The Arkansas Democrat-Gazette caught up today with the Arkansas Blog’s Oct. 14 scoop that Amazon was building a one-million-square-foot distribution center near the Galloway exit from Interstate 40 in North Little Rock.
The D-G was favored with an advance look at the news release (gee, nobody called us or Arkansas Business, which also had reported on this earlier), perhaps because I’ve been something of a damp blanket on the cheerleaders for this and the previous Amazon facilities opened in Little Rock. Additional news today is that the state will provide $2 million for highway improvements to connect the site with U.S. 70 (chump change in the corporate welfare game but, as a retailer, Amazon doesn’t qualify for most of what Arkansas offers). Amazon also says about 500 jobs will be created by the facility, which will handle the shipment of larger items sold through the Amazon website.
It’s a huge capital investment. 500 jobs is a big number.
Said Governor Hutchinson:
“North Little Rock’s dedicated workforce and central location make it a perfect selection for Amazon’s newest distribution center. I’m delighted that Amazon has once again decided to invest in Central Arkansas, creating job opportunities for hundreds of Arkansans, and I’m confident that North Little Rock will be a perfect fit for the company’s project.”
Let’s get real. Our workforce is no more or less dedicated than workforces around the country where Amazon is building dozens of such facilities this year. Acreage ready for construction within shouting distance of a major interstate highway IS a draw.
It will be a huge capital investment. Hundreds will get jobs. What’s not to like?
Well, if you are in the conventional brick-and-mortar retail businesses that have been hollowed out by online retail, you might have a slightly different view. Building a facility for Amazon to ship lawn furniture doesn’t increase the number of lawn chairs sold. The lawn chairs sold by Amazon are lawn chairs that will not be sold by your favorite local supplier of outdoor furniture. The same for Amazon’s fulfillment center in Little Rock for smaller items. When it ships underwear to a Little Rock buyer, it’s not because there’s an increased demand for underwear. It’s because somebody chose Amazon instead of Dillard’s, Walmart or a friendly neighborhood retail store.
In short, what Amazon gives, it takes away. I have an acute understanding of this in a business (publishing) hollowed out by Google, Facebook and Amazon (which doesn’t buy much advertising in newspapers, nor do many others given what the Internet has done to retailing and newspaper advertising.)
There’s no stopping this dislocation in our lives, hastened in Amazon’s case by the pandemic. Admitted: My garage is full of broken-down Amazon boxes, which brought everything from dog food (yes, grocery stores are harmed, too) to potato chips (a certain brand of which doesn’t appear reliably on local shelves; just as I can’t count on finding a size 14EEE pair of walking shoes in a local retailer but I can on Amazon, delivered overnight.)
Also: don’t believe Amazon gets “recruited” in a race between one city or state and another and their highly compensated economic development officials. Amazon goes where they want to go for carefully studied reasons. It’s the job of the locals to bend over and say, “Thank you, sir! May I have another?”
One other thing: Amazon pays reasonably decent wages with reasonably decent benefits (particularly against struggling small retail operations.) But it isn’t exactly a bed of roses.
Amazon.com Inc. job ads are everywhere. Plastered on city buses, displayed on career web sites, slotted between songs on classic rock stations. They promise a quick start, $15 an hour and health insurance. In recent weeks, America’s second-largest employer has rolled out videos featuring happy package handlers wearing masks, a pandemic-era twist on its annual holiday season hiring spree.
Amazon’s object is to persuade potential recruits that there’s no better place to work.
The reality is less rosy. Many Amazon warehouse employees struggle to pay the bills, and more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time. As Amazon opens U.S. warehouses at the rate of about one a day, it’s transforming the logistics industry from a career destination with the promise of middle-class wages into entry-level work that’s just a notch above being a burger flipper or convenience store cashier.
Amazon fights unions, of course. Bloomberg reports that Amazon drives down wages in warehouses in cities where they locate, though it’s less damaging in the low-wage South.
Its assembly lines are hard work (in close quarters during the pandemic) at repetitive tasks. Where logistics was once seen as a path upward, Bloomberg reports skepticism about the ability to move up from entry jobs at Amazon. Worker churn is high.
Amazon’s success threatens such places as UPS, with unionized workers who are paid better and enjoy good retirement plans. The fear is that Amazon will do to delivery what it has done to warehousing by handling its own deliveries at a lower cost, some of them gig workers.
So, yeehaw, another Amazon warehouse with hundreds of jobs to go with two in Little Rock and a small delivery center in North Little Rock.
Just be cognizant of the totality of what you are cheering (including required secrecy from local officials, such as North Little Rock Mayor Joe Smith and the state, in the course of promising public money to aid a new competitor to local retailers).