OLMIS

by Pat O'Connor
Published Jul-21-2010

Slow Growth on the Horizon Characteristics of Warehousing and Storage Workers Wages Summary

Warehousing and storage is a vital industry in the supply-chain that allows consumers and businesses to obtain the goods they need when they are needed. Yet the economic contribution of the industry does not receive very much attention. One possible reason is that the industry has been around so long. After ancient Egyptians harvested and processed their wheat, they stored the wheat in grain silos. The building materials may have changed over the centuries, but we certainly have businesses in Oregon's warehousing and storage industry that operate grain elevators. In 2009, the warehousing and storage industry employed 7,000 Oregon workers.

Over the past two decades, Oregon's warehousing and storage sector added employment significantly faster than Oregon's total private sector (Graph 1). Warehousing and storage employment doubled from 1990 to 1999. Over that same period of time, Oregon's private-sector employment grew 28 percent. However, from 1999 to 2009, employment growth was quite flat for the warehousing and storage sector and for Oregon's private sector as well.

The recession hit the warehousing and storage industry hard due to the sharp drop in consumer spending. From May 2008 to May 2010, the industry shed 1,100 jobs - a decline of nearly 14 percent. Over that same period Oregon's private sector shed 10 percent of its employment.

Oregon's warehousing and storage industry comprises about the same share of the state's total employment compared with the nation. Nationally and in Oregon warehousing and storage made up about 0.5 percent of total nonfarm employment.

A little less than half (48%) of Oregon's warehousing and storage employment is located in the Portland metropolitan area. This makes sense considering that is the state's population center and 54 percent of Oregon's private-sector employment is in the Portland area.

The Willamette Valley also has a large share of warehousing and storage employment. The Willamette Valley accounts for 21 percent of Oregon's total private-sector employment, but the valley has 32 percent of the state's warehousing and storage employment. One reason is the large agricultural sector in the area. Perishable crops require refrigerated storage and the valley also has many grass seed warehouses as well. A second reason for the large share of employment is from distribution centers that have located in the Willamette Valley in recent years. The Willamette Valley offers easy access to Interstate 5 and relatively affordable land to site a distribution center. In fact, a new distribution center is currently under construction in Salem.

Looking into the future, warehousing and storage is expected to grow slower than Oregon's overall economy. From 2008 to 2018, Oregon's total employment is expected to grow 9 percent. Warehousing and storage employment in Oregon is projected to grow 4 percent from 2008 to 2018, adding 300 jobs.

Table 1 shows the 10 largest occupations within Oregon's warehousing and storage sector. It shouldn't be surprising to see that the large occupations within the industry are growing at close to the same rate as the warehousing and storage industry is expected to grow from 2008 to 2018. However, job openings due to growth are a fairly small piece of the puzzle when it comes to total job openings in the warehousing and storage sector. For some time to come, replacement openings will be a much larger piece of total job openings in this industry and Oregon's overall economy as well.

A slightly larger percentage of workers in warehousing and storage are age 35 to 54 compared with the total private sector (Graph 2). Warehousing and storage also has a larger percentage of workers age 19 to 24 compared with the total private sector. Warehousing and storage workers are a relatively young workforce compared with some other industries. About three in eight workers (37%) in warehousing and storage are age 45 or older. That compares with nearly half of the workers (46%) in Oregon's manufacturing sector that are age 45 or older. Overall, 40 percent of Oregon's total private-sector workforce is age 45 or older.

Warehousing and storage has traditionally been a male-dominated industry in terms of employment. Nearly 48 percent of Oregon's private-sector workforce is female. In Oregon's warehousing and storage sector, 38 percent of the workforce is female.

Compared to Oregon's total private-sector average wage, warehousing and storage wages are somewhat higher. In 2009, the average annual wage in Oregon's warehousing and storage sector was $41,237, slightly higher than the $39,981 average across the private sector.

It is interesting that warehousing and storage has a higher than average industry wage considering the occupational mix of jobs within the industry, and the skills those jobs require. None of the ten largest occupations within warehousing and storage require any postsecondary training, they all require on-the-job training or related work experience. Typically, jobs that require less training and education pay lower wages than occupations requiring more training and education.

Graph 3 shows that younger workers in warehousing and storage have relatively high monthly wages compared to their peers in the private sector. However, average monthly wages for warehousing and storage workers in their mid-20s and older lag behind the private-sector average.

Warehousing and storage has been a part of the economy as far back as the ancient Egyptians. Although it is a fairly small industry in terms of employment, it remains an important and vital part of the supply-chain that brings goods to market. It is difficult to know what our economy might look like hundreds or thousands of years from now, but it is likely that warehousing and storage will still play an important role.