With the arrival of Amazon in Baton Rouge, public sector employers feel pressured to raise wages | News

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 better-paying jobs for the more than 1,000 employees that the online retailer should hire were one of the benefits they touted the most.

But recently it has become a matter of concern.

If Amazon pays a minimum of $15 an hour plus benefits, that means its jobs will become the most attractive option for many workers, especially those in the public sector like the East Baton Public Works Department. Red and city-parish parks. -and-leisure system.

East Baton Rouge executives are already scrambling to raise salaries for the lowest-paid employees ahead of the completion of the distribution center, which is currently taking place on the site of the former Cortana mall. But raising salaries in the public sector is always about finding a stable source of income to pay for it.

Business sector experts say Amazon marks a shift in the right direction for the local job market. Employers, in the private and public sectors, will now feel compelled to raise wages to compete for talent.

“It’s the most progressive way to raise wages,” said Andrew Fitzgerald, senior vice president of business intelligence for the Baton Rouge area chamber. “You have a company that offers better salaries that are not typical in the industry and pressures others to do the same. This is the organic way for this to happen rather than the arbitrary way to try to do it through political wars to raise the minimum wage.”

A study published in 2021 by economists at the University of California, Berkeley and Brandeis University showed that when Amazon raised its minimum wage at a given establishment, companies in the same geographic neighborhood followed suit.

The researchers said these gains were directly tied to Amazon’s decision to pay $15 an hour and that big companies, like Target and Walmart, were able to compete by increasing their employees’ wages without cutting pay. ‘use.

According to previous reports, Amazon employees will receive full benefits on their first day – including medical, dental, vision, 401(K) savings with a 50% company match, plus 20 weeks of vacation paid maternity leave, six weeks paid paternity leave and six weeks leave for adoptive parents.

The distribution center should be fully operational by December. Amazon officials said they would start hiring two months before it opens.

The Cortana facility will be the largest robotic prototyping center for Amazon. Center employees will pick, pack and ship smaller household items like books, toys and cleaning supplies using the latest technology available to the company.

Fitzgerald acknowledges that the private sector often had better paying jobs than the public sector, but the pension plans that came with government jobs often made them more attractive to people.

He said BRAC doesn’t see much movement yet in terms of private companies changing tactics and raising wages because of Amazon.

“Right now they had to because of inflation and the smaller pool of job applicants,” he said.

But on the public side, conversations around Amazon’s impact on the labor market are in full swing.

Next month, BREC Superintendent Corey Wilson said he will present to the parks system board a proposal to raise pay for employees earning $10 or less to $12 by May. . And anyone making more than $12 an hour could also get a 3% or 4% increase in the cost of living.

“One of the first things I did when I started in 2019 was raise our minimum wage from $8 an hour to $10,” Wilson said. “It’s only been three years since this happened and $10 is something people are laughing at us now.”

After hearing Wilson’s initial proposal for salary increases last week, the BREC board of commissioners tasked him with finding a source of revenue to maintain the new pay rates before presenting a formal proposal. Wilson thinks it will take a little more or a little less than a million dollars.

The parks system is also conducting a compensation study this year to assess compensation rates in light of rising gas prices and inflation.

“Commissioner (Collis) Temple said to me, ‘Your compensation study is just down the road at Florida and Airline Highway,'” Wilson said, referring to Amazon’s new facility. “Listen, we’re glad Amazon is here. We understand that in order for us to continue to serve the community at the level we’re serving them now, we’re going to have to do things to keep our workforce intact.”

Similar conversations are taking place across the city at City Hall.

Darryl Gissel, the city-parish’s administrative manager, said they are currently reviewing compensation “at all levels”. Entry-level positions with the parish town start at $10 an hour, but Gissel said about 30 people are still paid at that rate — most of whom are in the Department of Public Works.

Over the past two years, the parish town has steadily increased employee salaries through 3% wage increases, with the police department securing the largest pay increases in recent years.

“For every 3% pay raise, it’s costing us about $6 million a year,” Gissel said. “It gives you an idea that in order to make pay raises, we need to find recurring revenue.”

The parish town’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 about benefits. long-term pension than by salary.

“Economically, it’s great for the market,” Gissel said of Amazon’s impending impact. “If we can generate and grow revenue, that’s always good for the whole economy. We’re going to have to figure out how we need to adapt to the changing workforce.”