WHEN Amazon announced in 2010 that it would build a distribution centre in Lexington County, South Carolina, the decision was hailed as a victory for the Palmetto State. Today the e-commerce giant employs thousands of workers at the centre. Just 3.5% of the local workforce is out of work. Alas, the influx of jobs has not boosted wages for the region’s forklift drivers and order-fillers. In the years since Amazon opened its doors in Lexington County, annual earnings for warehouse workers in the area have fallen from $47,000 to $32,000, a decline of over 30% (see chart 1).

Lexington County is not alone. Since Amazon opened a warehouse in Chesterfield, Virginia, warehouse wages in the region have fallen by 17%. In Tracy, California, they have dropped by 16%. Flat or falling industry wages are common in the cities and towns where Amazon opens distribution centres, according to an analysis by The Economist. Government figures show that after Amazon opens a storage depot, local wages for warehouse workers fall by an average of 3%. In places where Amazon operates, such workers earn about 10% less than similar workers employed elsewhere.

About 44 cents out of every dollar spent online in America flows to Amazon, according to eMarketer, a research firm. The firm’s success can be attributed in part to speed and convenience. To get orders to customers as quickly as possible, the company relies on a vast network of warehouses the size of aircraft carriers where the company stores its products and processes orders. Amazon operates more than 75 “fulfilment centres” and 35 sorting centres in America, manned by 125,000 full-time workers.

To keep costs in check, Amazon must not only maintain dozens of warehouses, but run them efficiently. Whereas traditional shop workers might remain idle for hours at a time, Amazon’s workers—the “stowers” that stock inventory, the “pickers” that pluck items from shelves and the “packers” that box them up for shipment—are constantly moving. Pickers are equipped with hand-held devices that show them what each item looks like, where it may be found, and how to get there as quickly as possible. As they navigate row after row of shelves, timers count down the seconds needed to retrieve each item. To meet performance targets, pickers must collect as many as 1,000 items and walk up to 15 miles in a single shift.

According to available data from the Bureau of Labour Statistics (BLS), warehouse workers in counties where Amazon operates a fulfilment centre earn about $41,000 per year, compared with $45,000 per year in the rest of the country, a difference of nearly 10% (see chart 2). The BLS data also show that in the ten quarters before the opening of a new Amazon centre, local warehouse wages increase by an average of 8%. In the ten quarters after its arrival, they fall by 3%.