With Amazon coming to Baton Rouge, public-sector employers feel pressure to raise wages – The Advocate

With Amazon coming to Baton Rouge, public-sector employers feel pressure to raise wages – The Advocate

Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
Work goes on at the construction site for the new Amazon facility at the site of the former Cortana Mall, Thursday, March 24 ,2022. Some are worried that high-paying jobs at the facility once it opens may impact the local job sector; some city-parish agencies and private businesses are worried that Amazon’s new facility might make it harder to hire employees for entry-level positions.
When state and local leaders announced last year that Amazon would build a $200 million, 3.8 million-square-foot fulfillment center in Baton Rouge, the higher-paying jobs for the 1,000-plus employees the online retailer is expected to hire was one of the benefits they touted the most. 
But recently it has become a point of concern. 
If Amazon is paying a minimum of $15 an hour plus benefits, that means its jobs will become the more attractive option for many in the workforce — especially those in the public sector like the East Baton Rouge Department of Public Works and the city-parish parks-and-recreation system. 
Leaders in East Baton Rouge are already scrambling to increase wages for the lowest-paid employees ahead of the fulfillment center’s completion, happening now at the site of the old Cortana Mall. But raising wages in the public sector is always about finding a steady revenue source to pay for it. 
Experts in the business sector say Amazon marks a shift in the right direction for the local job market. Employers, in the private and public sector, will now feel pressure to bump up pay to compete for talent. 
“This is the more progressive way to raise wages,” said Andrew Fitzgerald, senior vice president of Business Intelligence for the Baton Rouge Area Chamber. “You have a company coming in offering better wages not typical in the industry and that puts pressure on others to do the same. This is the organic way for this happen rather than the arbitrary way of trying to do it through political wars over raising the minimum wage.” 
A study released in 2021 by economists at the University of California, Berkeley, and Brandeis University showed that when Amazon upped its minimum wage in a given facility, companies in the same geographic vicinity followed suit.
The researchers said those gains were directly tied to Amazon’s decision to pay $15 an hour and that large corporate employers, like Target and Walmart, were able to compete by increasing their employee wages without driving down employment. 
According to previous reports, Amazon employees will receive comprehensive benefits on their first day — including medical, dental, vision, 401(K) savings with a 50% company match, along with 20 weeks paid maternity leave, six weeks of paid paternity leave and six weeks of leave for adoptive parents.
The fulfillment center is expected to be fully operational by December. Amazon officials said they’ll start hiring two months before it opens. 
The Cortana facility will be the largest robotics prototype fulfillment center for Amazon. The center’s employees will pick, pack and ship smaller household items like books, toys and cleaning supplies with help from the latest technology the company has.
Fitzgerald acknowledges that the private sector often had better paying jobs than the public sector, but that the retirement packages that came along with government jobs often made them more appealing for people. 
He said BRAC isn’t yet seeing much movement in terms of private companies changing tactics and increasing wages because of Amazon. 
“Right now they’ve had to do it because of inflation and the smaller pool of job candidates,” he said. 
But on the public side, the conversations around Amazon’s impact on the job market are in full swing. 
Next month, BREC Superintendent Corey Wilson said he’s presenting the park system’s governing board with a proposal to raise the pay for employees earning $10 or under up to $12 by May. And anyone earning more than $12 an hour could get either a 3% or 4% cost-of-living raise too. 
“One of the first things I did when I started in 2019 was raising our minimum wage from $8 an hour to $10,” Wilson said. “It’s just been three years since that and $10 is something people laugh at us about now.”
After hearing Wilson’s initial proposal about pay bumps last week, BREC’s Board of Commissioners tasked him with finding a revenue source to sustain the new pay rates before presenting a formal proposition. Wilson figures it’ll take a little more or just shy of $1 million. 
The parks system is also conducting a compensation study this year to evaluate pay rates given the rising gas prices and inflation. 
“Commissioner (Collis) Temple told me, ‘Your compensation study is right down the road at Florida and Airline Highway’,” Wilson said, referring to the new Amazon facility. “Listen, we are glad Amazon is here. We understand that for us to continue serving the community at the level we are serving them now, we’ll have to do things to keep our workforce in tact.” 
Similar conversations are taking place across town in City Hall. 
Darryl Gissel, the city-parish’s chief administrative officer, said they’re taking an “across the board” look at pay right now. Entry level positions with the city-parish start at $10 an hour, but Gissel said that just about 30 people are still being paid at that rate — most of whom are in the Department of Public Works. 
For the last couple of years the city-parish has gradually increased employees’ salaries through 3% pay bumps, with the police department getting the most substantial pay bumps in recent years. 
“For every 3% pay raise it costs us about $6 million a year,” Gissel said. “That gives you an idea that in order to do pay raises, we have to find recurring revenue.” 
The city-parish’s retirement benefits have been a draw in the past over its lower pay rates, but Gissel said things have changed and the new generation of workers aren’t as concerned with long-term retirement benefits as they are about pay. 
“Economically it’s great for the market,” Gissel said about Amazon’s impending impact. “If we can generate and increase revenue that’s always great for the whole economy. We’re going to have to figure how we need to adapt to the changing work force.” 
Email Terry Jones at tjones@theadvocate.com 
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