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As Sacramento Jobs Disappeared in COVID, Amazon Presence Grew

The pandemic put thousands of employees out of work, but Amazon doubled its workforce in California’s capital city to accommodate increased delivery demands. It is now the fourth leading nongovernment employer in the area.

(TNS) — As the pandemic exploded and thousands of jobs disappeared in Sacramento, one company mushroomed into one of the largest private employers in the region.

Amazon doubled its workforce in Sacramento over the past year, adding roughly 4,000 warehouse workers, package deliverers and others as COVID-19 devoured much of the rest of the economy and shoppers retreated from malls.

Inside the Amazon fulfillment center near Sacramento International Airport, employment grew from about 2,000 to more than 4,000 today, the center's manager Kyle Desautels said.

"Through the pandemic obviously what we've seen is a massive increase in customer demand," he said in an interview.

Amazon already was one of the area's major non-government employers. The pandemic sent it into elite territory. It moved ahead of such Sacramento-area mainstays as Intel, Raley's and Apple and climbed to fourth in employment in the area. It trailed only the Kaiser, Sutter and Dignity hospital chains, according to statistics compiled by the Sacramento Business Journal.

State government, of course, remains the area's largest single employer by far: 95,400 jobs in March, not counting the nearly 27,000 who work for UC Davis and Sacramento State.

Amazon's growth in Sacramento mirrors its expansion statewide. Since the pandemic began in March 2020, the company has hired about 60,000 Californians, bringing total employment in the state to 150,000.

The numbers speak to Amazon's evolution as a merchant. Less than a decade ago, its staffing in California was minimal — by design.

The company was locked in a nasty standoff with then-Gov. Jerry Brown and the Legislature over its refusal to collect sales tax from California customers. The U.S. Supreme Court had said a catalog merchant couldn't be forced to collect sales tax from a state's residents unless the company had a physical presence in the state. Amazon avoided building in California to remain sales tax-free.

But in 2011, Brown signed a bill forcing Amazon to charge sales tax, on the grounds that Amazon's affiliates in California — companies and nonprofits that earn fees referring their website visitors to Amazon — constituted a physical presence.

Amazon responded by getting rid of its California affiliates and launching a ballot initiative to overturn the law. But in 2012 the company dropped the initiative effort, made peace with its affiliates and forged a compromise with Brown. The Legislature agreed to delay the sales-tax law by a year. Amazon agreed to start charging sales tax on sales to Californians.

As part of the bargain, it also began building a string of warehouses around the state. The deal was touted as a jobs-development boost for California. But it also enabled the retailer to dramatically speed deliveries to customers as its Amazon Prime business was ramping up. The company made similar deals in other states.

The Sacramento warehouse opened in 2017. Amazon operates a total of 100 facilities in California, including fulfillment centers, sorting centers and smaller delivery stations, said spokesman Xavier Van Chau.

The pandemic fueled a 38 percent jump in Amazon's worldwide sales last year, to $386.1 billion. Now that the pandemic is easing, the economy is starting to return to normal and more consumers are expected to resume traditional shopping habits. Desautels said he couldn't make a prediction about future employment trends at Amazon.

Hourly workers at the Amazon warehouse start at $15 an hour, according to the company's website. Benefits include healthcare and a 401(k) plan.

Unions, injuries and COVID-19

Amazon's growth in recent years has strained relationships with its workforce, culminating in a serious effort to organize workers at the retailer's warehouse in Bessemer, Ala.

Despite support from the likes of President Joe Biden, the Retail, Wholesale and Department Store Union lost its bid to unionize the Bessemer plant. The outcome wasn't close — the Amazon workers voted by a 2-1 margin to remain nonunion — and the closely-watched result has touched off a round of hand-wringing among union activists.

The union filed a complaint with the National Labor Relations Board, accusing Amazon of illegally interfering in the election. The company has denied any wrongdoing and called the election results a testament to its willingness to listen to its employees.

"It's easy to predict the union will say that Amazon won this election because we intimidated employees, but that's not true," the company said. Our employees heard far more anti-Amazon messages from the union, policymakers, and media outlets than they heard from us."

The unionization drive might not end with Alabama. Bloomberg reported that warehouse workers in Southern California, as well as Baltimore, New Orleans, Portland and Denver, are contemplating forming a union.

Last year an employee at Amazon's San Leandro warehouse complained to media outlets that his efforts to form a union were consistently stifled by the company. The employee, John Hopkins, said management removed fliers he was posting about unionizing.

Part of what's fueling the union movement has been workplace safety. The news site Reveal has uncovered a significant increase in on-the-job injuries at its warehouses in recent years amid pressure to move packages out the door more quickly.

Reveal reported in 2019 that the injury rate in Sacramento was among the worst in the company, with 385 injuries recorded in 2018. More than half of the injuries in Sacramento required the employees to take time off, and the injury rate was well above average for the warehouse industry. The company said the high numbers in Sacramento reflected Amazon's "aggressive stance" on reporting every injury, regardless of severity.

Desautels said the explosion in business during 2020 didn't lead to an increase in the facility's injury rate.

But he said the emergence of COVID-19 did strain the Sacramento facility's ability to contain the virus.

Amazon had to reconfigure much of the building to foster social distance and keep workers safe from COVID-19. Desautels said Amazon had to move "things that were literally bolted down," while installing video screens to improve in-house communications.

Last October the company said almost 20,000 of its nearly 1.4 million employees had tested positive for the coronavirus, a figure that included workers at Amazon's Whole Foods subsidiary.

The Sacramento Bee reported that two of the Sacramento warehouse employees tested positive for the coronavirus in the early weeks of the pandemic.

Desautels wouldn't disclose how many workers have been infected in total, but said: "We were consistent with the community rate around us. .... I'm very proud of how we reacted so safety was our top priority."

(c)2021 The Sacramento Bee (Sacramento, Calif.) Distributed by Tribune Content Agency, LLC.
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