Amazon, one of the world’s largest and highest valued companies, has been expanding its operations all over the globe — including Utah. It was recently announced that a third operation will bring 300 new jobs to the state, though details about when and where the facility will be have yet to be released.
While the benefits of hosting a company like that have been praised by state leaders for spreading economic prosperity throughout the region, a recent report from the Economic Roundtable, a nonprofit research group based in Los Angeles, questions how great those benefits really are.
The report found that the trillion-dollar company’s presence in a four-county region in Los Angeles, where it was offered nearly $850 million in public subsidies, had negative impacts on the region’s infrastructure, environment and low-income workers.
Because warehouse workers in the area could not provide for their basic needs, they received an estimated $0.24 in public assistance for every dollar paid by Amazon, the report said. That comes out to about $5,245 a year per worker, the largest share of which comes from subsidized healthcare.
While there has not been a similar study in Utah, the report raises concerns about how the company will impact the state. Amazon currently runs a fulfillment center west of the Salt Lake City airport and has plans for another in West Jordan. The third operation will manufacture cloud computing components.
“Amazon is like the rest of the tech industry,” said Levi Pace, senior research economist at the Kem C. Gardner Policy Institute in Salt Lake City. “There are some very high-paying, exciting opportunities in it, but there's a bigger spread than you might think and a lot of low-end jobs that come along with that.”
Amazon is dealing with a growing backlash over the way workers are treated at their fulfillment centers, with concerns not only about low wages but also about exposure to dangerous working conditions. Mayor Jackie Biskupski has said she is disappointed that Amazon has not been a better community partner after coming to Salt Lake City.
The planned manufacturing facility is expected to bring in 300 high-skilled jobs with an average annual pay of $101,400, according to the Governor’s Office of Economic Development. And, according to Pace, the fulfillment center in West Jordan will pay an average of $82,250 to at least 130 of the 800 workers.
The remaining 670 jobs, however, fall somewhere below that. While exact numbers were not provided, many would likely start at the company’s base salary of $15 per hour – roughly $30,000 per year.
That’s a living wage, based on estimates from the Massachusetts Institute of Technology, but only if those workers don’t have dependents.
“It’s hard to see folks supporting another person on that kind of salary,” Pace said.
The lowest paying Amazon jobs would not be the lowest paying jobs on the Wasatch Front, where the cost of living is on the rise. They would pull down the Salt Lake County average wage though, according to Pace.
While difficult to live on, Pace said those jobs should give people an opportunity to learn new skills.
“The real question for me is whether [the warehouse jobs] lead to something else,” Pace said. “It's a wonderful first step for a lot of folks but after 18 months, after five years, where else do they go?”
There hasn’t been a study of that particular issue in Utah’s tech industry either, nor if and how workers at Amazon fulfillment centers elsewhere were able to move into better jobs.
The Economic Roundtable report calls for more publicly available data to fully assess Amazon’s impacts on the communities it touches.