Warehouse Jobs Pay Poorly, Lack Health Insurance - Global Trade Magazine
  July 30th, 2015 | Written by

Warehouse Jobs Pay Poorly, Lack Health Insurance

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  • Inland Empire warehouse workers earned a median annual income of $14,000.
  • The Affordable Care Act's incentive structure has prompted employers to use more part-time and temporary labor.
  • “Raising wages has been shown to help businesses to stabilize their employment and reduce employee turnover costs.”

We recently reported of a shortage of logisitcs workers in the United States. According to the U.S. Bureau of Labor Statistics transportation and warehousing companies filled only about 70 percent of job openings last April.

Yet researchers at the University of California, Riverside found that the majority of blue-collar warehouse jobs typically pay less than a living wage, are often temporary, and do not provide health-care benefit.

Two policy research briefs released this month found that a significant share of blue-collar warehouse jobs are filled through temporary staffing agencies, enabling warehouse companies to pay these workers less than those employed directly by the companies and avoid providing health insurance.

These jobs typically pay less than the living wage, contributing to poverty rates in Riverside and San Bernardino counties and the city of Ontario—localities in California’s Inland Empire where warehouses provide jobs for thousands of workers—that exceed poverty rates for California and the U.S.

The researchers interviewed more than 350 Inland Southern California warehouse workers. The team made three key recommendations: raise the minimum wage to a living wage, particularly in the city of Ontario, where a total of 338 warehouses are located; incentivize the conversion of temporary positions to permanent jobs through community benefit agreements and union contracts; and reduce the cost of deductibles for Affordable Care Act (ACA) health insurance plans.

“Warehouse workers in Ontario, like those in other inland Southern California cities, would greatly benefit from the adoption and enforcement of living or minimum-wage policies to improve their wages, such as the local minimum-wage ordinance adopted by the city of Los Angeles in 2015,” the researchers wrote. The authors further suggest that increasing local funds in the Inland Empire to enforce wage policies, as Los Angeles city officials did this year, would help to better protect warehouse workers in Southern California.

As for health insurance, the team said that “further reducing the cost of deductibles for ACA health insurance plans is critical for improving health care access among eligible warehouse workers and other low-wage workers. Moreover, the ACA’s perverse incentive structure has already prompted employers to use more part-time and temporary labor in order to avoid health insurance costs.”

Most Inland Empire warehouse workers are Latino, male, young, and have a high school education or less. Many are immigrants. Those who worked at least 20 hours per week earned a median annual income of $14,000, with incomes highest among those hired directly by the company rather than a temporary staffing agency.

Less than half had health insurance, compared to 85 percent of U.S. workers, and even fewer had coverage through their employer. Two-thirds said they had waited until an injury or illness was severe to seek treatment because of the cost or lack of health insurance.

Raising warehouse workere wages would have a ripple effect across the regional economy, according to the researchers. “The higher wages could help to stimulate consumer spending and increase the tax base in the region,” they said. “While businesses commonly oppose wage hikes, raising wages has been shown to help businesses to stabilize their employment and reduce employee turnover costs.”

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