordability noted the minimum hourly wage for a full-time worker to afford a two-bedroom apartment in Salt Lake City is $18.85 per hour. A living wage calculator, developed by Amy K. Glasmeier at the Massachusetts Institute of Technology, determined $11.48 per hour is the bottom line for a single adult resident living in Salt Lake County.
But add one child dependent to the mix, and that minimum living wage jumps to just over $24 per hour. Utah affordable housing experts noted at these rates, workers and their families are just one unexpected bill or unplanned expense away from disaster.
While the overwhelming majority of the new Amazon jobs will hover near the low level, a portion of them will exceed the average Salt Lake County annual earnings of $50,537 or about $24.30 per hour.
Last June, the Governor's Office of Economic Development announced it had awarded Amazon a post-performance tax incentive package for its plans to pay 130 of its new Salt Lake employees 110 percent or more of the county average wage. Those positions will generate just over $28 million in corporate, payroll and sales taxes over the next eight years and for that, Amazon will be eligible for a 20 percent rebate worth about $5.7 million over that time period.
Amazon spokeswoman Lauren Lynch said the starting wage for the company's Salt Lake City facility was calculated based on prevailing wages in the local market. She also noted that while many employees will begin at that rate, some new hires with additional skills will begin at higher hourly earnings.
Also, Lynch said that employees hired at the $12.50 per hour rate will quickly move up the pay scale, as the company typically grants wage increases for new hires "every few months, even in the first year."
Lynch also reeled off the benefits that come with working for Amazon, some of which stand out as unusually generous, particularly for relatively low-wage positions. Those include eligibility for 20 weeks of paid maternal/paternal leave, health insurance, 401(k) and Amazon stock options, all of which enact immediately upon the start of employment.
Upon reaching the one-year mark, employees become eligible for the company's Career Choice program, which provides up to 95 percent, prepaid tuition compensation for vocational or technical training or pursuit of associate-level degrees for "in-demand" jobs. Those include aerospace, information technology, computer science, health care and others and do not require a commitment to stay with Amazon on completion.
Lynch said even at the base rate of $12.50, the fully loaded compensation for new Amazon warehouse associates comes in at around $15 per hour.
Even while Amazon's starting salaries lag well behind median wages in Utah and most other U.S. cities, the depth and breadth of the company's economic impacts are enormous.
Amazon is one of three U.S. tech firms on the verge of becoming the first commercial endeavor to reach a $1 trillion valuation. At the end of regular trading Tuesday, Amazon stock was trading at nearly $1,800 a share, earning the company a valuation of over $876 billion.
Apple is currently ahead of Amazon in that race, at a $956 billion valuation on Tuesday, with Google not far behind in the race at about $885 billion. Forbes reports Amazon founder/CEO Jeff Bezos is personally worth more than $146 billion as of Tuesday, making him not just the current richest individual in the world, but richest person ever.45 comments on this story
Lynch said Amazon has spent over $160 billion in capital investments and wages in the U.S. over the past seven years, with those expenditures generating an additional $100 billion in gross domestic product via economic "ripple effects." She noted the company has created some 300,000 U.S. jobs since it was founded in 1994.
Lynch said people interested in applying for positions at the new Amazon facility, which is scheduled to open late this summer, can do so via online application, or at in-person hiring events at which on-the-spot job offers will be made.
Aug. 1-6, 9 a.m to 4 p.m., Vivint Smart Home Arena, 301 S. West Temple
Aug. 7-16, 9 a.m. to 4 p.m., Hilton Salt Lake City Center, 255 S. West Temple