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AMAZON DANGLES FREE BACHELOR’S DEGREES AS NEW PERK IN FIGHT FOR U.S. WORKERS


E-COMMERCE GIANT WILL EXPAND COLLEGE EDUCATION BENEFIT AS IT BATTLES TO HIRE
HOURLY WORKERS IN TIGHT U.S. LABOR MARKET

AMAZON IS LOOKING TO BRING ON TENS OF THOUSANDS OF ADDITIONAL HOURLY STAFFERS TO
WORK IN ITS FULFILLMENT CENTERS AND DELIVERY NETWORK.

Photo: Jeremy M. Lange for The Wall Street Journal
By
Chip Cutter
Close


CHIP CUTTER

 * Biography
 * @ChipCutter
 * chip.cutter@wsj.com

Updated Sept. 9, 2021 4:36 pm ET

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Amazon.com Inc. AMZN 0.15% is offering to pay college tuition for more than
750,000 U.S. employees, as the battle for hourly workers escalates beyond
minimum wages.

The e-commerce giant joins other retailers, restaurant chains, garbage haulers
and meat processors dangling the prospect of a free college education as a way
to lure and retain staff in a tight U.S. job market.

Amazon said Thursday that it will cover the cost of tuition and books for staff
pursuing bachelor’s degrees at various universities nationwide. Hourly employees
will be eligible for the new perk after 90 days on the job. It didn’t identify
the schools.

The company has hired 400,000 employees during the pandemic, but it is looking
to reduce turnover and bring on tens of thousands of additional hourly staffers
to work in its fulfillment centers and delivery network over the coming months.
Employees working as little as 20 hours a week will be eligible for the college
benefit, though Amazon will pay 50% of the college costs for part-time staffers.

SHARE YOUR THOUGHTS

How do you think Amazon’s plan to expand educational benefits might affect
hiring? Join the conversation below.

“Career progression is the new minimum wage,” said Ardine Williams, a vice
president of workforce development at Amazon, who notes employer-funded training
can help people prepare for a career that interests them. “Most adult learners
don’t have the luxury of quitting their jobs and going to school full-time.”



The stepped-up perks also reflect what executives say is a reality across the
corporate sphere: Even $15 an hour, Amazon’s base wage, is no longer enough to
attract many workers. As more employers and cities have raised minimum wages,
large companies have aimed to differentiate themselves through additional
benefits, such as greater time off, more reliable scheduling, access to
emergency child care and, increasingly, a path to a broader education and new
skills.

Many of America’s biggest companies strengthened educational initiatives this
year, or rolled out programs essentially matching the benefits offered by their
competitors.

Your browser does not support the audio tag.
What’s News
Will Bachelor's Degrees Bring Workers to Amazon?
A.M Edition for Sept. 10. WSJ's Chip Cutter discusses efforts by Amazon and
other companies to lure workers amid a tight workforce. Oil prices drop after
China says it will release its reserves. And, both football and packed stadiums
are back. Marc Stewart hosts.Read Transcript
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Walmart Inc., one of Amazon’s chief rivals, in July said it would fully
subsidize college tuition and books for 1.5 million part-time and full-time
employees in the U.S., dropping an earlier requirement that employees pay a $1
daily fee toward their education. Walmart employees can enroll in the program on
their first day of employment. The retailer has expanded the number of
educational partners over time, adding Johnson & Wales University and the
University of Arizona, among others, this summer.

Last month, Target Corp. TGT 0.33% said it would offer its 340,000 U.S. workers
no-cost college education, including books and course fees, for a number of
programs.

Among restaurant chains, Chipotle Mexican Grill Inc. offers free college tuition
to employees who work at least 15 hours a week after four months on the job. In
2015, Starbucks Corp. SBUX 1.12% said it would cover the full cost for employees
who work an average of at least 20 hours a week to get a degree online through
Arizona State University.

As more companies offer such benefits, they can become an expectation among
hourly workers, which pressures more employers to offer similar perks,
economists say. For companies that are willing to go only so far on pay,
training and educational opportunities can represent another form of
compensation, said Chris O’Leary, a senior economist at the W.E. Upjohn
Institute for Employment Research, a nonprofit research center.



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Employers Competing for Workers Turn to Signing Bonuses and Freebies

Low-wage work is in high demand, and employers are now competing for applicants,
offering incentives ranging from sign-on bonuses to free food. But with many
still unemployed, are these offers working? Photo: Bloomberg News

Educational initiatives can also help companies in attracting a more
aspirational worker, one who may be persuaded to stay in a difficult job until
they complete their education, he added. “They might be able to get enough
productive months or years out of somebody to make it worth the investment,” Mr.
O’Leary said.

Some elements of Amazon’s four-year degree benefit are still being ironed out.
When the program launches in January, employees will likely be able to attend
in-person or online courses, depending on their preference, Ms. Williams said.

Amazon will also cover the cost of an associate degree, high-school completion
program, English as a second language certification or other programs.
Previously, it paid 95% of the costs for an associate degree or other
certification programs and didn’t offer four-year degrees.

Amazon will pay tuition and fees upfront, instead of reimbursing employees
later. The specific fields of study offered could vary by community based on the
in-demand jobs in the area, though Ms. Williams said it is likely that Amazon
would support degrees in technology, engineering and healthcare, among others.
Amazon doesn’t require employees to pay back tuition or fees if they leave the
company in the middle of a course or shortly after completing a program.



The company on Thursday also said it was expanding other upskilling training
programs offered to employees, including launching programs focused on areas
such as user-experience design and research. Amazon said its overall education
and upskilling efforts will likely cost the company $1.2 billion by 2025.

In hopes of retaining workers, a number of companies are now extending education
benefits to the children of employees, too.

Meat processor JBS USA Holdings Inc. launched a program earlier this year that
provides full-time employees and their dependents access to tuition-free
associate degrees and trade certificates. So far, 1,835 people have enrolled in
the program, including nearly 600 dependents of employees. Programs in animal
sciences, business administration, liberal arts and general education and
nursing have been among the most popular so far, the company says.

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The program has become a point of pride for some employees, said Chris Gaddis,
the head of human resources for JBS USA. “They don’t want their kids to have to
work in a meat plant—they take great pride in it, but they also realize that the
world extends beyond the boundaries of that particular beef plant,” Mr. Gaddis
said.

Waste Management Inc., WM 0.16% which announced its own free college-degree
program for employees earlier this year, will expand its program to dependents
who are eligible for benefits later this year.

Meanwhile, California legislators advanced this week a bill to regulate
companies like Amazon that employ quotas and other algorithm-driven work
practices at their warehouses. The bill would bar companies from enforcing
productivity quotas and penalties that affect employees’ health and safety,
including the ability to take breaks or use the bathroom.

The bill, which was backed by a coalition of labor groups, passed the state
Senate with a 26-11 vote Wednesday. The measure was opposed by business groups
including the California Chamber of Commerce and the California Retailers
Association. Amazon belongs to both groups but hasn’t taken its own position.
The bill is expected to soon go to Gov. Gavin Newsom, who is facing a recall
vote. A spokesman declined to comment on whether he would sign it.

—Christine Mai-Duc contributed to this article.

Write to Chip Cutter at chip.cutter@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved.
87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 10, 2021, print edition as 'Amazon Workers Get Tuition
Perk.'




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