COMP NEWS – New evidence shows that workers in warehouse jobs make less money – no matter where they’re employed – whenever an Amazon warehouse opens up in town.

Amazon is, after Walmart, the nation’s second-largest private-sector employer, employing roughly one million people in the United States. It might at first seem as though Amazon pays well, because counties with Amazon warehouses have higher average earnings than counties without Amazon warehouses. But it turns out that isn’t because Amazon pays well. It’s because, the NELP report says, Amazon chooses to locate most of its warehouses in high-earning counties (i.e., counties where average earnings exceed the eightieth percentile), apparently to situate them closer to wealthy Amazon consumers.

Amazon doesn’t furnish much detailed information about what it pays its warehouse employees, so NELP gathered its information indirectly through census data. It found that when you take pay for warehouse employees in high-earning “Amazon counties” (i.e., the high-earning counties where most Amazon warehouses are situated) and compare that to pay for warehouse employees in comparably high-earning “non-Amazon counties” (i.e., counties where there are no Amazon warehouses), the warehouse workers in the non-Amazon counties earn about 18 percent more. That translates into about $822 more per month. This pattern is repeated when you compare pay for warehouse employees in all “Amazon counties” (i.e., all counties where Amazon warehouses are situated, not just the wealthy counties) to warehouse employees in all “non-Amazon counties” (i.e., all counties that have warehouses in them, but no Amazon warehouses). Here, warehouse workers in the non-Amazon counties make about 12 percent more.

Data shows that the pay disparity between warehouse worker compensation began around 2005, when Amazon began expanding its warehouse facilities.

In the first quarter of 2005, Amazon had only three warehouses in the entire country. Today it has more than 300. NELP looked at what warehouse workers were paid before Amazon arrived and after. In 2005, warehouse workers in future Amazon counties made about the same as warehouse workers in future non-Amazon counties. The differences described above between warehouse workers in Amazon counties and non-Amazon counties didn’t exist until Amazon arrived. NELP also found that the gap between what warehouse workers were paid and average earnings in a given county grew after Amazon arrived. In non-Amazon counties, the gap remained about the same.

In his 2021 book Fulfillment: Winning and Losing In One-Click America, Alec MacGillis observed that warehouse jobs “used to be considered somewhat higher-skilled jobs: One could make over $20 per hour and stay years at a time.” But at Amazon, workers have “a more fleeting existence.” They’re younger, and turnover is much higher. Last month Amazon said it was raising its starting minimum pay to $17 per hour, which is pretty good, but, crucially, NELP notes, it didn’t index that minimum to inflation. Indeed, raises will be capped after three years. This is “by design,” NELP says, “as a way to foster high turnover and incentivize workers to leave.”

To read more about the data showing Amazon lowers warehouse compensation in its areas, click here.

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