Amazon (AMZN) is raising pay for its more than 800,000 US warehouse and transportation workers and giving them Amazon Prime for free.

Amazon, one of the country’s largest private employers, announced Wednesday that it will raise wages by at least $1.50 an hour, bringing the company’s average starting wage to more than $22 an hour. Amazon will also offer the $139 yearly Prime benefit to employees for free.

Amazon’s decision to raise wages is another sign of a tight jobs market for logistics workers, fueled by more Americans shopping online. The labor market has cooled considerably during the past year, but the economy is still adding jobs.

The average hourly wage for transportation and warehouse workers rose to $30.79 in August, up 22% from August of 2020, according to the Labor Department. In July, more than 460,000 jobs were unfilled in the transportation and warehouse sector, the Labor Department said.

Rivals such as UPS, Walmart and Target have also bumped up wages for warehouse workers. UPS struck a five-year deal with the Teamsters union last year that included a jump in starting pay to $23 an hour during the contract.

Amazon’s wage hike comes ahead of the holiday season, typically the busiest online shopping stretch of the year. Sales are expected to climb by up to 3.3% this holiday stretch, Deloitte predicted in a report last week. Online sales will grow by up to 9%.

Amazon has also faced intense scrutiny over safety and working conditions at warehouses.

An investigation by the Senate Health, Education, Labor and Pensions Committee found Amazon’s warehouses are especially dangerous for workers during the company’s annual Prime Day event as well as the holiday season. The company’s workers have repeatedly made headlines, with persistent complaints about the “grueling” experience of racing around warehouses that can be the size of 28 football fields while the company tracks their every move.

Amazon said Wednesday that it has made progress on worker safety. The company claims work-related injuries are down by 28% and serious injuries are down by 75% over the past five years.

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