Fears build that Amazon could vacuum up employees

The 1-million-square-foot fulfillment center in southeast Salem, pictured on June 21. The Seattle-based online retailer is expected to hire 1,000 people soon to staff it. (Troy Brynelson/Salem Reporter)

If business is a jungle, Dean Craig sees a coming shakeup in Salem’s food chain.

One of the biggest companies in the world, Amazon, has landed. The Seattle-based online retailer is slated to open its 1-million-square-foot fulfillment center this summer. Company officials tell Salem Reporter that, any day now, applications will open for 1,000 new jobs.

Besides new jobs, the company is also bringing ripples of economic change. The labor market is tight, and workers are hard to find.

Craig said many businesses are wondering, where will Amazon’s new employees come from? Or from whose companies?

“It’s scary when a big animal comes on your block,” he said.

Craig is Willamette Workforce Partnership’s business services director, helping companies in the mid-Willamette Valley respond to arising challenges.

The latest challenge: a dearth of manpower. The unemployment rate in Oregon is hovering just over 4 percent, according to the Oregon Employment Department. That’s a near-historic low.

“It’s tough to think of any real recent times that you’d say the labor market was this tight,” said state economist Pat O’Connor. Looking at employment figures for the last three decades, he said the market is “as tight as it’s been.”

In May, the Employment Department reported current employers are already having a difficult time filling positions. Last year, private companies in the state had roughly 58,000 job vacancies.

“There is no longer an army of unemployed Oregonians waiting around for a job,” said state economist Josh Lehner.

With Amazon gearing up, Craig said new businesses in the region — which he called a “hotbed” for warehouse and distribution industries — are especially worried.

“Everybody is anxious, but nobody knows what’s going to happen,” he said.

What is known is that Amazon will soon staff up in a big way, offering jobs paying at least $15 an hour. The benefits include retirement, help paying for school and lengthy maternity and paternity stays, according to spokeswoman Shevaun Brown.

Working at Amazon’s fulfillment center also won’t demand much prior experience.

“Honestly, a high school diploma or equivalent, and you need to be 18 years old or older,” she said. “If you have a bachelor’s degree, that’s not a bad thing by any means, but we do focus a lot on training from within. There’s no specific educational threshold that people need to meet to even be considered for these jobs.”

There are job postings typical of any private enterprise — managers, human resources staff, IT specialists — but the bulk of work will go to warehouse work, Brown said.

The center, at 4775 Depot Ct. S.E., will be a way station for everything from home decor to eight-person hot tubs, Brown said, delivering from Bend to the Oregon coast and down to northern California.

Running that will be people to take goods off trucks, move them in and out of storage and packaging them to head to the customer. It will blend human work with automation, Brown said.

“This site does use a lot of technology. It doesn’t have robots per se but it does have powered industrial trucks,” she said. “But people underestimate how much critical thinking and analytical skills that our Amazonians bring and is key to all of our operations. Without people, nothing is going to happen.”

More jobs is good news for workers, Lehner said.

“But whether that means it’s bad news for other companies, that’s a harder thing to say,” he said.

The fulfillment center in Salem pictured on June 21. (Troy Brynelson/Salem Reporter)

Troutdale, which opened an 850,000-square-foot fulfillment center in 2018, may provide a case study. However, the center opened too recently, and it is encompassed by the vast Multnomah County economy, so impacts are harder to measure, said state economist Christian Kaylor.

“I think it’s still pretty early for us to know. It’s still pretty fresh,” he said. “That said, I think they had to hire at least 1,000 people six months ago and I’m sure they had to fight to get those 1,000 people by paying pretty good wages.”

It’s unclear if that has pinched other businesses, but workers appear to be reaping the rewards, if advertisements are any indication.

Billboards now line Marine Drive, connecting Troutdale to Portland proper, advertising $15-an-hour jobs, according to Kaylor, showing that “companies are clearly working hard to attract folks,” he said.

Job postings at coffee shops, too, aren’t offering below $15 an hour, said City Manager Ray Young.

“In my experience the last year or two, I haven’t seen hardly any jobs offered for straight minimum wage,” he said. “It allows our citizens to find jobs closer to home that pay better.”

In Salem, companies are reportedly raising wages. If they aren’t, workers are already showing a willingness to go get it themselves – even if it’s for fractions of a dollar, said Kim Parker-Llerenas, executive director of Willamette Workforce Partnerships.

“There’s already turnover,” she said. “Employees are willing to go get a different job for 10, 15, or 20 cents more an hour.”

“When a company comes in like Amazon, offering $15 across the board, it definitely gets attention. We’ve heard it a lot,” she said in a later email.

The effect isn’t limited to warehouse jobs, O’Connor said. Workers from any sector could be compelled by a higher wage to apply.

“Some industries may not (lose workers)… but brick-and-mortar employers, some of those workers, with similar skills and a certain wage, might look at opportunities at Amazon,” O’Connor said.

In Marion and Polk counties, there are approximately 77,000 jobs that pay less than $15 an hour, according to state economic data. Many of them are in retail, leisure and hospitality, manufacturing and natural resources. Another 40,000 jobs pay between $15 and $20 an hour. State data doesn’t account for benefits, however.

Many businesses reached for this article did not want to talk on the record about their concerns. At a thunderous mill in the 1,200-person town of Lyons, however, an executive at Freres Lumber Co. spoke frankly.

Kyle Freres, vice president of operations at Freres Lumber Co., in his office at the mill in Lyons. Freres said Amazon’s arrival will make it harder to land entry-level workers. (Troy Brynelson/Salem Reporter)

Kyle Freres, vice president of operations, said the tight labor market already made it harder to find entry-level workers and Amazon’s arrival will ratchet that up — especially since Freres recruits workers right in the fulfillment center’s orbit.

“It’s obviously a big concern for us,” he said. “That Amazon facility is right there in Salem where we’re pulling a lot of our employees from. The commute matters. It’s the cost of time and gas. Having Amazon a short stop away is definitely a concern.”

Freres, however, said the wood products industry is accustomed to outside economic forces, like federal regulations that reduced timber supplies since their peak in the 1970s and ‘80s. The company still employs close to 500 people with good benefits and cost-of-living raises, he said.

It’s mostly entry-level work that’s hard to fill, he said.

“We do get a lot of turnover in our entry-level positions,” he said. “It’s always been the case, but with low unemployment it’s harder to pull people from outside our area. It’s just more competitive. We’ve adjusted our wages over the last few years, especially, to attract people.”

For some jobs, he said it’s easier for his company and others in the wood products industry to look to automation.

“Technology is changing every day. It opens up new opportunities for automating certain tasks,” he said. “But in a lot of ways, we’re still a manual, hands-on industry.”

Craig said he is hearing something similar. He said at least 10 local distribution companies have asked him to help organize a sit-down with specialists in helping companies become leaner.

“It’s really just educational,” he said. “They want to know if they’re as efficient as they can be. They want to know if they’re as automated as they can be. It’s not just Amazon, it’s a fear that we’re not replacing our vacating workforce.”

Automating isn’t cheap, Freres said. The company recently spent $30 million on a new facility to manufacture mass plywood panels that they hope to become a major product in construction.

“We’ve been in business for a hundred years and we’re going to do our best to stay in business for another 100 years,” he said.

Kyle Freres, left, overlooks automated machinery at Freres Lumber Co.’s new $30 million facility near Lyons. (Troy Brynelson/Salem Reporter)

Have a tip? Contact reporter Troy Brynelson at 503-575-9930, [email protected] or @TroyWB.

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Number of jobs by sector in Marion and Polk counties paying less than $15 an hour. (Troy Brynelson/Salem Reporter, source: Oregon Employment Department)