YORK COUNTY, Pa. (WHTM) — Like two of its other Pennsylvania fulfillment facilities and unlike a third, Chewy’s newest Midstate warehouse will rely on hundreds of warehouse workers. The question: Which of the others will future warehouses, whether belonging to Chewy or other companies, more closely resemble?
It’s a question that matters more in the Midstate than almost anywhere else in America because warehouse wages are a bigger part of overall wages here than almost anywhere else. This — for the third quarter of 2020, the most recent period of available — is what’s called the “wages location quotient” of the “warehousing and storage” sector for areas within the Midstate, compared to the state and country. The average is 1.0; anything above that is above average for the U.S.:
| Area | How much more important than the U.S. average* |
|---|---|
| Chambersburg-Waynesboro | 10.7x |
| Lebanon | 6.2x |
| Harrisburg-Carlisle | 5.3x |
| Lancaster | 3.6x |
| York-Hanover | 2.9x |
| Gettysburg | 1.8x |
| Pennsylvania | 1.8x |
| United States | 1.0x |
Only Gettysburg is about average for the state, although warehousing/storage is nearly twice as important in Pennsylvania as in the U.S. overall. (Warehousing/storage is least “important” by this measure in Montana, among all states; it has a quotient of just 0.1.)
The new 732,000-square-foot facility in Lewisberry is Chewy’s fourth in Pennsylvania but only its third — alongside its facilities in Mechanicsburg and Hanover Township (near Wilkes-Barre) — employing hundreds of traditional warehouse workers. Unlike those three and all of Chewy’s other roughly dozen sites across the country, its facility in Archbald, near Scranton — which opened in 2020 — is automated, requiring (based on statements to investors) significantly less labor than the other centers.
Chewy hasn’t disclosed how many employees the Archbald facility — which it called a “state-of-the-art facility” that would “raise the bar on future upgrades to our fulfillment network” — would have compared to others. But its CEO Sumit Singh did tell investors in April 2020, before the Archbald facility opened: “Automating the Archbald fulfillment center will enable us to increase throughput capacity of this building versus similarly sized facilities by more than 25 percent, increase labor productivity by more than 50 percent and as a direct result of all of the above, enable us to further lower our fixed and variable fulfillment cost per unit by over 30 percent.”
A Chewy spokesperson declined to comment to ABC27 News for this story, beyond confirming that the Lewisberry facility would not be automated like the Archbald one. Billboards around York County encourage people to apply for jobs, which the billboards say pay between $14.50 and $18.50 per hour, or more than double Pennsylvania’s minimum wage.
Could good jobs like those be a thing of the past if companies continue to automate their warehouse operations?
Stephen Herzenberg, the executive director and an economist with the Harrisburg-based Keystone Research Center, disagreed with part of the premise of the question. “Warehouse work is extremely demanding work,” he said. “It’s paid better than it was let’s say a decade ago, but it’s not what I would call well-paid.”
And that, he said — however counterintuitive this might seem — is why fully-automated warehouses won’t be ubiquitous for at least a decade.
“There’s a lot of exaggeration about how quickly warehousing work is going to be automated,” he said, precisely because the workers just aren’t that expensive for companies in historical terms. By comparison, an early-1980s unionized worker at long-defunct Bethlehem Steel’s factory in Steelton, Pa., would have earned more than $35 per hour in 2021, he said, citing an example of past working-class jobs that didn’t require a college education.
Beth Gutelius, research director at the University of Illinois-Chicago’s Center for Urban Economic Development, mostly agreed, although she said “I think the sort of counterargument to that is that for many years, warehouse employers have said they cannot find enough workers to do the jobs.”
That, in turn — Gutelius said — would encourage capital investment in automation in exchange for long-term labor cost savings. But she said the larger truth is that if companies are struggling to fill the jobs in an economy in which not everybody is employed, then that corroborates Herzenberg’s assertion that the jobs aren’t as good as companies tout.
Gutelius disputed another argument that companies sometimes make to support automation: that automation reduces workplace injuries.
“It’s not just about wages,” she said. “A big part of the story here is about health and safety. The injury rate in warehousing is about twice the rate for the rest of the private industry in this country. And it seems as though — it appears as though — the health and safety risks actually increase when automation comes in.”
She said that’s because rather than making a job easier on workers automation is “often coupled with work speed-ups and increases in the workload and the pace of work.”
