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Amazon Plans Warehouse in Sioux Falls

Amazon plans to build a distribution center near the I-29/I-90 intersection in northwest Sioux Falls:

It’s four stories and 2 million square feet. It all falls under the Amazon Fulfillment Commissioning plan obtained by KELOLAND News.

The project has been kept under wraps, so much so, the builders from Minneapolis, Ryan Companies, have even given it a code name, Project Stampede.

…According to Ryan Companies’ website, the firm built a similar Amazon Center in Tucson, Arizona with similar square footage.

According to the plans, the completion date is scheduled for September of next year [Don Jorgensen, “Amazon Is Planning on Coming to South Dakota,” KELO-TV, 2020.08.04].

Amazon raised its minimum wage to $15 an hour on November 1, 2018, in part to recruit workers and in part to beat back political pressure and unionization efforts. This year Amazon has sunk over $4 billion into coronavirus response measures but just reported its second-quarter profits doubled to $5.2 billion.

In 2018, the Economic Policy Institute reported that Amazon warehouses increase warehousing employment in their host counties but do not appear to result in net job increases; they mostly take workers from other jobs, thus mooting the rationale for over $1 billion in state and local subsidies handed to Amazon through 2016. Studying Amazon’s impact prior to its adoption of the $15 minimum wage, EPI also found that Amazon warehouses did not result in a surge in wages:

We also investigated how a fulfillment center opening affected the earnings of warehousing workers, but we found an opening led to little to no change in these workers’ average wages. Estimates varied depending on the specification, but for the most credible specifications that had the smallest preexisting trends (using county-specific linear time trends) the effect of Amazon on warehousing workers’ earnings ranged from negative 1.7 percent to positive 0.5 percent…. None of these preferred estimates was distinguishable from zero at conventional levels of statistical significance.

These results differ from the findings reported in The Economist, which found that the earnings of warehousing workers rose prior to the opening of a fulfillment center and fell afterward, and that warehousing workers in counties with fulfillment centers in December 2017 earned 10 percent less than warehousing workers in counties without centers [Janelle Jones, and Ben Zipperer, “Unfulfilled Promises: Amazon Fulfillment Centers Do Not Generate Broad-Based Employment Growth,” Economic Policy Institute, 2018.02.01].

Not that we should sneeze at Amazon’s expansion and offer of jobs to the Minne-Linc metroplex. Amazon’s increased profits and employment amidst the pandemic, as well as South Dakota’s own increased reliance on online sales for goods and tax revenue (which will continue to grow even after we all get Dr. Fauci’s Wonder Shots), show that we need to open our doors to new industries as coronavirus and innovation creatively destroy our old industries.

But remember: Amazon warehouse jobs aren’t the high-tech jobs that keep DSU grads around town. Amazon warehouse jobs are grueling and irregular jobs in high-stress conditions:

Many people who start out at Amazon warehouses begin as “pickers.” These are the people who walk through the vast aisles in the Amazon warehouses where goods are stored, and, reading information from a handheld scanner, put items that have been ordered online into yellow bins, called totes. The scanner gives pickers an amount of time to “pick” an item based on where it is stored, and blue bars on the scanner count down the amount of time they have left to complete the task. Slightly more desirable than picking is stowing. “Stowers” take bins of items that have been shipped to Amazon and store them on the shelves for the pickers to grab when ordered. Other employees work as “packers.” They take items from yellow totes, scan them, grab a box and packing tape, the size of which is recommended by a computer, and pack individual customers’ orders, putting the finished boxes on a fast-moving conveyor belt.

The workers I talked to said that the problem with these jobs is not just that they’re physical or monotonous—which they are—but, rather, that Amazon puts an incredible amount of pressure on people to continue to work faster and faster. Many of the employees mentioned the fear of being “written up” and losing their jobs, which will thrust them into other low-paid jobs with fewer benefits. If pickers don’t grab an item in a certain amount of time, they get written up. If they take too long a bathroom break, they get written up. If they’re not walking as fast or performing as well as the majority of employees, they get written up. “You constantly feel like, ‘I’m not doing enough, I need to do a little more,’ and that’s their business model,” Burgett said. “The constant trying to chase your rate, trying to stay ahead of being written up—it affects you psychologically” [Alana Samuels, “What Amazon Does to Poor Cities,” The Atlantic, 2018.02.01].

Some Amazon workers say the pandemic has only exacerbated working conditions in their warehouses and that when workers try to protest those conditions, they are punished or fired. So in that regard, Amazon should fit right in with South Dakota employers.

 

9 Comments

  1. Scott Ehrisman 2020-08-05 09:33

    And you are correct that they will just steal workers from other similar businesses in Sioux Falls. Your workforce is limited when you have to try to find 500 people in Sioux Falls willing to work for $13-$15 an hour, pass a physical, drug test and background check. When this place opens, it will be quite the Sh*t Show watching them hire a full capacity workforce. At least they will have a Chic-A-Fil and Chilpolte to eat at.

  2. Cory Allen Heidelberger Post author | 2020-08-05 12:02

    Given the location, the warehouse will be in a great spot for commuting workers. I wonder: what percent of Amazon’s SD hires will come Dell Rapids, Colman, and Madison?

  3. Scott 2020-08-05 12:05

    Will ordering from Amazon now be considered “buying local”?

  4. Jenny 2020-08-05 12:08

    South Dakota is the perfect place for an Amazon location – low wages, Anti-Union (so they know their low wage workers will fall right in line) – just perfect for worker exploitation. A great tax haven for the billions they make every quarter. Sweet.

  5. Matt W 2020-08-05 12:31

    A company opens a business and pays better than most starter jobs, 15.00 dollars to start?

    Let’s try to be fair and understand that their pay minimum will push up a lot of salaries to keep the top performers.

    I am excited for Sioux Falls and South Dakota.

  6. grudznick 2020-08-05 18:21

    It sounds like this Amazon job would be great for people like mall walkers who like to walk and like to shop. They could pretend they are shopping all day and get all sorts of exercise. And the packers would be fun for people who like to wrap gifts at the holidays where gifts are given, like Thanksgiving and the December holidays. Maybe Amazon will pay $20 or $25 an hour for the good workers they can find in Sioux Falls. They might have to, so this is good. And who among you has not taken advantage of having a box put on your driveway with all the fancy trinkets you buy?

  7. Joe 2020-08-06 09:26

    grudznick obviously does not know anyone who’s worked at an Amazon Fulfillment Center as his narrative about the work there has no connection with the real world.

    Or, he’s trying, and failing to be funny once again.

  8. Debbo 2020-08-06 22:06

    I have heard many horror stories from people who work at Amazon warehouses. (“Fulfillment Center” sounds much nicer than “warehouse,” but that’s just corporate speak.)

    Relentless pressure and stress. Workers wearing diapers because they can’t take the time for a bathroom break. Running because the rigid time frame is too short. Concrete is a very hard surface, damaging to bones and joints over time.

    Amazon does not pay nearly enough for what they demand.

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