The Lehigh Valley, a Pennsylvania region 90 miles west of New York City, was home to the prosperous steel industry through the 20th century. Now, after more than a decade of decline following its collapse in the early 2000s, it’s become a boomtown again — this time for e-commerce, which is bringing in million-square-foot warehouses and much-needed jobs. But where is this trend ultimately heading?
The Lehigh Valley is composed of three Pennsylvania cities: Allentown, Bethlehem, and Easton. The area is full of sprawling suburbs, lakes, ski resorts, and Wawa convience stores — the brand being a local treasure that was born 50 miles south of the Valley. Seven years ago, the region was hovering around 10 percent unemployment. Now, the influx of e-commerce jobs at Amazon and Wal-Mart distribution centers has helped the region reach almost full employment among its unskilled workers, said former Mayor of Bethlehem and current President of the Lehigh Valley Economic Development Corporation Don Cunningham. The number of e-commerce jobs in the area has risen roughly 13.8 percent since 2012, his office said.
The location is ideal for shipping to the rest of the country; I-76, which runs from New Jersey to Ohio, and I-476, running north-south through the state, feed into a cluster of major arteries including I-95 up the East Coast, and I-70 and I-80 to the West. “We are right in the middle of everything in the East Coast where 40 percent of America's consumers live,” Cunningham told The Outline. “So it became the home quickly to Amazon and Wal-Mart.”
The revival is welcome, but the new jobs are neither as well-paid nor as steady as steel jobs once were. It’s also unclear how long they will last.
In the 1930s and 40s, the Bethlehem Steel Company was the biggest employer in the region, with 300,000 people working for the company. Its chief executive, Arthur B. Homer, was the highest paid executive in the country, according to the Chicago Tribune. Wages for Bethlehem Steel workers had tripled through the 70s; typical workers made more than $13 an hour, about $35 today adjusted for inflation. Workers received generous pensions and health benefits after they retired, but following the company’s bankruptcy, those plans were transferred to the federal government and decreased.
But once competitors in Germany and Japan rebuilt after World War II using the latest technology, they began to undercut Bethlehem Steel. “The reality was that heavy industry was leaving the United States. We were losing a lot of needle trades and a lot of the core manufacturing that was the driver of the economy for a long time,” Cunningham said. “We had to reinvent ourselves or we were going to die.”
In Lehigh County, Amazon is now the third largest employer, with three distribution centers across the region. Wal-Mart has a distribution center for its e-commerce sales in Bethlehem. FedEx plans to start work this year on its largest facility in the U.S. in Allentown, which will employ 600 people and process 75,000 packages an hour. That facility will be built on the grounds of the Lehigh Valley Airport, where three of the airport’s five cargo slots are reserved for Amazon. In the next two years the airport tentatively plans to double to 10 cargo slots to accommodate the influx of e-commerce traffic.
The warehousing and storage industry, a proxy for e-commerce jobs, employs 14,410 people in the area, according to the Lehigh Valley Economic Development Corporation — just a fraction of the former steel industry. The pay at these jobs is also much lower than it was for steel workers. At Amazon, warehouse workers make between $12 and $14 an hour, according to surveys on Glassdoor, and pensions are of course no longer standard. These companies offer benefits to full-time employees, but they employ a lot of seasonal and part-time workers. Amazon and Wal-Mart are also both notoriously anti-union.
The warehouse jobs are certainly less dangerous than steel jobs, but according to a former employee who worked at an Amazon warehouse in Breinigsville, the job is grueling. Employees are given quotas for the number of packages they have to retrieve from the shelves and deliver to sorting machines within a certain time period. Failure to meet these quotas can result in termination. Amazon utilizes a point system, and employees can rack up points for different infractions, like being late or not hitting quotas. If an employee receives enough points, they can be terminated.
There is another reason these jobs can’t bring back the prosperity of the past: They may not be around for long.
E-commerce warehouse workers are square in the crosshairs of the automation revolution; when politicians talk about robots stealing jobs, these are the jobs in question. As it stands now, robots work together with employees at Amazon fulfillment centers to complete orders. Employees called pickers, who are tasked with literally picking items off shelves to be sorted and sent to customers, now use robots to help them pick items quicker. Jeff Bezos has insisted Amazon wants humans to work in its warehouses, saying that humans can learn how do complex tasks fast than robots, but there is no question that the bulk of the work will be done more efficiently by machines. The company is even offering cash prizes through the Amazon Robotics Challenge to researchers who can build robots that automate the jobs, like picking and sorting, that are currently fulfilled by human employees.
“This is not a Lehigh Valley issue. This is an American issue and a it's a global issue,” Cunningham said. “I don't know when robotics are going to take away all those jobs but I know it's going to happen someday.”