Remember the promise of the economic impact we were promised from the Events Center? It has actually been a drain on taxpayers and most of the profits made at the facility go straight out of town to the performers and promoters.
A Bloomberg analysis of government labor statistics reveals that in community after community where Amazon sets up shop, warehouse wages tend to fall. Â In 68Â counties where Amazon has opened one ofÂ its largestÂ facilities, average industry compensation slips by more than 6% during the facility’s first two years, according to data from the Bureau of Labor Statistics. In many cases, Amazon quickly becomesÂ the largest logistics player in these counties, so its size and lower pay likely pullÂ down the average.Â Among economists, there’s a debate about whether the company is creating a kind of monopsony, where there’sÂ only one buyerâ€”or in this case one employer.
While Amazon’s arrival coincides with risingÂ pay in some southern and low-wage precincts, the opposite is true in wealthier parts of the country, including the northeast and Midwest. Six years ago, before the company opened a giant fulfillment center inÂ Robbinsville, New Jersey, warehouse workers made $24 an hour on average, according to BLS data. Last year the average hourly wage slipped to $17.50.
I have warned people that once Amazon opens it’s warehouse in Sioux Falls you will see the job market turn upside down, overnight. We should be careful what we wish for.