Amazon Raises Minimum Starting Wage to $20, Adds Banking and Grocery Benefits

Quick Facts

Amazon raises its U.S. minimum starting wage to $20 per hour, effective September 27, 2026
The company is investing more than $1.5 billion in the pay increases, which push average starting wages to $24 per hour
New benefits include a credit union membership program and grocery discounts at Whole Foods and Amazon Fresh

Amazon is raising its minimum hourly starting wage for U.S. full-time core operations employees to $20, effective September 27. The $1 increase comes ahead of the holiday season, when the company processes its highest order volumes and brings on tens of thousands of temporary workers.

The company says the increase pushes its average starting wage to $24 per hour. When benefits are included, Amazon says total compensation exceeds $32 per hour, equivalent to more than $66,000 annually for a full-time employee.

Amazon is investing more than $1.5 billion in the wage increases. The company says minimum starting pay has risen more than 17% over the past three years.

New Benefits Alongside the Raise

Amazon announced a package of new perks alongside the wage increase. The most notable is Day 1 Financial, a banking benefit that gives qualified employees and their families lifelong membership in First Tech Federal Credit Union.

The credit union membership includes no overdraft fees, no monthly maintenance fees, no minimum balance requirements, and no credit history requirement. Members also get surcharge-free ATM access nationwide and reimbursement of up to $300 per year for out-of-network ATM fees. The Day 1 Financial rollout begins in late 2026 and is expected to reach broad availability in 2027.

Employees will also receive a 10% discount on eligible groceries and essentials at Amazon.com and Whole Foods Market online, and a 20% discount at Whole Foods physical stores. Amazon already offers workers free Prime memberships, prepaid education programs, and healthcare coverage.

Competitive and Operational Context

The $20 floor matches Costco’s starting wage, which was set in 2025. Target starts workers at $15 per hour and Walmart at $14 per hour, putting Amazon ahead of its two largest retail competitors on base pay.

Amazon employs roughly 1.1 million people in the United States, making it the second-largest private employer in the country behind Walmart. Last year, the company hired an estimated 250,000 seasonal workers for the holiday period, accounting for about half of all seasonal retail hiring nationwide.

At 40 paid hours per week for 52 weeks, $20 per hour translates to $41,600 before taxes. The federal minimum wage remains $7.25 per hour, or $15,080 annually at full-time hours.

Automation and Labor Pressures

The wage increase arrives as Amazon continues to expand automation inside its fulfillment network. CEO Andy Jassy noted in a June 2025 employee memo that the company expects to need fewer people in some current roles over time.

For Amazon’s operations, higher wages can coexist with lower per-unit labor costs if experienced workers handle more packages per hour and turnover drops. Retention savings on recruiting and training can offset a portion of the higher payroll.

The announcement also comes as Amazon faces legal scrutiny over labor practices. New Jersey filed a federal antitrust lawsuit against Amazon alleging the company uses its dominance over its delivery contractor network to suppress driver wages and limit worker organizing.

Worker Reaction

Reaction among warehouse employees has been mixed. On forums used by fulfillment center workers, some questioned the practical value of the new perks. One worker noted that the Whole Foods discount would only bring prices to levels comparable to standard grocery stores, a reference to the chain’s reputation for premium pricing.

SVP Udit Madan framed the announcement as part of a longer-term investment strategy. “I’m excited about how these investments work together to help our employees and their families continue to thrive for the long run,” Madan said in the company’s press release.