Pay is a Crucial Combination

Pay is a Crucial Combination of Competitiveness.

It turns out, your warehouse equipment isn’t the only thing doing a lot of work for very little cost. Bureau of Labor Statistics (BLS) data shows a direct link between the introduction of an Amazon distribution center in Lexington County, SC, and a massive decline in annual earnings for warehouse workers.

Annual Earnings Fallen Over 30%

Since Amazon opened its Lexington distribution center in 2010, earnings for warehouse workers have dropped a staggering 30+%, falling from $47,000 to $32,000 annually. And Lexington’s warehouse workers are not alone…

Where Amazon Operates, Wages Decline

Other areas where the online retail giant has opened warehouses have likewise seen wages decline. In Chesterfield, VA, warehouse workers in the region have watched wages diminish 17%. In Tracy, CA, they have fallen 16%.

In areas where Amazon has opened distribution centers, government data shows warehouse workers’ wages fall an average of 3%, with workers in regions where Amazon operates earning around 10% less than warehouse workers employed elsewhere ($41,000 vs. $45,000/annually). Amazon operates over 75 fulfillment and 35 sorting centers across the U.S., employing 125,000+ full-time workers.

What’s Going on Behind-the-Scenes?

‘Stowers’ stock, ‘pickers’ pull items from shelves, and ‘packers’ box items. Constantly in-motion and monitored by devices that track performance, a single picker could collect 1,000-items and walk 15-miles in a shift. So why the dearth of pay?

Researchers point to a number of possible reasons:

– Warehouses erected in areas ‘left behind.’

– Areas have high labor-market concentration.

– Amazon is a major employer, outshining competition.

– A younger workforce. (Census data shows about half are <35.)

– Unskilled workers with minimal qualifications.

– Short job tenure, typically under 1-year.

– Better full-time benefits (health care, retirement savings, company shares).

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