Amazon's impact on the economy should be positive — but there are some concerns

click to enlarge GSI's Todd Mielke is bullish on the fact that Amazon is coming to the region. - YOUNG KWAK
Young Kwak
GSI's Todd Mielke is bullish on the fact that Amazon is coming to the region.

For better or for worse, Amazon's forthcoming fulfillment center in Spokane promises to make a big splash on the economy. And if you ask Todd Mielke, chief executive of Greater Spokane Incorporated, the city's chamber of commerce, the ripples it creates will unquestionably be a good thing.

For starters, recruiting any business that will have over 500 employees is a win for Spokane, he says. Recruit one with three-to-five times that number of employees? That's even better.

"From the beginning, they become one of the largest employers in this region," Mielke says.

And then factor in what kind of jobs they are. It's important to have a wide array of job opportunities in a community, Mielke says, and this will give more options for unskilled workers.

Then, of course, there's the fact that it's Amazon, a big name that could grab the attention of other businesses looking to locate in the region — or, maybe Amazon itself might decide to bring more business here.

"This is one of the largest companies in the nation. In the world. And they've decided they will create a presence in Spokane," Mielke says.

But is it too good to be true?

Some research casts doubt on the positive impacts Amazon's fulfillment center will have.

One left-leaning think tank, the Economic Policy Institute, found that when Amazon opens a new fulfillment center, it creates more warehousing and storage jobs, but it's offset by job losses in other industries, nullifying any employment growth.

"In general, we do not find any evidence that the warehousing employment gains a county experiences after an Amazon fulfillment center opens translate into economically meaningful increases in the total number of jobs in the overall private sector," the report says.

An analysis by The Economist found that Amazon fulfillment centers drive down wages for warehouse workers by an average of 3 percent. Sometimes it's more: In Tracy, California, they dropped by 16 percent. In Chesterfield, Virginia, they dropped by 17 percent. Overall, in counties where Amazon operates a fulfillment center, the magazine found, warehouse workers earn about $41,000 per year; everywhere else, those workers earn $45,000 per year. (Amazon, meanwhile, has argued its warehouse jobs are more comparable to retail jobs.)

Doug Tweedy, a regional economist with the Employment Security Department of Washington state, says he doesn't know what to compare the jobs to until he sees a job description.

But he does say there is at least some connection between retail jobs and Amazon's fulfillment center jobs: The Spokane region has been losing jobs in retail trade because of people shopping on the internet. The fulfillment center should be able to fill that void.

"It's going to add to the local economy," Tweedy says. "The jobs that it brings are in a category we need."

Right now, Tweedy says it's impossible to know whether it will drive wages down in warehouse jobs, because nobody knows what the wages will be at the fulfillment center.

Overall, Tweedy envisions a positive impact to the community. Any jobs are good jobs for Spokane's economy. Spokane, he says, is positioned well for jobs in transportation and warehousing, and Amazon will likely attract more of those businesses to Spokane.

"I think it's a very important piece to our economy," Tweedy says.

The impacts of Amazon's arrival go beyond wages and jobs. Right now, Mielke says "there's a lot of speculation" about businesses opening up near the location of the fulfillment center.

It's kind of like a Costco opening up somewhere. It's bound to impact the immediate area around it. Think of daycare centers. Restaurants. Coffeeshops.

"What are people likely to do on their way to work or way out of work?" Mielke says.

There's also other companies that might support Amazon's fulfillment center. He points to businesses with shipping materials, or recycling companies.

Then there's more abstract impacts. Amazon offers good benefits, including supporting people going back to school, Mielke says. That's good for everyone down the road.

Ultimately, the main positive with Amazon coming to Spokane has to do with what Mielke calls the "roots of the community."

"One of the things we have excelled at for a long, long time, is we are a transportation hub," he says.

By air, rail or roads, Spokane serves as a center for the region's transportation needs. It bodes well for future development that Spokane was attractive to a transportation, logistics and distribution company. And the fact that Amazon's fulfillment center is located so close to the airport solidifies that standing.

In the grand scheme of things, Mielke dismisses concerns about wages. In his view, if you have the opportunity to bring Amazon to the area, with all the jobs it will bring, you do it.

"It is significant that you have one of the top companies in the nation looking to establish here," Mielke says. ♦

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About The Author

Wilson Criscione

Wilson Criscione, born and raised in Spokane, is an Inlander staff writer covering education and social services in the Inland Northwest.