Rachel Strausman: 

Welcome to Policy Chats, the official podcast of the School of Public Policy at the University of California, Riverside. I'm your host, Rachel Strausman. Join me and my classmates as we learn about potential policy solutions for today's biggest societal challenges.

The number of warehouses in the Inland Empire has roughly doubled every decade since the 1980s. Now, with increasing automation and the rise of AI, policy experts worry about the future of employment in the Inland Empire, which is why we are so grateful to have with us today a panel of experts hosted by the Inland Center for Sustainable Development at the University of California, Riverside School of Public Policy to discuss employment within the warehousing and logistics industry in the Inland Empire.

Rick Bishop: 

Hey, good afternoon, everybody, and welcome to the third in a series of seminar events being hosted by the Inland Center for Sustainable Development, which is a research arm of the University of California Riverside, or UCR. Today, we have a particularly important topic and we're very pleased to have panelists of experts to help comment on this particular issue. We're taking a look at the issue of employment and quality of life in the region. So without further ado, let me introduce the panelists for today's session. First, we have Sheheryar Kaoosji. Sheheryar Kaoosji is the executive director of the Warehouse Workers Resource Center. Peggi Hazlett is the CEO for the Greater Ontario Business Council, and Dr. Johannes Moenius is the Professor and Chair of Spatial Economic Analysis and Regional Planning from the University of Redlands. We also have slated to join us, Dr. Juan De Lara. He's the Associate Professor of American Studies and Ethnicity from the University of Southern California. With that, welcome to the panelists. We appreciate you being here. So thank you again to all four panels for being here and for those of you that are joining us. Okay, so the first question is we're talking about impacts of logistics and warehousing on employment and quality of jobs in our region. So first question, discuss the most important aspects of the concentration of the warehousing and logistics industry on employment and quality of jobs in the region. And then if you can, talk about your organization's experience, either direct or indirect with these impacts.

Dr. Johannes Moenius: 

For a brief introduction, I think it's really hard to overestimate the importance of the logistics sector for the Inland Empire at this point in the economic development of the Inland Empire and actually also for the Southern California region. And so it’s by now the largest employer, it's about 16.4% of all employment in the Inland Empire actually is in the logistics sector. That is even larger than healthcare and pretty much everything else. It has seen an incredible rise, especially due to the pandemic with a large and unprecedented and unforeseen shift towards e-commerce. And since e-commerce and distribution centers have a much larger employment requirement than the traditional logistics where we just handle imports, it's seen an incredible increase in employment.

Such concentration, of course, that provides lots of jobs. And that's always great. If you are looking for a job and you don't have one and you can get one, that's just wonderful. So there's nothing that can be said against that. There are, however, from an economics perspective and from more of a larger higher up view towards this, there are concerns about this. And so first of all, it's a derived demand. Logistics demand is always one that is due to somebody else needing to move something for whatever reason. And that right now is for us three major sources as I see it. Number one is imports, meaning the ports of LA and Long Beach that our brain goods in and of course what we also ship through those ports. Secondly, local production and then local distribution, that's the whole e-commerce side and the e-commerce side was what really drove it. We've seen recently that thanks to the tensions and the Pacific Rim and like other developments also cooling down of the economy that imports have dropped at the ports and that it more automatically affects us here. Such concentration also of course produces with that a high dependence on just one economic factor. And I just want to leave it at this and go to like other parts of this later on. But the benefits have now turned us into a situation where we face enormous risks. And I'd be happy to address them later.

Sheheryar Kaoosji: 

So I think that's a great introduction. I think the fact of the region's dependence on this sector, the dominance of this sector and its growth over the course of the last 30 years is undeniable. My organization is a, you know, organization dedicated to improving conditions in warehouses and it's been around for a little over a decade. And what's interesting is that, you know, even when we first got started 10 years ago, 12 years ago, there was a debate over the quality of jobs, whether this industry was providing adequate jobs and really helping boost the economy, especially coming out of the recession at that point. And there was a lot of debate and a question of, you know, kind of what the sector was bringing to the region. We really started coming across workers in the community as we started bringing people together to raise standards who are employed through staffing agencies, who are employed very short term temporarily. And we didn't have great data about whether that was consistent. Over the course of the last decade, I think that has been fleshed out to be more clear that there is a significant percentage of this sector that is employing people at or close to minimum wage, that it's, as the sector has grown and become, as professor said, a huge part of our regional economy, the jobs have not been as good as they could be. And I think this sector in particular has designed its workflows and its work systems in a way to really take advantage of that use of the staffing agency system, temporary work to really keep kind of a permanent underclass of workers who are always desperate to kind of get a permanent job. It also destabilizes the sector because those people who do have permanent jobs know there's always somebody always looking over their shoulder for the next person who's trying to get their job, doing that same job sometimes for half the wage. So what we've seen is that this is happening in a sector that is dominated by some of the biggest companies in the world, Walmart, Amazon, companies that from our perspective can't afford to pay a living wage, can't afford to invest in this region in a way that they benefit greatly from this region and because of so much of their freight, a trillion dollars with the freight comes through this area every year. Around 2019, 2020, the Brookings Institution started doing some research on the area and started to kind of really put some numbers to what we were always questioning is, those permanent jobs that we see do pay decent wages are not like the only jobs there are, but there is this whole sector, this kind of underclass of workers who are employed through the staffing agencies. And what we saw is that if you take all those jobs into account, not just the direct hires, but the temporary jobs not only have, you know, we had a huge amount of new jobs created with, which has been the driver of our regional economy, but the poverty rate has increased in the period of the last 25 years that the number of people working poor has increased. And we think that that is correlated directly with the fact that these people are working in warehouses. And then again, like I said, it doesn't have to be that way. These are not little mom and pop companies that are just trying to barely make it. This is Walmart. This is Amazon. They're going to need to move this freight through the region either way, and we should make sure that they're accountable.

Peggi Hazlett: 

Yeah, we see here in Ontario that it's not just Amazon and Walmart. We do see the small mom and pops. We see the folks that are employing 25 to 50 employees that have been with them for, you know, 10, 15, 20 years. And we're also seeing an increase in the types of jobs or the change in the types of jobs that are in our warehouses. From, you know, one of our newest warehouses that opened in the south end of our city in South Ontario. it's 550 employees and the 95% of the jobs there are robotic and automated. And so these are higher wages and higher paying jobs. And again, with the company that has longevity in our community. So I think we paint a lot of times a broad brush when we're talking about logistics and warehousing. But I wanna go back to just the creation of these warehouses and the types of jobs that that brings with construction industry. And these are skilled labor and these are good jobs. And so, we, I want to break it down in a way and it was interesting, I had a grad student come from UC Riverside to sit down and talk to me and I said, Do you know what kind of jobs are in some of these places when you just drive up and down Haven. There's manufacturing jobs there. It isn't just the perception of, you know, these bad jobs, these jobs that are, you know, that we see the headlines with. And so I think that the narrative needs to change. I think that for our region, especially around this airport, the number one cargo movement airport in the nation, and we talked about the jobs that are at the ports just left about the jobs that are here at this airport. I mean, it's over 27,000 jobs that are generated out of this airport through this industry. And so I'd like to see a shift in the narrative when we start to talk about these things. I'd like to see some change in the way that the industry is upskilling its employees to make sure that they are the next generation of workers that we need to have to move with the technology changes that are happening in the industry.

Dr. Juan De Lara: 

So many of you have hit on points that I think we need to dig a little deeper on. One is this question about the narrative. And I think it's a really important point to take into consideration as Peggi just mentioned. One of the things that has to happen when we talk about this industry and we have a discussion about the narrative is the specificity of the kinds of jobs that are involved in this industry. And so I think when we speak briefly, broadly around warehouses and logistics, oftentimes the way that we count what we're talking about varies depending on who's doing the talking. And so if we're talking about warehouse jobs, there are in fact many different types of warehouse jobs, and I think Peggo made a great point, especially if you're talking from the perspective of Ontario, the city of Ontario decades ago made a decision that they were not going to lead as their economic model only on warehouses because they wanted to have a different kind of mix, right? And certainly now with the transformation of the airport, that's changed because they're trying to deliver on some of that cargo capacity there. But I think that this, for a long time, the region was sold and the narrative for the region was this cheap dirt and cheap labor model towards regional development that was widely bandied about as the solution, because that was the only thing that was going to grow. And it led to a kind of model, I think somebody mentioned this earlier, where it's like, be grateful for the jobs that come and be glad that jobs are coming to the region. I think we've gotten to a point where just jobs is not enough, that we need to have a conversation about what kinds of jobs and who is actually having access to those jobs. We know that the region has changed dramatically, demographically, in terms of who is living in the region, the tremendous growth of the Latino population in that region. We also know what their educational levels are, and we know that their wages are lower when you compare it to the average wages and the average educational levels in the region. So what happens when we're talking about upscaling, when we're talking about having access to better jobs there is a kind of class and racial dynamic taking place because we have to take into consideration who has the training and who has the access to those kinds of jobs. You know, I think that the narrative has to change, but the way that we talk about upscaling and the positive benefits of this industry also need to take into consideration these variations that I've mentioned pointed out because that's an important part of understanding how this economy is being affected by the region. And one final point before I stop here is this question about, you know, it's a derived demand. I agree that historically logistics has been a derived demand, except when you have the introduction of giant companies like Amazon, where they're no longer just providing or meeting demands, but they're actually playing an important role in generating and producing demand. And so the fact that companies like Amazon are a market leader within logistics and warehousing, and the fact that they are not only delivering, but they are actually a retailer and a producer, means that they have integrated vertically this whole system, where it's not just a derived demand, they're actually very, very much involved in the production of goods, but also in the production of a type of goods that continues to reproduce more and more demand. And so I think that those things all need to be taking consideration, especially when we look at, you know, it's well studied and well known that if you think about what happens when Amazon introduces new fulfillment centers in a region, that there is a general deflation of wages or coming down of wages for that region. That has been widely studied and seen and known as the Amazon Effect. So this is a particular interest to the Inland Empire because it happens to be the place where Amazon is based in terms of its Western distribution facilities.

Dr. Johannes Moenius: 

So, you know, I love those stories about the 550 people, warehouse that all those computerized jobs, but let's just look at the data. So the data tells us that we have in 2021, we had 4,299 warehouses in the Inland Empire. In terms of jobs in the whole logistics sector, transportation warehouses and utilities. That makes 185,800 jobs at that time. That's a wonderful 43 jobs per warehouse. That's the average. And that's 178 jobs per million square feet. So the direction, I totally buy that, but we're far, far, far from the direction. So we really We need to make sure that we're actually taking care of what's here right now and evaluate what's here right now in the mass. And so I totally buy that Amazon is also a producer, but what share of the logistics industry in the Inland Empire is really affected by the Amazon producer share. That's not like relevant relative to the overall manufacturing sector. That is part of the logistics demand that we have here. So I'm you know, like I'm I buy all that but this is the future and that there are these extremes, but the average is far from this and so we need to just be aware that since there is like this very very large consumption of space we are crowding out much better opportunities because warehousing jobs a lot of them are the minimum wage jobs are close to minimum wage job definitely below average wage in the United States. And so like, mind you, the statistics that I used did not include part-time work. They're just the full-time jobs that come out of the official EDD statistics. But I don't see that this is really the shiny golden armor, uh, knight that helps us for the future.

Rick Bishop: 

So I want to kind of follow up on that a little bit. And Peggi, you had mentioned in your opening remarks, this need to change the narrative and that, you know, that from what people suspect. So you answered one of the questions I had. So that's 2021 data. So probably roughly give or take maybe 200,000 jobs today. So how does the narrative change? What kind of jobs are we talking about? And maybe for anybody, because numbers really help. What is the average pay of these kinds of jobs and how is the pay scale range depending on what kind of jobs exist in the industry? Can anybody shed some light on that?

Peggi Hazlett: 

I mean, we go out and we do site walks at all of these facilities. We ask that question. It's part of the top question that we ask. It's like, you know, how many full-time employees do you have? What kind of benefits are you offering your employees? And, you know, the question is, we're all, everybody's paying around the $22 mark. I thought it was interesting is that through the pandemic, the one thing that we heard from our logistics industry, from our warehouse industry, and, you know, we can, let's say we survey 50 of them, was that the employees are very savvy. They'll leave a job and go take another job down the street that's paying a dollar more an hour or get the bonus, and then they'll bounce out of there. So, you know, the development of making sure that you've got this workforce that is sustainable for them, the workers themselves were creating a lot of the turmoil that was happening within these and a lot of the turnover, but also just some of the issues that we saw that were happening within the industry itself. And yes, then they started the, you know, the industry then started leaning on the temp workers. And so this was just, again, this revolving door, this carousel of folks jumping on and off and on and off. But for us, what we're seeing is now a lean into the more technically advanced jobs, the programming of the robotic system, making sure that the workers are being taken care of, creating a culture within the environment because they know that they're under a microscope right now, creating a culture that is bringing a voice. It's talking about the mental health of the employees. And so we've seen that shift over the last two years coming out of the pandemic. a complete strengthening of the workforce through the worker themselves within the culture of that. What we're finding though is that we have to, again, I'm gonna keep saying change in the narratives. I think the opening comments were that land is cheap and labor is cheap. So, I mean, I heard one of our economists couple of years ago say that the Inland Empire was big and dumb. I don't wanna hear that. When we talk about the Inland Empire, I wanna talk about the skilled labor that we have, the workforce that we have through our construction industry and our building trades, the workforce that we have within our logistics and distribution industries, the workforce that we have on the airport, there's the economic engine in this region. We have to change this narrative or we're gonna start losing the workforce that we do have and the inability to upskill that workforce to have the mechanical engineers and as we start to electrify anything, all of those types of jobs, those jobs are paying for us. We have one of our businesses that we surveyed, It's been around from 1908, almost all fully automated. The workforce there is making upwards of $90,000 a year. Over $90,000 a year for the majority of the workforce in an industry that is here, that has been around since 1908 and almost fully automated. We need to get out into these places and start to walk their sites with them, walk with their employees, talk to their employees. And I think that, again, through the lens that I look through, it's, you know, I'm not hearing the horror stories that are making the headlines.

Dr. Johannes Moenius: 

Well, it's not a horror story. It's data. The few warehouses that do that, the Amazon warehouses and those hyperautomated ones, I mean, they're just a spearhead. At the end of the day, 75% of the logistics jobs in the Inland Empire, actually more in the Inland Empire, it's almost 80% in the logistics jobs in the Inland Empire, are automatable. So we have 200,000 people in those jobs right now. I mean, they're not going to go all the way, like the small warehouses are not going to adopt technology that quickly. Yesterday, I was on a call with the economic developers and one of the people claimed that, “oh, we're talking to the robot developers all the time and they say basically in five, six years we have generalized AI alike robots that can basically sweep their warehouses empty”. I mean, then we've spent those 60 square miles, was it? Like a warehouse space that we have now in the Inland Empire that's all just full of machines and doesn't support any jobs. I mean, except for a fraction in terms of the number of people that are in here right now. I mean, if you look just in terms of millions of square feet, we started out in 1980 with 350 people per million square feet. In between, it dropped before the e-commerce came, it dropped down to 150. There was a level of automation and space use and so on that we actually saw. And now it went up to 180, roughly, because of the 15 times higher requirement of e-commerce and the fulfillment center workforce and for the traditional redistribution stuff that came through the ports. I mean, you know, Amazon is working on the dark warehouse. That's only leaving us with engineers. And you really believe that a person who can make $120,000 or more wants to live between two big warehouse blocks where like the sun is blocked from outside. I mean, we're really destroying our outlook of the future by sacrificing large amounts of areas for future development. I don't think, like if I, when I talk to entrepreneurs and I talk to a lot of entrepreneurs, then do they want to live next to warehouse blocks unless they sell logistics robots, they don't.

Dr. Juan De Lara: 

I have a question about data actually. So when you talk about that 180,000 and then we make references to warehouses, that 180,000 includes all of the occupational categories, right, that you're talking about. So that includes things like truck drivers, freight drivers, et cetera. So they're not all working in the warehouses, they're doing other work.

Dr. Johannes Moenius: 

That's just like the, I think of the warehouses as an anchor. And so how much does that anchor really provide in terms of potential jobs? Because then all the warehouse is not living in a completely isolated economic space, it needs to be fed. It needs to be supported. It needs utilities and so on. And the way that the EDD provides the data is just in this particular category. And I picked the widest category to say, like, if we really look at the upper level of what permanent employment is supplied by the logistic sector, that's the really maximum. If we go to just warehouse workers, the numbers are much smaller.

Commercial: 

Good jobs aren't created by accident. It takes intentional research, planning, and organizing to push economic Development Agencies in this direction. Omer Sohail, Policy Analyst for California Senator Lola Smallwood Cuevas, will talk about winning big for workers through politics and policy at a UCR School of Public Policy Seminar on Wednesday, February 14, 2024. Event information and registration link are available in the show notes.

Rick Bishop:

So a couple of questions. Peggi, I think you had mentioned average pay is about $22 an hour you mentioned that you know in Ontario there are a number of I think

Peggi Hazlett: 

And that’s average pay for the entry level warehouse person.

Rick Bishop: 

Okay, got it.

Peggi Hazlett: 

That's not the average pay of the mechanical engineer that's not the mechanical engineers to starting about $36 an hour.

Rick Bishop: 

Okay, got it. And are the mom and pop warehouses that you mentioned, do they pay more than the Amazon, Walmart people less or is it hard to quantify that?

Peggi Hazlett: 

Now, we're finding that they're actually paying more because their folks have been with them for a long period of time. They're not having the rapid turnover that we're seeing at the larger facilities like our Walmart, our Amazon. And so there's some loyalty there and you find in these places, again, some of the ability for them to upskill their workers using, you know, the in tech center to make sure that they are having the newest and latest in training in the robotics. And so, they are incorporating into their facilities some of the green technology and making sure that their employees are trained in those so there is this. And then we're finding also that you'll have the father working there and then the next generation is coming in. So the daughter and the son are working in this facility because they again have sustainable jobs there with benefits with tuition reimbursement. So the benefit packages that are being offered at the smaller warehouses, ones that are employing 25 or less. So we have such a mix here in Ontario or, as we say, Greater Ontario region. But, you know, Ontario is definitely the mecca. But I want to go back to something that the professor just mentioned, and that is, you know, there is such a wide berth of types of jobs here. And to me, it reminds me of a hospital. Not everybody is a doctor in the hospital. You're going to still have the food service industry, the janitorial staff, the clerks in the office, the schedulers, all of these folks are within a hospital system or an education system. It's the same thing within a warehouse system or the industry itself. Truck drivers are making over $100,000 a year and they're driving clean trucks. So it is, again, changing the narrative for me has really been the last year of something that we've taken on and broken apart and had these discussions about and it's so it's I love these types of things because again it it brings new voices to the table and I think it's necessary for us as a region I mean I looked at your last two webinars and it was quite interesting how myopic you got on those subjects but the last one or the first one that you had just talked about economic engine that this industry is for our region in all of our cities. I think it is vitally important for us to continue to look at and to get the data, the right data, and to make sure that our communities, our elected officials, are all being presented the information.

Rick Bishop: 

Yeah, no, I think that's a good comment. It makes me kind of thinking out loud that, you know, might be an interesting in comparison to take a look at a hundred jobs in the warehousing logistic and then break down what kind of jobs they are and maybe compare them to other sectors and find out to what extent there's differences. So the $22 an hour, you said that was entry level. How that compares for people trying to make a living, one of the panelists said at the outset, the poverty rate in the two counties has actually gone up in a while in the last few years. I mean, I think I ran across data recently that said the average wage needed to afford the two-bedroom apartment in the two counties is about $34 an hour so.

Peggi Hazlett: 

It is. We just did a total on housing and that's exactly right so I mean it isn't because warehouses aren't paying enough it's because our housing industry and our rental market has gone up so high.

Dr. Juan De Lara: 

Since we're talking about data and I'm a little uncomfortable talking about making I want to make sure that we're talking about the same thing right and so I looked at the top and this is the national level not at the regional level but I looked at the BLS data at the national level and the top three occupational categories for what's typically considered the logistics industry are industrial truck and tractor operators, laborers and freight stock and material movers, and stock and clerk and order fillers. Now if you go into what their median hourly earnings are, right, so for those three categories for the industrial truck and tractor operators $21.61 an hour, laborers and freight stock material movers $18.92 an hour and stock clerks and order fillers their median hourly wage $19.01. So on the national level that's what those three big occupational categories within that logistics industry are and those tend to reflect-. We keep talking about the different kinds of jobs that are available but those three job categories are the biggest job categories within the industry of logistics and warehouses.

Peggi Hazlett: 

Now, clearly, inland Southern California is going to have a different wage structure than national average.

Dr. Juan De Lara: 

Yes, but not by much.

Dr. Johannes Moenius: 

We normally are lower than the national average. We normally are lower than the national average. All the data that I know shows that our wage structure is lower than the national average. So like the largest set is probably the upper limit. And these are the types of numbers that I also had in mind. And so we can figure it out, like, as we speak, I'm working on it right now.

Rick Bishop: 

So real quick for you, Sheheryar, you had mentioned, you know, representative that you work with, you know, Amazon and Walmart, the wages, they're typically low for the entry levels. What do you see is necessary for those kinds of jobs to see an uptick in wages, what's necessary? what's necessary? And why is it not happening?

Sheheryar Kaoosji: 

I think in terms of wages, what we've seen is some different currents going in different direction. So the wages of, you know, the minimum wage in California has gone up consistently for the last seven years because of the minimum wage increases that were passed at the state level. And those have, you know, obviously been aligned with going through the period of the COVID expansion and all the expansion and goods movement that happened in 2020-2021. So wages are significantly higher than they were in 2019-2018, partly because of the wage increases is from the minimum wage, partly because of inflation. So when Walmart went to $15 an hour in 2018 was a big deal, right? So I think that's part of it. What people have noted I think is the housing costs have gone up so fast and increased so quickly that it's really been hard for all economies, all industries to be able to keep up. I think that's really concerning for not just this sector, but a lot of sectors. What we've seen is that the, you know, Amazon in particular has grown has become the biggest private employer in the region, the biggest private employer in the state. That's why I'm talking about them quite a bit. About a third of the workers in the warehouse sector in the region are working for Amazon, partly because they've absorbed a lot of the workers that would have been in retail, right? The retail workers that were in those stores that are now collapsing are now doing work inside of these warehouses or doing delivery work, because that's where the work has been moved over to. So it's just kind of like understanding the way that the economy, you know, that this part of the economy is changing, not just in terms of the kind of jobs with the kind of work that's happening. So I'd say like, you know, but the Amazon effect, you know, Amazon went to $15 in 2018 or so. They've been very conservative about raising their standards and raising their wages since then, even though they are clearly the driver and everyone kind of cues off of them in terms of standards. I think the use of temporary workers, Amazon has used staffing agencies, but they do use seasonal workers, they call them white badges, to really keep a lot of high turnover, times like now when building up toward the Christmas rush, those kinds of things. And then the use of, again, staffing agencies to keep a high turnover in other warehouses, a lot of the big retailers use, sometimes 25 to 50% of their workforce are employed through staffing agencies. Those inevitably are going to be at minimum wage or close to minimum wage. Why is that happening? Because they're very powerful market actors and they have the ability to keep wages low. And, you know, there is still a huge percentage of the folks in this region who are desperate for work. So I think that's kind of what we've seen. I think the housing costs going up so quickly the last couple of years is kind of the new wrinkle. It's made it even harder for everyone. As, you know, people have moved from cities A. like L. working to have more space during COVID, as housing costs have gone up in urban markets. A couple of years ago, it was, you know, we didn't see a lot of displacement in places like San Bernardino. you know, now we see evictions in San Bernardino and Rialto or places like that. So it's really important for us to keep track of that and make sure that again, like the companies especially that can't afford to do the right thing do raise their standards.

Rick Bishop: 

Great, thank you. Hey, next question for the panel. And this is a big one because it's one that we always hear. It's this whole issue of, you know, advanced technology and how is that going to impact this particular industry? And then just kind of as a side comment, technology and AI and all, you know, It impacts a whole lot of jobs. It's not just those that are in this particular industry. So, you know, I know Dr. Munoz, you do a lot of research on this. You could probably be much more articulate on this than I. But just real quickly from the panelists, what do you see as the positive and negative impacts of recent technological advancements, future technological advancements on this particular industry? What's good about it? What's bad about it? What should we be prepared for?

Peggi Hazlett: 

What's good about it? These will be higher paying jobs. What's bad about it? We don't have the skilled workforce right now. We're behind on the skilled workforce, making sure that the emerging workforce is going to be capable of doing these jobs, which is not there. And, you know, is that an education issue? I don't think it's a warehouse issue. I think it's an education issue. I think the education sector is about two years behind on our workforce needs. And that's something that we have been tackling for the last 10 years I've been CEO of this organization with our industries, all industries. We have found that education is about two years behind. And so how do we change that? is, you know, making sure that we have places like the in-tech, making sure that we've got the new facility that would be built in Jurupa Valley, that we've got something that is myopic when it comes to the training that they go in, they get trained, they get trained while they're working and they are capable of them doing the jobs. We see it in, you know, even the aerospace industry. Times are changing and we have to change quickly with them, but we have to make sure folks stay employed while they're getting the training that they need. And that to me is the key piece to it. So we need to make sure that we create through our workforce development programs, this bridge, so that the small businesses especially have the capacity to train their workforce and don't lose those employees. And we, you know, I'm reading the comment here from Mayor Pro Tem Deborah Doris Perada, and it's, and she's 100% right, you know, 50% of our students aren't prepared for the workforce, we need to change that data, we need that data, we need to change. That data we have to change. But what I also want to say is that we do have a skilled workforce in the Inland Empire when it comes to our building trades in our construction industry. These good paying jobs, building these warehouses, building the infrastructure, building our transportation infrastructure, these are great paying jobs. These are mortgage paying jobs. And that was something that we have always strived for to make sure that our workforce has mortgage paying jobs. Unfortunately, the housing industry has exploded on us. And was a mortgage-paying job before is no longer a mortgage-paying job now. And so, I think things will balance itself out, but the advancement and the change in the jobs is definitely means increasing wages.

Rick Bishop: 

Question for all of you. So agree with the comment that you're going to replace these jobs with higher paying jobs. The big issue for the region is what do we do and how do we do it to keep those jobs here rather than having them be performed outside of the region?

Dr. Johannes Moenius: 

That's a a billion dollar question, I guess, yes. So yeah, I just want to actually say something about the housing market since it came up several times and Peggi just mentioned it again. We need to just also acknowledge that 60 square miles of warehouses are equivalent to 160,000 space for quarter acre single family homes. And some of the housing prices that we're seeing is not only construction related, it's also space related that warehouses crowd out residential space. So you can say, oh, it's zoning and so on. Yeah, I know those arguments. But at the end of the day, space is space. So I see actually a lot more opportunities for improvements. And that ties into your question, right? Because thanks to technology, we have exoskeletons now. It's one of the fastest growing adoptions that make the taxing warehouse jobs easier to do. So they grow at 40% per year. So if you look at the Amazon robots, Let's see, Amazon has been growing at almost 100% per year their robots deployment since 2013. It has slowed down recently, but it's still staggering numbers. So these numbers are real and bring improvements to the quality of work for the people in the work warehouses. And so we need to really recognize that. And automation and technology also reduces the space requirement per turnover unit because you can achieve faster turnover, higher picking accuracy, and all the metrics that people normally use for warehouse productivity measures. So there's really a lot going on. The question how we can get those, keep those jobs here is A, through the quality of life, because, you know, like, I mean, why did I come to Southern California from Chicago? Well, I actually got my PhD from UCSD, so I knew it was beautiful here, number one. And so, but we need to preserve that beauty and, you know, if we cover everything with warehouses, this beauty is not going to be preserved so that higher earning people are willing to stay in the region. And the second is, you know, I mean, I'm just stunned about the volatility of regulation in California in general. We need to come up with some sort of moratorium that we say like, hey, those regulations are now going to be in place for the next three years or five years so that that business can actually say, okay, I know what I'm getting myself into, at least I have five years of planning security. And then everything that is literally taken care of or like changed in the meantime will take effect five years later. Yes, that's a delay, but we have to have a trade-off between predictability for the businesses. Or we need to really create special economic zones where we allow certain types of high value production and jobs taking place in special economic zones that we kind of literally fence off and make isolated regulation islands that are not as effective. That's the only way I can see it, because we see now a huge wage of repatriation of jobs rolling onto us from China, because you know, like think of Adidas. Adidas has now like two factories that I know of, one in Germany, one in Atlanta, where they 3D print shoes with 160 people, but they replaced 1,000 workers in Vietnam with that. So, I mean, we are seeing this repatriation. We can do this thing here. We need to make sure that those jobs are not landing in St. Louis, Missouri, because of the logistics preferable location there. We need to make sure that they can stay here, and for that, we need to give predictability to the employers.

Rick Bishop: 

What needs to be done in the way of job growth an economy in mind in the region that maybe is not currently being done focused on this industry. And then for us at ICSD, how do you see us contributing to this dialogue? Is there a niche area that isn't being filled that perhaps UCR research can can assist in?

Sheheryar Kaoosji: 

So I would say in in addition to all the conversation we've had about automation, I think the question around kind of transition to zero, close to zero mission logistics is really a key question. I think in relation to the previous conversation, right? Like I think the question of California competing on cost alone with the Texas's of the world is not really gonna happen, but whether it's just on wages or on housing costs, all those different things, partly because we do have more regulation, partly because our housing costs are higher. There's other things that we can compete on. and I think that the state has been able to do so, and the opportunity right now is the transition to the sustainable economy. If that doesn't happen here in California, it's not going to happen in this country, and then we're really in trouble. But it's also an opportunity for the state to take advantage, in the region, to take advantage of the huge amount of federal money that's coming down the pike from the Biden infrastructure bill and the inflation reduction act. What's infrastructure? Infrastructure is a chance for us to transition this polluting system into something that is sustainable. These warehouses, from my perspective, we're not going anywhere. You can have a marginal change of where the growth is happening, but there's trillions of dollars worth of infrastructure that's already here that the goods movement sector has placed here, sometimes with the federal government's help, and it's not going anywhere. We're near the port until we get flooded out by global warming. We're at the port, right? And that's, that's, that's the opportunity is California is California. We do have our pluses and minuses but I think the opportunity is for us to lean into this transition, train people to be maintaining and operating zero emission vehicles to be producing zero emission vehicles right for us to be the place where the all those things happen with good quality jobs with perspective towards sustainability. I think that's possible. I think that's a model that a lot of folks in the region are starting to think about, but it has to be done intentionally. And I think now's the time to do it.

Dr. Juan De Lara: 

The key point I think that Sheheryar just touched on is this other point. When we think about infrastructure, we don't often think about the social infrastructure that's required in order to build out and think about creating resilient regions. And I know that I think someone mentioned in this conversation, the new Trade Technical College is going to be built in Harupa Valley, which is an initiative that comes out of the Community Economic Resilience Fund out of the state of California. And that campaign and that entire endeavor has embraced this notion about community-led development, where community organizations are an integral part of defining understanding what it means to build a sustainable long-term economic development plan that includes all of these issues that we've been addressing in terms about environmental issues, but around also social equity issues and wages, et cetera. And it's, you know, you also talked about the federal money. I think that's right. You know, we just saw less than a month ago, the Biden administration announced that California was going to be one of the main regions for this hydrogen infrastructure project. And that comes directly out of this surf process as well, because California Forward, etc., we're working on these. And so you see a conversation now where for a long time, I think it was left up to the sort of the interest of business entities that were sort of coming into the region and using the region as an opportunity for investment. But I think that that kind of model won't work unless there is a social infrastructure that's also taking into consideration the long-term sustainability, not only of the environment, but also of the communities, meaning the people that live in that region. Because I don't think that the private sector will address all of those things. And so when we think about infrastructure, it's not just about the traditional gray infrastructure, concrete, et cetera. And it's not just only about also the green infrastructure that is now widely embraced, But it's also thinking about the role the communities play in deciding how these resources are going to be spent and what kind of development communities want in their region. And so I think social infrastructure is a huge part of that, which means that, you know, the people that are working and living in these neighborhoods and in these warehouses should absolutely be part of these conversations.

Peggi Hazlett: 

Local control needs to be part of the conversation also. We need to make sure that our elected officials at the local level, at the planning level and at the development level have a voice, and it can't be usurped from the state or federal government, especially from the state. And when we look at what's best for our communities, I'm going to agree with Dr. Delara, is we need to make sure that the community has a voice and that's through their local elected officials. And we've seen some changes that have been handed down from the state level that have such a negative impact on our local economies, our local communities. And so I want to flip it back to where we elect our local officials to sit on that dais and we know that they have our best interest at heart and we have access to those local elected officials. So when it comes to putting a six story, you know, multi-million square foot, Amazon warehouse in the Southern part of Ontario, that is something that, you know, our developers met with our planners here in the region, with our city folks, and it was the right decision to make. To look at this from the 30,000 foot level to try to implement legislation from the state level that is going to get and have this broad brush effect on our region, I think it's the wrong approach to it. We need to get local control back to our local elected officials. We need to make sure that the community has a voice and they do that through those local elected officials. When you look at what you all can do, it was something that we talked about a lot and that's the data. I think that we need to have current data. We can't have data that goes back 25 years that we keep reaching at and pulling forward and saying, you know, this is how this is, it's not. And that is something that we find as an organization when we have these kinds of balanced conversation is I want to make sure that the data that we're talking about is the most current data that's available. And I'm going to lean on our educators and our institutions of higher education for that data. And I'm going to look at our workforce development groups for that data, and I don't want something that is dated. I don't want something that's going to take me during the pandemic, which was a blip in time here. I want to have what's the most current data so that when we're asking our elected officials to make decisions, when we're asking our city planners to change general plan, when we're asking those things about our workforce, that we're making these decisions based on the most up to date, recent information, and so that we have decisions that are made that future and for next generations. By the way, I just want to go back to something. My 19 year old grandson just got a job at Amazon San Bernardino and he's paying 22.50 an hour. So this is current data. This boy is a high school graduate and that is it. 22.50 an hour at Amazon San Bernardino, so.

Rick Bishop: 

Good for him.

Dr. Johannes Moenius: 

Yes, I agree with actually what all other previous panelists said. I do think that there are two, three, four distinct things that you could support. Um, number one is, you know, like what we need to, in order to get current data is we need to find local control is we need to cultivate the idea of the citizen scientist. So I've worked with a startup specifically that actually, that's that specifically for airport noise. So with that startup, we producing noise sensors that automatically detect when airplanes come in and how much noise they produce, the tail number and what have you, so that we actually have an idea of what's going on there. And there are like a couple of hundred installed around Chicago O’Hare. So that that's all in private households. So this is citizen scientists. So sensors, those types of sensors, as we are in the time of the Internet of Things, can be used anywhere, whether it's in warehouses or whether it's in industries and so on, to really understand what is going on economically. Secondly, it would be great if you and your resources could really look at the quality of jobs that is happening in the major industries or specifically the logistics industry that is there. Because, you know, like, I mean, I love those anecdotal stories, but I would rather like to see some systematic analysis of what's going on. And the third area which we're doing at the University of Redlands, we've included both artificial intelligence and virtual reality in my classes. So that offers huge opportunities for accelerating the training of the workforce that all other panelists have asked for and argued for. So we need actually more automation in the logistics industry quicker so that we can set the people free there so that we can train them quickly with the new technologies for better paying jobs, for those jobs that drive the robots in the warehouses and so on. So if you could support that, And I think that would be a wonderful job. Thank you so much for the time and thank you for inviting me.

Rick Bishop: 

All right. Well, lots more we could go. Unfortunately, we're constrained to an hour, but Dr. Juan De Laura, Sheheryar Kaoosji, Peggi Hazlett, and Dr. Johannes Moenius, thank you so much for your time and for your expertise. Certainly a lot of work to do.

Rachel Strausman: 

This podcast is a production of the UC Riverside School of Public Policy, and our theme music was produced by C Codaine. For the latest updates on the School of Public Policy, be sure to check us out at UCR_SPP on Instagram. Or, for more episodes and content, visit our YouTube channel. I'm Rachel Strausman. Till next time.