Will Amazon actually drive wages down?

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.

Will Amazon have the same effect on wages in a town already with low wages in unskilled labor and very little unions;

A Bloomberg analysis of government labor statistics reveals that in community after community where Amazon sets up shop, warehouse wages tend to fall.  In 68 counties where Amazon has opened one of its largest 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 becomes the largest logistics player in these counties, so its size and lower pay likely pull down the average. Among economists, there’s a debate about whether the company is creating a kind of monopsony, where there’s only one buyer—or in this case one employer.

While Amazon’s arrival coincides with rising 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 in 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.



10 comments ↓

#1 "Very Stable Genius" on 12.28.20 at 9:52 pm

You know it’s bad when workers in Alabama want to start a union:

https://jacobinmag.com/2020/11/amazon-union-organizing-bessemer-alabama

#2 rufusx on 12.29.20 at 9:10 am

You say this: “a town already with low wages in unskilled labor and very little unions;” – implying this is the case in SF.

Then the study says this: “Amazon’s arrival coincides with rising pay in….. low-wage precincts”

So – uh….. doesn’t it seem that the study would tend to suggest wages may RISE in SF – that is , if your first statement is accurate??

Which one is it?

#3 rufusx on 12.29.20 at 9:16 am

Quite a few wage monitoring firms say that the average Warehouse worker wage in Sioux Falls is around $13/hr. If Amazon is paying $15/hr. that would tend to drive average warehouse worker wages UP here. Just sayin’.

Of course – $15/hr. is still a crap wage.

#4 D@ily Spin on 12.29.20 at 9:24 am

Amazon impact will be significant and positive at first. We’re not a wealthy community. There’s minimum wage workers that will get a raise or go to work there. Affording opportunity other than retail, fast food, or cubicle caller will be welcomed. Warehouse exercise will be healthy. There could be a problem in the future with labor getting organized but shouldn’t that have happened here sooner.

#5 Mike Lee Zitterich on 12.29.20 at 11:31 am

Probally need to learn the agreements and obligations that AMAZON agreed to upon accepting the Federal Grant. They agreed to provide $15/hour jobs for one.

Will it drive down wages in the community? Well that will rely on the fact that SMALL mom and pop stores can compete with Amazon’s low cost prices.

We do have precedent for these large Multi-National Corps coming to Sioux Falls and effecting jobs and wages – Look what happened when Walmart came to Sioux Falls let alone the State. They drove out tons of small businesses whom could not compete, let alone had to slash their prices to compete, and that meant small companies had to trim costs, and part of that is lowering wages let alone cutting employment all together.

So yes – Amazon is going to effect the future of Small Business in ways that will most likely effect wages predominantly in ways that will cost us jobs.

But then, as we have seen during COVID-19 – the Federal Government is so quick to push all “Business” into these Multi-National Corps such as Walmart, Amazon, Target, McDonalds, Burger King, Pizza Hut, Culvers, etc-etc; while placing restrictions on the economy that well … hurt Small Businesses whom now see a loss of revenues, which translates into loss of jobs, less hours, lower wages.

So you destroy a portion of the economy, to promote another portion of the economy.

Then that same government steps in and hands out $600, $1,200, and $2000 checks to the people, all of which means the “Govt” becomes or acts as an Employer in itself. Meaning they now can control the people.

As a small business owner myself, this sucks.

I do most my shopping for general items @ LEWIS DRUGS for a reason, to support small, locally owned businesses, even if I have to pay an extra $10 so be it; let alone if they do not have what I want, I ask them to find it, and I will pay them to get it.

#1 issue with the AMAZON issue is they are being SUBSIDIZED by both the Federal Govt; while the LAND OWNER – Sioux Falls Development Foundation is going to be rewarded a T.I.F meaning this entire project is subsidized by the American Citizens … Where will all this future tax dollars come from when ‘WE” destroy half of the small business community?

#6 Conservative Here on 12.29.20 at 12:04 pm

I believe Amazon will be a net Negative for the Sioux Falls area and South Dakota. While it will bring 1000+ jobs they will mostly be the $15 dollar an hour types which are plentiful in Sioux Falls. More often then not they will need to import from other areas people to work and then all we have done is bring more poverty level people to our community we have to support with our tax dollars. Amazon will probably benefit from sort of TIF, tax incentive, or infrastructure freebees to lower their cost. In the end WE will PAY for it
I am afraid their biggest impact will be to encourage people to buy more crap from Amazon because they can get their package a day sooner and that will have a HUGE impact on small and medium sized businesses in Sioux Falls and our state.

What I find ironic is that SO many people who complain about the rich and powerful tend to be the same people who love their Amazon packages. I know many Conservatives and Liberals who live off Amazon yet are always pissed about the Jeff Bezos of the world chewing us up and spitting us out. If people would only spend the extra $5 bucks or so here and there to support local vs Walmart and Amazon this world would be a much better place but, I am afraid many are too self absorbed with convenience and trying to save a buck short term that the long term outlook never creeps into their mind. If people are paying attention across this country small businesses are being shut down by their states yet Big Box stores are allowed to stay open because they are “essential” and these companies can weather the storm. When its all said and done we will have less choice and more big box and then they can start charging what they want once their competition is toast. I just find it sad more consumers cannot look long term and make different choices

This is one topic I completely agree with you on Scott, I don’t think this will be good for us at all

#7 union man on 12.29.20 at 2:07 pm

Unionize them.Get the Teamsters or the AFL-CIO in there.Lets get high paying wages in there.What does the slick Ten say about this.

#8 anominous on 12.29.20 at 6:39 pm

this will finally be the economic stimulus for that area out by the big pawn store that huether predicted i heard amazon let u wear rollerblade’s & u have to learn to pee in a bottle at work

#9 Darren Weisz on 12.30.20 at 10:31 am

I think the, already, not-affordable housing is going to become an even bigger issue. There are going to be a lot of people moving to SF to fill those 1,000 jobs. There are some cities topping 60% of income to cover housing. I foresee bad things for us renters.

#10 Warren Phear on 01.01.21 at 11:12 am

If the job reviews are any indication, the door to human resources at amazon better be a revolving one.

https://www.indeed.com/cmp/Amazon.com/reviews?fjobtitle=Fulfillment+Associate&ftopic=paybenefits