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The Atlantic Offers Insight on Amazon’s Impact on Poor Cities, Quoting ILSR Experts

| Written by Nick Stumo-Langer | No Comments | Updated on Feb 1, 2018 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/the-atlantic-offers-insight-on-amazons-impact-on-poor-cities-quoting-ilsr-experts/

In the News: Stacy Mitchell

February 1st, 2018

Media Outlet: The Atlantic

The Atlantic staff writer Alana Semuels delves deep into a trend that most of the media is ignoring when it comes to online retail giant Amazon; what their physical infrastructure means for the poor communities it locates its fulfillment centers and warehouses.

In the constant firehose of information on what Amazon is doing to our economy, it can be hard to know what to read and take in. The Institute for Local Self-Reliance recommends this piece from Semuels to get a good sense of just what this giant is doing to communities across the country. For this story, Semuels dives deep into the experience of San Bernardino, California and what Amazon’s warehouses do to the warehouse job environment.

For the story, Semuels interviewed ILSR’s co-director and Community Scaled Economy initiative director Stacy Mitchell. For more information, you can read our comprehensive report on Amazon here: Amazon’s Stranglehold: How the Company’s Tightening Grip is Stifling Competition, Eroding Jobs, and Threatening Communities. Mitchell’s contributions are below:

Though Gabriel was doing the same type of work at Amazon, he had to shell out more money for health care, and made a lot less money. “I saw my brother doing the same type of work, but moneywise, he had better credit, he could afford more, while I was barely getting by,” Gabriel told me. He has tried to get a job with Stater Brothers to no avail, and says there are few other local options but at Amazon or at companies that work for Amazon. In 2016, he used Amazon’s tuition reimbursement to get his commercial driving license, attending school on the weekends while working during the week. But the best job he could find was working for a third-party contractor, driving a truck for Amazon. “It’s either Amazon or nothing,” he told me.

The lack of other opportunities for people like Gabriel Alvarado illuminates the problem these communities face when deciding to offer tax breaks and incentives to compete for Amazon to build warehouses in their towns. If these places don’t get a new Amazon facility, they won’t instead get companies like Stater Brothers that are willing to come in and pay double or triple the minimum wage for jobs that don’t require a college education. For many places, the choice is not between Amazon or another, better employer. The choice, instead, is Amazon or nothing. “There’s this way in which Amazon’s warehouses are perceived to be a good thing for a community, but that’s only because the context in which they are being proposed and built is so devoid of better opportunities,” said Stacy Mitchell, the co-director of the Institute for Local Self-Reliance, a nonprofit that advocates for sustainable community development. “It’s an indicator of how badly our economy is doing in terms of providing meaningful and valuable opportunities for people.” 

Current officials in San Bernardino maintain that Amazon’s presence has been a positive one. The new mayor, R. Carey Davis, told me that the city has seen a number of benefits since Amazon opened its first warehouse. The company has contributed hundreds of thousands of dollars to local schools and charities, for example. “The city of San Bernardino has found that Amazon has been a very good neighbor and private partner for the city of San Bernardino,” he said. Amazon’s presence has signaled to other cities that San Bernardino is a good place to locate, with qualified workers, and an efficient city government, said Mike Burrows, the executive director of the Inland Valley Development Agency and the San Bernardino International Airport Authority. It’s helped create jobs on the land once used by the Norton Air Force Base until it closed two decades ago. Amazon recently surpassed Stater Brothers, which had been the largest employer on the land formerly occupied by the air force base with 2,000 employees, according to the Inland Valley Development Agency.

Now, Amazon has 4,900 employees in San Bernardino.The arrival of Amazon may have been good for other businesses in the Inland Empire, but its effects on individual residents seem less positive. While warehousing and storage was one of the fastest-growing sectors in the Inland Empire over the past decade, adding 35,800 jobs, the area also has the lowest annual private-sector average wage out of the country’s 50 largest metropolitan areas. report from the Institute for Local Self-Reliance found that Amazon paid 11 percent less than the average warehouse in the Inland Empire; a similar analysis by The Economist found that workers earn about 10 percent less in areas where Amazon operates than similar workers employed elsewhere.

Read the full story here.