A Study of the Spillover Effects of Amazon’s 2018 Minimum Wage Increase

Throughout the past two decades, e-commerce has exploded in the United States, with Amazon leading the way. Following criticism from the media and politicians, Amazon instituted a nationwide minimum wage of $15 per hour for all employees at the end of 2018. Since Amazon fulfillment and sortation centers employ approximately twenty percent of all warehouse employees in the United States, one must ask whether or not their recent institution of a $15 minimum wage in 2018 has improved overall local warehousing wages in counties with Amazon locations present. This paper will answer this question by conducting a quarterly county-level analysis on the American warehousing industry from 2016 to 2020 using QCEW data from the Bureau of Labor Statistics website, comparing counties with Amazon warehouse to counties without them. This paper finds that Amazon’s minimum wage increase in 2018 resulted in lower overall warehouse wages for counties with an Amazon warehouse present due to the increase in lower-level employees in the industry. Moreover, when looking at employment spillover effects, counties with an Amazon warehouse saw an increase in warehousing employment as well as a decrease in clothing retail employment after 2018.