In a productivity-driven economy, quick and easy access to parts, products and consumer goods are the coin of the realm.
And that, combined with a tight labor market, has translated into six-figure salaries for some employees in the Connecticut distribution and warehouse business.
Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners, said the average annual wage for workers in the state’s warehouse distribution sector was nearly $119,000 a year, according to the most recently availble from the federal Bureau of Labor Statistics.
The median annual wage for the sector was $109, 246, according to Klepper-Smith. The median figure indicates that 50 percent of the annual wages were higher and 50 percent were lower.
“The mean is a more conservative assessment, but what you really should be taking away from this is, that is for people with a certain skill set and is highly automated.” he said. “It’s not just some guy stacking boxes.”
Wages in the warehouse and distribution sector were even higher in lower Fairfield County, where Klepper-Smith said there are 350 people employed, according to the most recent federal data. The average annual salary for workers in sector who are based in the Bridgeport-Stamford-Norwalk labor market was $145,220 — while the median annual wage there was $129,410,
Klepper-Smith’s analysis comes as major businesses are either acquiring new distribution centers or expanding existing ones.
Officials with Amazon announced at the end of January that the e-commerce giant has acquired a vacant 110,000-square-foot warehouse at 7120 Main St. in Trumbull for $7.5 million.
The new facility will join seven others in Connecticut that are part of Amazon’s logistics chain, including a distribution center in North Haven and a sorting center in Windsor. New distribution centers are planned for Stratford and Newington.
Construction already is underway in Cheshire for an expansion of Whole Foods Market’s existing distribution center on East Johnson Avenue. (Amazon owns Whole Foods.)
Michael Mikitka, chief executive officer for the Warehousing Education and Research Council in suburban Chicago, said the Bureau of Labor Statistics projects warehousing and distribution sectors will be one of the fastest-growing employment sectors over the next six years. Employment levels are expected to grow by 21.4 percent, making it the 13th fastest-growing sector in the country, Mikitka said.
“E-commerce certainly has played a big role in it,” he said. “Not only are retailers becoming more sophisticated about where their distribution centers are, they are becoming more sophisticated about where their customers are and how to get their products to them. The most obvious example is the grocery industry: Pickers assigned to put together customers’ orders used to be in in a warehouse; now it’s happening in the back of individual stores.”
Mikitka said wage increases for warehousing and distribution workers has less to with automation and more to do with the tight labor market and increased demands on the sector as a whole.
“A number of organizations are early adapters and have put automation in place,” he said. “But there are also those who are taking a wait and see approach.”
WERC’s most recent national salary survey, released in October, showed that six-figure salaries were limited to five executive-level positions in the warehousing and distribution sector.
The median annual salary, including bonuses for general managers of those facilities, was just more than $116,000, up about $17,500 — or 17 percent — from 2016. At the top of the pay scale in the study for logistics executives were vice presidents of marketing and sales, whose median annual salary and bonus was $200,000, up $47,000 from 2016, or 30.7 percent.
Klepper-Smith said that in Connecticut, especially in the area of warehouse and distribution centers that serve the needs of advanced technology manufacturers, “there are prospects for greater growth.”
“These are the type of jobs we want to create,” he said.
Encouraging growth of warehousing and distribution in Connecticut is beneficial not only because of the number of people it will employ, but the impact it will have on the overall economy, according to Klepper-Smith.
“Research shows that for every dollar spent in the sector, conservatively there will be another 49 cents spent in other sectors of the local economy,” he said. “And for every job created in the sector, another 0.64 jobs will be created in other sectors.”