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Just how good are jobs in the logistics industry?

The Inland Empire is loaded with them and many of them pay well, but there’s disagreement about whether they’re a gateway to the middle class.

Without question, the Inland Empire is the warehouse-distribution capital of the western United States, if not the entire country.

About 113,000 residents of Riverside and San Bernardino counties currently work in the logistics industry, nearly 10 percent of the region’s workforce, according to the state Employment Development Department.

That’s probably more than any other similar-sized market in the United States, and the number will only get larger as fulfillment centers – the mega-sized warehouse-distribution operations that process online retail orders immediately, sometimes in one day – become more common.

Aside from the housing industry, logistics is the most important part of the local economy. The question is, are those logistics jobs providing enough Inland residents a sufficient path to the middle class, so they can buy a house, put their children through college and still have something left for retirement?

That debate has gone on for years, and it has intensified during the recession, as the region’s unemployment rate has gone up, manufacturing jobs have gone away and most other pathways to a middle class lifestyle have been eliminated.

The issue is crucial in the Inland Empire because so many of its residents lack a college education. Two years ago, 46 percent of the region’s population that was 25 years or older had no more than a high school diploma, according to the U.S. Bureau of Labor Statistics.

That makes the logistics industry even more important to the local economy, since most warehouse-distribution jobs don’t require a lot of education.

With few manufacturing jobs available, the logistics industry – which in some cases can pay 20 percent more than regular retail jobs – is almost the only way an Inland resident with a high school education can achieve middle class status and stay there, according to Inland economist John Husing.

“There’s the logistics industry, and construction once that gets going again,” said Husing, who has been studying the Inland economy for 50 years. “Other than those two things, that’s it, if you don’t have college education.”

Manufacturing has been virtually driven out of California by excessive environmental regulations that have made it too expensive for manufacturers to do business here, and the same thing could happen to logistics, said Husing, chief economist for the Inland Empire Economic Partnership.

“The people who are trying to do that are the ones who are hurting the middle class,” Husing said in thinly-veiled reference to the South Coast Air Quality Management District, among other environmentalists. “They’re the ones who don’t care about the middle class, because they’re the ones taking away blue collar jobs.”

Husing, chief economist for the Inland Empire Economic Partnership, was part of a panel discussion last month at Riverside City Hall that debated the pros and cons of logistics industry jobs and whether they provide enough for the Inland economy.

The event was put on by UC Riverside’s Center for Sustainable Urban Development and was part of the school’s Randall Lewis Seminar Series, named for the executive vice president of the Lewis Group of Companies in Upland.

B.J. Patterson, chief executive officer of Pacific Mountain Logistics, a third-party warehouse-distribution facility in Rancho Cucamonga, argued during the two-hour discussion that logistics jobs are paying more because logistics operations have become more than moving boxes on and off trucks.

“It depends on the facility, but some of these jobs can get up to $20 to $30 an hour,” said Patterson, whose business stores and ships goods for various customers. “Operating a technology supply chain, especially in an e-commerce center, is getting to be very sophisticated.”

So sophisticated that some logistics jobs in today’s high-tech require a two-year college degree. Still, large e-commerce centers, like the one million square foot Amazon facility in San Bernardino that opened in 2012, typically employ four to five times as many people as a regular warehouse of the same size, Patterson said.

But pay scales and and the number of jobs created don’t tell the entire story of whether the logistics industry is helping blue collar workers in the Inland Empire, said Juan De Lara, an assistant professor of American Studies and Ethnicity at the University of Southern California.

De Lara argued that the median pay in the Inland logistics industry is closer to $22,000 a year – and about $4,000 less than that for a woman – and $10,067 for a part-time worker in the industry, hardly enough to put a child through college.

De Lara, who published an eight-page report last September that studied the pros and cons of the Inland logistics industry, noted that many warehouse workers in the two-county region work for temporary agencies, not the owner of the warehouse.

That can mean an unsafe work environment, inconsistent hours and no overtime pay, De Lara said.

“On paper the logistics industry looks great for the Inland Empire,” De Lara said during the panel discussion. “It looks like an engine for economic growth and job creation, and that’s important in an area with high unemployment. It also looks pretty good next to retail, which is a major force in the region.”

The problem is that it’s not clear how many people in the Inland logistics industry are full-time workers and how many work part-time, De Lara said.

When part-time workers are factored in, and management positions are taken out of the equation because they require four-year degrees, then the logistics industry doesn’t look so beneficial to local blue collar workers.

Typical pay was $14 an hour for a forklift driver down to slightly more than $9 an hour for people who pack boxes, De Lara said.

“I tried to get away from anecdotal evidence, and what I found was that we need more data on part-time workers,” De Lara said. “We need to know how many people in the industry are working part-time before we can make judgment.”

Patterson, who said he questioned De Lara’s “self-reported data,” said logistics jobs will become even more important to the Inland Empire as e-commerce grows and more fulfillment centers are developed.

“The technology involved will make them very desirable jobs,” Patterson said.

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