Warehouse jobs are no path to the middle class


November 26, 2013
Brain & Behavior

When President Barack Obama visited an Amazon.com shipping facility in Chattanooga, Tenn., earlier this year — part of a tour titled “A Better Bargain for the Middle Class” — it took Juan De Lara by surprise. The appearance was meant to highlight the creation of blue-collar jobs in the logistics industry, key to every major retailer, including Amazon, Walmart and Target.

In the Inland Empire, the industry has been estimated to provide an average wage of $45,000 per year. But De Lara’s own research tells a very different story. His most recent study found blue-collar jobs in the region earned male workers just $23,000 per year; female workers earned even less, an average of $19,000 per year.

“When the president gets up there and says that this is an economic model that will allow us to move forward as a country, I immediately thought — ‘Right, except there’s a huge section of the workforce that doesn’t actually make the money touted in these industry-wide wages,’ ” said De Lara, assistant professor of American studies and ethnicity at the USC Dornsife College of Letters, Arts and Sciences.

He said the discrepancy can largely be attributed to the fact that many of the warehouse workers aren’t actually employed by major retailers like Walmart. Workers directly employed by the retailer — especially considering their larger numbers of white-collar workers — might earn an average of $45,000 per year. But most warehouse workers are actually employed by third-party logistics companies, many of whom have been faulted for labor law violations, another area De Lara has researched.

His study also highlighted the critical role that logistics has played in the Southern California economy. The industry employed more than 500,000 people in Los Angeles, Riverside and San Bernardino counties in 2012 and has long been seen by policymakers as a way to create blue-collar jobs in the aftermath of post-1980s manufacturing declines.

Private and public investments in port infrastructure lead to a booming warehouse industry. About half of warehouse space needed to meet future port capacity in Los Angeles and Long Beach was expected to be built in inland counties. Warehouse and residential construction made the Inland Empire into one of the fastest-growing metropolitan regions in the country during the past 30 years, De Lara said.

Nearly 80 percent of the people who moved into the region since 1980 were Latinos. What does the future hold for California’s largest demographic group? “Most Latinos in the region work in blue occupations. More than 50 percent of inland Southern California’s adult Latino population doesn’t have a college degree,” De Lara said. “So what’s the economic future for them in a region where warehouses and retail stores — both sectors with relatively low wages — are major employers?”

While policymakers certainly have a role to play, the real decision-makers may be the corporate retailers driving the industry.

Walmart in particular has incredible power when it comes to determining the structure of these economic sectors, De Lara said. Pressure put on them by advocacy groups and the media has changed their behavior in the past. As a result, Walmart has shifted to purchasing more American-made products and locally grown food due to increased media attention, as well as increasing its energy efficiency. When $2.8 million in labor law fines were imposed on logistics contractors this year, Walmart moved to distance itself from those companies.

It’s in their interest to do so, De Lara explained, and company officials have expressed concern over worker issues in the past.

“When Walmart makes a decision to make these types of changes, it has a tremendous effect, not only across the industry but across the economy,” De Lara said.

For USC’s faculty member, the question remains: “Will it turn a blind eye or take a leadership position and really have a positive effect on workers at large?”

Warehouse jobs are no path to the middle class


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