Amazon says it’s investing $1 billion to raise wages and lower the cost of health care plans for its U.S. fulfillment and transportation workers

FILE - An Amazon Prime delivery person lifts packages while making a stop at a high-rise apartment building, Nov. 28, 2023, in Denver. (AP Photo/David Zalubowski, File)

NEW YORK (AP) — Amazon says it's investing more than a $1 billion to raise wages and lower the cost of health care plans for its U.S. fulfillment and transportation workers.

The Seattle-based company said Wednesday the average pay is increasing to more than $23 per hour. Some of its most tenured employees will see an increase between $1.10 and $1.90 per hour. Full-time employees, on average, will see their pay increase by $1,600 per year.

Amazon also said it will lower the cost of its entry health care plan to $5 per week and $5 for co-pays, starting next year. Amazon said that will reduce weekly contributions by 34% and co-pays by 87% for primary care, mental health and most non-specialist visits for employees using the basic plan.

Amazon has a global workforce of 1.5 million workers.

Last December, seven Amazon facilities went on strike, an effort by the Teamsters union to pressure the e-commerce company for a labor agreement during a key shopping period.

That same month, Amazon reached a settlement with the Occupational Safety and Health Administration that requires the online behemoth to adopt corporatewide ergonomic measures at facilities across the country. The agency claimed hazardous working conditions led to serious lower back and other musculoskeletal disorders at Amazon facilities.

In January 2024, Walmart, the nation's largest private employer, said that average wages for hourly workers would exceed $18, up from $17.50. The increase was due to Walmart introducing some higher-paying hourly roles in its Auto Care Centers last year, among other changes, the company said.

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Amazon employees load packages on carts before being put on to trucks for distribution customers for Amazon's annual Prime Day event at an Amazon's DAX7 delivery station on July 16, 2024, in South Gate, Calif. (AP Photo/Richard Vogel)

Walmart, based in Bentonville, Arkansas, had announced in January 2023 that U.S. workers would get pay raises the following month, increasing starting wages to between $14 and $19 an hour. Starting wages had previously ranged between $12 and $18 an hour, depending on location.

At Minneapolis-based Target, the starting hourly wage ranges from $15 to $24 for workers employed at stores and distribution centers, depending on the location, company spokesman Brian Harper-Tibaldo said.

The average hourly wage for a Target store worker is more than $18, he said.

FILE - An Amazon truck makes deliveries in Wheeling, Ill., May 16, 2024. (AP Photo/Nam Y. Huh, File)