Amazon Distribution Center and its Economic Impact on the City of El Paso
By: Karla C Hernandez
(Credit: Blog:Edited)
In July 2020, Amazon announced its plan to open its first fulfillment center in El Paso. The 625,000 sq. foot El Paso facility located near Eastlake, sits midway between existing warehouses in San Antonio and Phoenix. Amazon officials estimated that the employment level in El Paso was going to reach 800 workers. And according to many local officials such as Mayor Leeser and County Judge Samaniego, “fulfillment center will give economic boost to the entire Borderland.”
Without a doubt, Amazon has quickly become one of the leading employers in the United States, generating hundreds and thousands of jobs. The company itself has come out and said it is now the top job creator in the U.S.- already creating half-million jobs. The jobs at a fulfillment center having a starting minimum pay of $15 per hour. Coupled with the high wage rate, employees have benefits such as full medical and dental insurance, 401k with a 50% match, college tuition reimbursement, and flexible scheduling. At the fulfillment center, employees work with robotics to pack and ship books, electronics, toys, and other small items to Amazon customers. Working for Amazon is a great job prospect and highly enticing for employees. Local leaders and economic developers claim that the Amazon presence will generate broad based growth and create hundreds of jobs in the borderland. Even though an Amazon Fulfillment Center does bring new jobs, job growth then stagnates and no new net jobs are created.
In continuation, when Amazon opens a new fulfillment center the host county gains roughly 30 percent more warehousing and storage jobs, but no new net jobs overall, as the jobs created in warehousing and storage are likely offset by job losses in other industries. The opening of an Amazon fulfillment center leads to an increase in warehousing and storage employment in the surrounding county. As well, fulfillment centers lead to substantial gains in warehousing employment, but the new fulfillment centers do not clearly increase total private-sector employment in the county. Furthermore, the increases in warehousing employment after a fulfillment center opens do not seem to generate any employment benefits beyond the warehousing and storage sector.
To support these claims about the Amazon fulfillment center’s impact on employment in El Paso County, the Economic Policy Institute conducted a research study on the impact of the Amazon fulfillment centers for regional economies. The Economic Policy Institute (EPI), an American think-tank examines the economic impact of policies and proposals, that counties that have Amazon fulfillment centers do not observe a boost in the local economy as promises. Some of the key findings from their study included that Amazon fulfillment centers that opened in counties in the last 15 years aren’t generating broader employment growth. As soon as the fulfillment center hired their 750-800 employee’s employment would peak and no new employment would be generated. And even these employees are not new jobs per say, they are job seekers who are just moving from different industries into the warehousing and packaging industries.
This has been the case in many counties with Amazon fulfillment centers. However despite the small net job growth, many small businesses are worried. Many small businesses and other industries are struggling dealing with the labor force shortage, they fear that the arrival of a new fulfillment center will just add to their struggles. In a case study performed by the Reno City Economic Development Department, the city found that many industries and businesses were struggling to hire workers due to the COVID-19 pandemic and the new fulfillment center was not
helping. In Reno City, it was found that restaurants and construction companies are having a hard time hiring people. Coupled with that, they were having trouble retaining workers, and many are seeing retention rates completely fall off. Officials from other cities with Amazon fulfillment centers say that Amazon’s presence has inceased the pressure on employers to raise pay to recruit and retain employees.
Though Amazon boasts of supporting hundreds of thousands of fulfillment works, many data from economic development departments and local employment data suggest that, Amazon has eliminated about 149,000 more jobs in retail than it has created in its warehouses.
In conclusion, the arrival of the Amazon fulfillment center is a convoluted contribution to our community. Many communities across the nation have not experienced the exponential growth promised by Amazon through the arrival of a fulfillment center. However, despite the drawbacks of an Amazon fulfillment center, it is a good attempt at a step forward to developing our community and generating growth.
In July 2020, Amazon announced its plan to open its first fulfillment center in El Paso. The 625,000 sq. foot El Paso facility located near Eastlake, sits midway between existing warehouses in San Antonio and Phoenix. Amazon officials estimated that the employment level in El Paso was going to reach 800 workers. And according to many local officials such as Mayor Leeser and County Judge Samaniego, “fulfillment center will give economic boost to the entire Borderland.”
Without a doubt, Amazon has quickly become one of the leading employers in the United States, generating hundreds and thousands of jobs. The company itself has come out and said it is now the top job creator in the U.S.- already creating half-million jobs. The jobs at a fulfillment center having a starting minimum pay of $15 per hour. Coupled with the high wage rate, employees have benefits such as full medical and dental insurance, 401k with a 50% match, college tuition reimbursement, and flexible scheduling. At the fulfillment center, employees work with robotics to pack and ship books, electronics, toys, and other small items to Amazon customers. Working for Amazon is a great job prospect and highly enticing for employees. Local leaders and economic developers claim that the Amazon presence will generate broad based growth and create hundreds of jobs in the borderland. Even though an Amazon Fulfillment Center does bring new jobs, job growth then stagnates and no new net jobs are created.
In continuation, when Amazon opens a new fulfillment center the host county gains roughly 30 percent more warehousing and storage jobs, but no new net jobs overall, as the jobs created in warehousing and storage are likely offset by job losses in other industries. The opening of an Amazon fulfillment center leads to an increase in warehousing and storage employment in the surrounding county. As well, fulfillment centers lead to substantial gains in warehousing employment, but the new fulfillment centers do not clearly increase total private-sector employment in the county. Furthermore, the increases in warehousing employment after a fulfillment center opens do not seem to generate any employment benefits beyond the warehousing and storage sector.
To support these claims about the Amazon fulfillment center’s impact on employment in El Paso County, the Economic Policy Institute conducted a research study on the impact of the Amazon fulfillment centers for regional economies. The Economic Policy Institute (EPI), an American think-tank examines the economic impact of policies and proposals, that counties that have Amazon fulfillment centers do not observe a boost in the local economy as promises. Some of the key findings from their study included that Amazon fulfillment centers that opened in counties in the last 15 years aren’t generating broader employment growth. As soon as the fulfillment center hired their 750-800 employee’s employment would peak and no new employment would be generated. And even these employees are not new jobs per say, they are job seekers who are just moving from different industries into the warehousing and packaging industries.
This has been the case in many counties with Amazon fulfillment centers. However despite the small net job growth, many small businesses are worried. Many small businesses and other industries are struggling dealing with the labor force shortage, they fear that the arrival of a new fulfillment center will just add to their struggles. In a case study performed by the Reno City Economic Development Department, the city found that many industries and businesses were struggling to hire workers due to the COVID-19 pandemic and the new fulfillment center was not
helping. In Reno City, it was found that restaurants and construction companies are having a hard time hiring people. Coupled with that, they were having trouble retaining workers, and many are seeing retention rates completely fall off. Officials from other cities with Amazon fulfillment centers say that Amazon’s presence has inceased the pressure on employers to raise pay to recruit and retain employees.
Though Amazon boasts of supporting hundreds of thousands of fulfillment works, many data from economic development departments and local employment data suggest that, Amazon has eliminated about 149,000 more jobs in retail than it has created in its warehouses.
In conclusion, the arrival of the Amazon fulfillment center is a convoluted contribution to our community. Many communities across the nation have not experienced the exponential growth promised by Amazon through the arrival of a fulfillment center. However, despite the drawbacks of an Amazon fulfillment center, it is a good attempt at a step forward to developing our community and generating growth.
