How Amazon Fulfillment Centers Fail to Deliver Jobs
A new study finds that Amazon does not bring as many jobs to the local economy as promised
Recently there has been a lot of news about the cities bidding on Amazon’s second headquarters. In their plans, cities are proposing tax cuts, and are touting their benefits with the hope that Amazon will bring high paying jobs to their communities, but if the headquarters are anything like their fulfillment centers, that will be a pipedream.
The Economic Policy Institute will be releasing a study that found that in counties where Amazon puts a warehouse fulfillment center, there is no net job growth. Although there is a 30% increase in warehousing and storage jobs in the immediate weeks and months after it opens, after 2 years any benefit has ended and job growth is back to what it was pre-warehouse.
Getting a fulfillment center in your county should be a big deal as these centers can employ 1,500 people. However, most of the jobs are low paying, with wages usually under $15.00 an hour. UCOMM has also covered the difficult working conditions and anti-union sentiments at Amazon. These low wages may be part of the reason that more jobs are not created in the county. With low wages and long hours, other businesses don’t spring up around the fulfillment centers.
As cities continue to bid and offer more tax breaks, the lack of jobs created may raise a red flag for some cities. For the tax breaks to pay off, many jobs need to be created both by the company and in secondary industries, like restaurants serving the new workers. This not only creates new jobs but provides the county with new residents who pay income tax, sales tax, and property taxes. With a net gain of zero, the massive tax breaks that Amazon is looking for simply won’t pay off.