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1. AMAZON WAREHOUSE JOBS UPDATE
2. AMAZON WAREHOUSE JOBS SERIES

AMAZON WAREHOUSE JOBS SERIES

This finding of no effect is also robust to a series of statistical controls. It is possible that the jobs created in the warehousing and storage sector are offset by job losses in other industries, or that the employment growth generated by Amazon is too small to meaningfully detect in the data. Two years after an Amazon fulfillment center opens in a county, overall private-sector employment in the county has not increased. The opening of an Amazon fulfillment center does not lead to an increase in county-wide employment.

This effect is robust to numerous statistical controls. Two years after an Amazon fulfillment center opens in a county, warehousing employment in the county is approximately 30 percent greater. The opening of an Amazon fulfillment center leads to an increase in warehousing and storage employment in the surrounding county.Our key findings show that luring Amazon fulfillment centers is an ineffective strategy for boosting overall local employment Using publicly available data on the opening of these fulfillment centers, we undertook a rigorous statistical assessment of claims that the opening of an Amazon fulfillment center in a specific county will provide broad employment gains to that local area. Studying the employment effects of opening Amazon fulfillment centers is an excellent opportunity to provide evidence for this debate. And as Amazon has grown, the debate in some cases has specifically focused on Amazon. The results on whether these types of community development strategies have a positive impact on job creation and growth is highly debated in popular news outlets and among researchers. In nearly every state, businesses can receive a significantly lighter tax burden for constructing a sports stadium, filming a movie, or building a manufacturing assembly plant. Using tax and other incentives to lure businesses to state and local areas is a long-running economic development strategy pursued by subnational governments.

According to The Washington Post, the announcement of the finalists in the running for hosting the new headquarters “also raised more difficult questions about the influence of large tech giants on cities and the possible unintended consequences of giving tax breaks and other benefits to an already successful corporate titan.” 3 For example, the District of Columbia reportedly offered Amazon a permanent corporate tax rate cut as well as sales tax exemptions. As Amazon looks to open a second headquarters in 2018, it is employing a similar strategy, on a much larger scale, exchanging tens of thousands of jobs for massive incentives in return. 1 In return for the incentives each of the fulfillment centers receives, Amazon claims to create hundreds of jobs with competitive pay and benefits. By the end of 2016, Amazon had likely received over $1 billion in state and local subsidies for its facilities, which would include not only fulfillment centers but “sortation” centers that only sort packages, mailing centers, and other facilities. The expansion of Amazon’s physical distribution network has coincided with a strategic business plan of negotiating millions in tax abatements, credits, exemptions, and infrastructure assistance from state and local governments in the name of regional economic development. (See Appendix Table 3 and methodology for data sources). In 2017, publicly available data identified 95 Amazon fulfillment centers in 25 states. Current estimates suggest that fulfillment centers occupy over three-fourths of the total square footage of Amazon’s entire U.S. Since its founding in 1994, Amazon’s network of fulfillment centers has grown to nearly 100 across the country. We re-ran our analysis and found that the updated data confirm our previous results.

AMAZON WAREHOUSE JOBS UPDATE

Update a s of March 1, 2018: Since we ran our original analysis, additional data on fulfillment center openings has become available.