Elijah Hahe spent years toiling in retail-supermarket cart boy, gas
station attendant-with little to show for it but low pay, inconsistent hours
and skimpy benefits.
So when Hahe heard a radio ad for positions at a new Amazon.com Inc
warehouse near Columbus, Ohio, he applied immediately.
“I knew Amazon was an up-and-coming company, so I figured I'd give it a
shot,” says Hahe, who’s 25. “It was definitely scary. Once I got here, I
realised it was a good fit.”
A year later, Hahe is training new hires and aspires to run his own
warehouse. He has steady full-time work, health benefits and is saving for a
three-week vacation to Ireland, something he never considered while working
retail.
Many of these new warehouse jobs are at Amazon fulfilment centres,
buildings of about a million square feet where products are retrieved, packed
into boxes and shipped to homes around the country. The 125,000 people toiling
in Amazon’s distribution network account for about 25% of the warehouse jobs
added in the last 20 years. So while critics from Barack Obama to Donald Trump
have blamed Amazon for destroying retail jobs, the online giant is also
providing a potential lifeline to those same workers.
There is a wrinkle, however, with long-term implications for the US
labour market. The likelihood of someone who lost their job working the Macy’s
makeup counter landing a job packing boxes at an Amazon warehouse largely
depends on where they live (or their ability to move).
Bloomberg reviewed Labour Dept data, state notices about store closures
and Amazon warehouse announcements over the past 20 years, revealing a
concentration of warehouse employment growth clustered around Amazon facilities
while retail's losses are more evenly distributed.
As shoppers shift more of their spending from stores to websites, some
warehouse labour markets are winning while many retail markets are losing. The
1,000-plus people who have lost retail jobs over the last decade in the
Columbus region where Hahe works, have Amazon as a backstop. As do retail
workers in San Bernardino, California, Harrisburg, Pennsylvania and dozens of
other markets around the country where Amazon has set up distribution hubs.
But many regions losing department stores can’t take advantage of
Amazon’s hiring machine. For example, hundreds of displaced retail workers in
El Paso, Texas, are out of luck because there's no Amazon facility nearby.
”Previously, you needed stores in big towns, medium towns and small
towns,” said Kirthi Kalyanam, director of the Retail Management Institute at
Santa Clara University. “With e-commerce, jobs are more aggregated. Some
markets will have a huge shortage of jobs. For people caught on the wrong side,
this is going to be painful.”
The e-commerce revolution that has decimated the retail industry (Toys
“R” Us Inc just filed for bankruptcy protection) is also upending the gender
balance. Women hold about 60% of jobs at general merchandise stores but only
about a third of those at warehouses, which tend to favour mid-career men
without college degrees, says Jed Kolko, the chief economist at job search
website Indeed.com. “The rise of e-commerce doesn't just favour some places
over others,” he says. “It favours some people over others.”
Amazon’s growing impact on the economy-including its US$13.7bil purchase of Whole Foods Market-has prompted talk in Washington
that the company is growing too big and powerful. Trump frequently hints in
tweets he'll try to rein in the e-commerce giant, and Democrats have called for
hearings.
No one expects an antitrust investigation against Amazon any time soon,
but the company’s public relations machine has been loudly touting its hiring
and job-training programmes. In January, chief executive officer Jeff Bezos
pledged to create 100,000 jobs over the next 18 months. And earlier this month,
the company invited cities to submit proposals to host a second North American
headquarters that would eventually employ 50,000 (although some of those could
transfer from its Seattle base).
The company is also hiring in an industry that typically pays better.
Amazon doesn’t disclose pay but warehouse workers earn an average of US$17 an
hour versus US$13 for retail workers at stores selling general merchandise.
Plus, warehouse workers get more than 40 hours per week compared with about 30
for retail workers, according to Labour Dept data.
Damien Tyson, 30, left a management job in a Florida big-box store and
now works as a trainer at the Amazon warehouse in Columbus. Tyson makes more
than he ever did in retail, and he's putting the extra money toward online
classes to pursue a degree in data management. He met his fiancé, who also has
a retail background, at Amazon and she’s going back to school, as well. “My
fiancé and I are both in college and we wouldn't have been able to do that if
we stayed in retail,” Tyson says.
Amazon's job creation narrative got a boost in March when the
Progressive Policy Institute concluded that the e-commerce industry is adding
jobs more quickly than the retail sector is losing them. But the company
remains vulnerable to criticism that it’s distribution model means jobs are
concentrated in fewer pockets around the country.
El Paso has lost hundreds of retail jobs this year as Macy's, Sears and
other retailers shutter stores. Guadalupe Meyer, 51, watched the death of a
local Macy's first-hand. As she and her colleagues sold off the last of the
inventory, they discussed the fate of the only industry they knew.
”We'd talk about how everything is going to Amazon and asked ourselves
how we could get jobs there,” says Meyer, who has been applying at other
retailers and hotels. “Those are questions we still ask. If we get an Amazon
warehouse, I could gather a group of my colleagues and we're ready to work.”
But Amazon’s nearest warehouse is more than 400 miles away in Phoenix.
The situation in El Paso is so bleak that a local non-profit petitioned the
federal government for Trade Adjustment Assistance, long-term unemployment
benefits and education funds for displaced workers.
Such aid is usually reserved for workers affected by off-shoring, when
businesses close US factories and customer call centres and shift the work
overseas. But Joyce Wilson, who runs Workforce Solutions Borderplex, an
economic development agency in El Paso, says the aid should be broadened to
retail workers displaced by e-commerce.
”The federal government isn't paying attention to this,” she says.
“They're talking about coal mining and manufacturing and 19th Century jobs.
They aren't paying attention to what's happening in retail.” — Bloomberg
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