“Fulfillment” Centers

By Lloyd Graff

Like desert marigolds flowering out of nowhere, 4 million square feet of new buildings are going up simultaneously this week in the primarily African American South Suburbs of Chicago where I live and work.

Twenty miles north of here in Englewood, where my dad grew up and attended High School, people are shooting at each other every night and connecting with disturbing accuracy. The daily carnage is staggering and overflowing into the expensive Magnificent Mile of North Michigan Avenue, leaving it looking like Beirut’s downtown.

Amazon loves the South Suburbs. They already have built half a dozen fulfillment centers in the area and are building two more. One of them is within walking distance of Graff-Pinkert, and the other is near my favorite corn stand. The Logistics Center of 2 million square feet, consisting of four expandable buildings, is also in walking distance. It is located on a 102-acre site, which was supposed to be an outlet mall until Amazon growth killed that idea. Its closest neighbor is a multi-story apartment building, built just a few years ago, which accepts people who have lost their jobs and have nowhere to go. The developers jumped on the site when they could put together $29 million dollars in tax subsidies from the village and county, plus the tax advantage of being in a designated Opportunity Zone with the recent tax law changes.

Add in cheap mortgage money and a great location between two interstates, plus an abundance of inexpensive workers with lousy job prospects in the neighborhood—and bring in the excavators. 

The broker for the logistics project says there is an industrial real estate boom taking place, with Amazon picking up half of the new space in Chicagoland.

What is it like for the $15 per hour people who are drawn to the thousands of Amazon jobs, before the robots make them obsolete?

A woman who used to clean our friend’s house went to work for Amazon in Joliet a half hour west of the new fulfillment centers. Her work consisted of opening boxes 10 hours a day, four days per week. She wanted the job because it was her first opportunity for full-time work that offered health insurance. It was also an opportunity to get free tuition at a local community college if she worked for Amazon for 18 months.

It was demanding physical work and took its toll. Both of her hands absorbed enough punishment to require surgery. Her dream of training to become a nurse’s assistant sterilizing instruments was postponed by these injuries.

2-Million-Square-Foot Logistics Center

I am a capitalist, an investor, and a happy customer of Amazon. I think Jeff Bezos is a genius who has enriched me and my family because I invested in Amazon stock over 10 years ago and have held on to it. Bezos himself was born to a 17-year-old mother. His father, who he barely knew, owned a small bike shop in Albuquerque. His mom got an education, moved to Florida, and married into an upper-middle-class world. Jeff went to Princeton but he started Amazon on a prayer, and it is now worth hundreds of billions of dollars.

Our former cleaning person will not be taking another job at Amazon with her damaged hands. The two new 865,000-square-foot fulfillment centers will each hire a thousand workers for bigger packages, but Amazon has proudly announced that the buildings are built for robots when they become more capable.

The South Suburbs, the stepchild of Chicago real estate, is finally bustling. It has the cheap land on the interstate highways, and, above all, it has cheap people, the folks who will line up for the grueling jobs that more efficient, stronger robots will eventually take.

Capitalism drives America, and I love it. But it does come with a cost. My Amazon stock is up 2,218%. The gulf of income between people with securities and those who dream of sterilizing instruments keeps growing, but with Opportunity Zones and other tax breaks, we’ve got 4 million feet of new buildings blooming in my backyard.

Question: Have you lost workers to Amazon?

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4 thoughts on ““Fulfillment” Centers

  1. Kevin Johnson

    Opportunity Zones are another cog in the wheel of exploitation.
    And in Amazon’s case, a subsidy to Chinese goods that continue to destroy the U.S. manufacturing base that has been paying taxes for centuries.
    Yes, capitalism drives America – and it continues to drive U.S. Manufacturing into the ground while the self-serving interest of Wall Street claim victory.
    The rich get richer – the poor get poorer – and the middle class (as we used to know it) continues to disappear.
    Your article speaks to that slightly; but with an abscense of sincere cynicism.
    So here you go… You’re welcome.

  2. Randy

    I’m shocked at that response, especially in light of all of the daily dialog about systemic racism and folks not having an opportunity for the American Dream. The area in Chicago that Lloyd describes sounds like many other parts of the country where old mfg jobs left and when they did those who were not upwardly mobile, or figured they would come back or simply had no other prospects found themselves stuck. Many ended up dependent on some form of government subsistence, but we all know that the government never created a job or an opportunity.

    The Opportunity Zone was designed to entice businesses, not only the Amazons but others also on a smaller scale (we were in an Enterprise Zone 20 years ago) to “consider” along with many other choices they may have, as to where to build and provide jobs and investment. This young lady saw this as a blessing, a full time, benefit supplied opportunity to change her life. Now the job may not have been one that she was physically most qualified for, and yet she had choices that she could have gone back to her house cleaning job. But making choices and taking responsibility for them is part of growing up. Carpal Tunnel is something that can be relieved and there are ergonomic options to help avoid it. Amazon is big enough to have options and knows enough to avoid W/C claims I am sure, the question would be did she ask?

    But to classify Opportunity Zones as exploitative is to be unaware of the reality that faces communities where no other business is willing to even consider moving there save for the financial breaks that cities and states, or the Feds offer. The amount given in tax breaks is eventually offset in reduced government assistance payments, investments made by the companies instead of Government, that often lead to multiple generational changes. Not only is the parent given a job, with benefits, but the kids see a parent working, learn about work, study harder and hopefully leads them to have options as they grow up. Self worth is a beautiful thing and many people find it first in work, as not everyone learns it growing up in a home where there are no opportunities and parents feel defeated.

    Amazon is putting in a distribution center down the road from us, but I don’t expect to lose anyone of value to them. Entry level folks possibly, but most of those are at best 1 in 5 keep ratio anyway. The state of California is offering Cal Competes tax breaks for businesses that will expand or will stay in California rather than move out of state. i just applied for one, but was turned down. If we had been 5 miles away we would have been accepted because that was deemed a town of High Unemployment and High Poverty, but we are no longer.

  3. Lloyd Graff

    Thanks Randy.
    Interesting that people picked up on the “Opportunity Zone” reference which was not my focus in the piece.
    I think Amazon will use any advantage in their choice of sites, but the key for them is access to employees, and lots of them. And they want close proximity to good highways and population centers. They don’t build many in Podunk, South Dakota.
    The “Logistics Center” is a bit different. They are real estate investment deals put together by lawyers and marketed to rich individuals and institutions. Every tax break is exploited to enhance return and depreciation. I imagine the “Opportunity Zone” designation was a significant factor in their choice.
    Personally, I am agnostic on Opportunity Zones because they are a play for lawyers and accountants not much for small and medium sized businesses. They will employ some people but not many per square foot. I am glad to see the investment but they may peter out when the tax breaks run out.
    But bring on the Caterpillars for now. The vacant space is begging for them.

    1. Kevin

      Exactly right Lloyd.
      Opportunity Zones benefit the rich and well-connected.
      Sorry Randy, but I am VERY aware of their function and who they MAINLY benefit.
      Yes, there can be some positive fallout with people who are ‘stuck’ with no other options for employement; but they are certainly not worth bragging about.
      Oh, and NOW I hear about companies being offered rebates for “bringing back” work from China.
      How about the companies that never left; and that have provided well-paying jobs at the same location for over 60 years.
      Welcome to the shell game.
      Where will the mystery ball appear next?


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