News Clips

Two UCR studies of Inland Southern California workers find that warehouse jobs typically pay less than a living wage, are temporary, and lack health-care benefits

By Bettye Miller
UCR Today

(Link to the article. Link to policy briefs.)

RIVERSIDE, Calif. – Warehouses provide jobs for thousands of workers in the Inland Empire. But a majority of blue-collar warehouse jobs typically pay less than a living wage, are often temporary, and do not provide health-care benefits, according to researchers at the University of California, Riverside.

Two policy research briefs released this month found that a significant share of blue-collar warehouse jobs are filled through temporary staffing agencies, enabling warehouse companies to pay these workers less than those employed directly by the companies and avoid providing health insurance. These jobs typically pay less than the living wage, contributing to poverty rates in Riverside and San Bernardino counties and the city of Ontario that exceed poverty rates for California and the U.S. The studies were funded by the UC Institute for Research on Labor and Employment.

Researchers from UCR’s Labor Studies program and School of Public Policy’s Center for Sustainable Suburban Development (CSSD) interviewed more than 350 Inland Southern California warehouse workers in 2012 and 2013. The team made three key recommendations:

– Raise the minimum wage to a living wage, particularly in the city of Ontario, where a total of 338 warehouses were located in 2013, the year the surveys were completed.
– Incentivize the conversion of temporary positions to permanent jobs through community benefit agreements and union contracts with warehouse companies.
– Reduce the cost of deductibles for Affordable Care Act (ACA) health insurance plans.

The research team includes: Ellen Reese, professor of sociology and chair of the Labor Studies program; Juliann Allison, associate professor of gender and sexuality studies and public policy, and associate director of CSSD; Joel Herrera, a UCR sociology major who will enroll in UCLA’s sociology graduate program in the fall; and Mila Huston, an independent researcher who earned her master’s degree in sociology at UCR.

“Warehouse workers in Ontario, like those in other Inland Southern California cities, would greatly benefit from the adoption and enforcement of living or minimum-wage policies to improve their wages, such as the local minimum-wage ordinance adopted by the city of Los Angeles in 2015,” the researchers wrote in “Why the City of Ontario Needs to Raise the Minimum Wage: Earnings Among Warehouse Workers in Inland Southern California.” The authors further suggest that increasing local funds in the Inland Empire to enforce wage policies, as Los Angeles city officials did this year, would help to better protect warehouse workers in Southern California from wage theft.

In “Health Care Needs and Access among Warehouse Workers in Southern California,” the team said that interviews with warehouse workers suggested that “further reducing the cost of deductibles for ACA health insurance plans is critical for improving health care access among eligible warehouse workers and other low-wage workers. Moreover, the ACA’s perverse incentive structure has already prompted employers to use more part-time and temporary labor in order to avoid health insurance costs.”

Among the reports’ findings about Inland Southern California warehouse workers:

– Most workers are Latino, male, young, and have a high school education or less. Many are immigrants.
– Those who worked at least 20 hours per week earned a median annual income of $14,000, with incomes highest among those hired directly by the company rather than a temporary staffing agency.
– Between one-third and one-half had health insurance (compared to 85 percent of U.S. workers), and even fewer had coverage through their employer. Two-thirds said they had waited until an injury or illness was severe to seek treatment because of the cost or lack of health insurance.

Raising the wages for warehouse and other low-wage workers in high-poverty cities in the Inland Empire would benefit those workers and their families, and have positive ripple effects on the local economy, the researchers said.

“The overall higher wages could, in turn, help to stimulate consumer spending and increase the tax base in the region,” they said. “While businesses commonly oppose wage hikes, raising wages has been shown to help businesses to stabilize their employment and reduce employee turnover costs.”

The researchers also called for national labor law reforms to facilitate unionization among warehouse and other low-wage workers, which ultimately would help to improve warehouse workers’ access to health insurance and improve workplace safety. Increased state and federal funding to enforce occupational, health, and safety regulations could also help to prevent workplace accidents and injuries. The Bureau of Labor Statistics reports that the warehouse industry is one of the most dangerous in the U.S. with a workplace injury fatality rate that is more than three times the average of all workers, the team noted.

By Chris Kirkham
Los Angeles Times

(Link to article on latimes.com)

Pilar Guzman has worked for five years in a warehouse that processes luggage arriving from China and bound for the likes of Wal-Mart, Macy’s and Kohl’s.

She’s made minimum wage for the entire stint and arrives each day not knowing whether she’ll get called into work the next. One recent day, she taped 12,000 cardboard boxes.

“The work is very repetitive, and people tend to get hurt,” she said in Spanish through a translator.

Guzman is on the front lines of the fastest-growing industry in one of the fastest-growing job markets in California: the Inland Empire. Once the poster child for the woes of the housing crash, the eastern spoke of the Los Angeles metro area has rebounded swiftly over the last two years.

The fastest-growing sector has been the logistics industry — the truck drivers, inventory managers and warehouse workers serving an increasingly global and digital economy.
Inland Empire job growth

The sector created 1 in 5 jobs in the Inland Empire last year. That figure doesn’t include the huge proportion of warehouse workers supplied by temporary employment agencies, which typically offer less job security and fewer benefits.

Other workers, like Guzman, are employed by contractors who can’t always offer full-time positions because of fluctuating demand from big retailers.

As trade volume at the ports of Los Angeles and Long Beach has surged to near-record levels, Riverside and San Bernardino counties have become a strategic link in the global supply chain — an interior extension of the ports, a hub for goods traveling by truck and rail throughout California and the United States.

With ample, affordable land, the Inland Empire has in recent years given way to a real estate boom for mammoth warehouses, leased by giants such as Amazon.com, Home Depot and Nordstrom.

“For the industrial market, the Inland Empire is like office buildings in Manhattan,” said Joe Cesta, managing director of CBRE’s Ontario office. “It’s at the center of what happens.”

The rapid rise of e-commerce has put the Inland Empire at the leading edge of a retail revolution. The region’s warehouse workers have become the unseen store clerks of a one-click world.

A 2013 UC Riverside survey of warehouse workers found that about 60% of those employed at Southern California facilities worked for temp agencies, often with no health benefits and no guarantees of hours. The arrangement offers companies the flexibility to staff up or shed labor as demand fluctuates.

The temporary employment industry has grown jobs by 35% over the last five years in California, making it one of the state’s single fastest-growing industries. The logistics industry has been a major driver of that growth.

“We know this will bring jobs, but what kind of jobs?” said Jake Wilson, an associate professor of sociology at Cal State Long Beach and coauthor of “Getting the Goods,” which focuses on Southern California’s ports and logistics industry. “The vast majority of these workers are in very precarious working conditions.”

Staffing agencies operating in the Inland Empire include multinational, publicly traded companies such as TrueBlue Inc. as well as smaller companies serving mostly the local market.

Matt Thalmayer, president of Arrow Staffing in Redlands, said the majority of his business serves the warehousing sector. All employees who have a commitment of more than 30 hours a week qualify for health benefits, he said.

In the wake of the Great Recession, he said, many companies have relied on staffing agencies to manage regulatory changes in healthcare and workers’ compensation.

“As the government starts telling us how we need to operate, you’re going to see more and more survival techniques,” Thalmayer said. “And it may be through agencies like ours.”

Inland Empire politicians have invited the growth of the industry. They acknowledge that many logistics jobs are low-paying, but they believe the rapidly evolving industry will increasingly demand higher-level skills and pay higher salaries.

“It’s not just the forklift guys anymore,” said Fontana Mayor Acquanetta Warren. “Yes, there are the worker bees, but many jobs require analytics skills and the ability to use a computer.”

John Husing, chief economist for the Inland Empire Economic Partnership, said too many critics equate the entire industry with the lowest-level jobs. He notes that 80% of the jobs in the industry — including higher-paying management positions — require only a high school education or less.

“That’s who works in the industry — it’s people who’ve worked their way up,” Husing said. “There’s a whole evolution of people up the skill ladder.”

Much of the debate among economic experts centers on the wide range of jobs in the industry: from entry-level warehouse laborers who typically make less than $12 an hour to sales representatives making more than $35 an hour.

At Pacific Mountain Logistics in Ontario, Rodrigo Espitia started out as a forklift driver about two years ago. Since then he’s worked himself into a lead role at the warehouse, supervising the packaging of all outgoing goods delivered to customers.

He’s gotten a raise from $12 to $14 an hour. He sees a lot of opportunities for those who work with speed and precision.

“I’m here because I don’t make lots of mistakes,” Espitia said as he double-checked the billing and shipping details for outgoing electronics. “You always have to be on top of everything, and make the customer happy.”

Inside the 160,000-square-foot warehouse, a half-dozen forklift drivers constantly honked their horns, warning as they turned corners and backed up with loads of patio furniture just off ships from China. The company has tripled its workforce in the last three years, said owner B.J. Patterson.

As the economy has emerged from the recession, he said, there has been a much greater emphasis on speed, as manufacturers and retailers have worked to cut costs by reducing inventory. He said it has changed the conventional notion of a warehouse as a place where goods are stockpiled.

“The majority of what we get in has to be out and headed to the customer within a week or less,” Patterson said. “It’s less storage and more movement.”

A few miles east in Mira Loma, Guzman said she and most of her fellow workers have little hope of getting a raise or steady hours. She often has pain in her lower back after standing all day, but she said managers often don’t allow workers to rotate through different tasks to ease the stress.

The warehouse where she works, owned by Olivet International, was cited in 2013 by California’s Occupational Safety and Health division for several safety violations, including failure to provide sufficient light for workers unloading at night and insufficient safety protocols for forklift drivers.

The company agreed to a settlement with the National Labor Relations Board last year involving alleged retaliation against employees who stopped working because of excessive heat.

Peter Lin, secretary for Olivet’s board of directors, said he could not comment on Guzman’s specific issues because they are private personnel matters. He said that the issues involving state and federal agencies are in the past and that the company has installed state-of-the-art fans in the warehouse to address the heat issues.

“Our equipment and our practices are easily on par, and I’d like to think are exceeding, industry averages,” Lin said. “We do take employees’ concerns very seriously, and employees are welcome to come up to our management and our HR department to talk and express their concerns.”

Experts say logistics will undoubtedly play a major role in the region’s future. But they say local politicians and economic development officials should carefully consider whether it will make the Inland Empire workforce more prosperous.

“The mantra has been ‘Let’s encourage this industry,’ but without regard to what’s happening to a large segment of the workforce,” said Juan DeLara, an assistant professor of American Studies at USC who follows the Inland Empire economy. “The question is not, ‘How do you stop it?’ It’s about how you at least have an honest conversation about it.”

By Karen Robes Meeks
Long Beach Press Telegram

(Link to article on presstelegram.com)

WILMINGTON >> Los Angeles and Long Beach port warehouse workers have filed a class action lawsuit alleging wage theft and labor law violations against a facility that handles goods for Amazon, Lowes and other major retailers.

Workers said Thursday they are suing warehouse services provider California Cartage Co. and its staffing agencies over what they say are stolen wages and several other issues, including not paying for all hours worked and not complying with the city’s living wage ordinance of $11.03-an-hour with benefits and $12.28 without benefits. Workers said they are paid between $9 and $10.20 per hour.

Cal Cartage did not return a call seeking comment Thursday. Orient Tally Co., Staffing Systems, Inc. and AMR Staffing Inc. also could not be reached for comment.

More than two dozen warehouse workers gathered during their lunch break to cheer and hold up a banner that read, “Respecto para trabajadores de bodegas” — “Respect for warehouse workers” — at a press conference outside Cal Cartage’s warehouse in Wilmington on Port of Los Angeles property.

“This is about a fight for workers’ legal, civil and human rights to a fair day’s pay for a hard day’s work,” said Julie Gutman Dickinson, an attorney representing the warehouse workers. “This is a lawsuit about millions of dollars … that are being taken out of the pocket of the hardworking men and women at this warehouse, who are struggling to live a life of dignity and respect, struggling to provide for themselves and their families.”

The workers were supported by the Warehouse Worker Resource Center, a nonprofit group that deals with health and safety, wage theft and workers’ compensation issues. The center, which is the home of the Warehouse Workers United campaign, has been working for three years to recover more than $1 million in wages they say were earned by warehouse workers.

One worker, Long Beach forklift driver Gregorio Ceron, 41, said he is being paid minimum wage to support his wife and three young children and often has to defer rent payments to pay for necessities.

“We filed this lawsuit, this demand, because our wages are not being respected, and we’re not being treated like human beings,” said Ceron,

“We know they’re violating the law, and we want them to follow the law,” he said.

Warehouse workers and their supporters are calling for a higher minimum wage, better enforcement and fair working conditions for Los Angeles workers.

Contact Karen Robes Meeks at 562-714-2088.

By Chris Kirkham
Los Angeles Times

(Link to article on latimes.com)

A group of warehouse workers at the Port of Los Angeles has filed suit against a major distribution company, claiming that they have been underpaid and subjected to harsh working conditions.

The workers are seeking a class-action suit against California Cartage Co. and several staffing agencies, alleging that more than 500 workers are owed millions of dollars in unpaid wages and overtime dating back to at least 1999.

The complaint, filed Wednesday night in Los Angeles County Superior Court, alleges that California Cartage is required to pay higher than the state minimum wage because it is leasing land from the city of Los Angeles. The city requires contractors and lessees to pay what is known as a “living wage” of at least $11.03 an hour, or $12.28 an hour if the company doesn’t pay for medical benefits.

A lawyer for California Cartage did not respond to a call seeking comment.

The lawsuit contends that California Cartage and its staffing agencies paid only the state minimum wage of $9 an hour, and often failed to pay required overtime when workers were kept after hours. The goal was to reduce labor costs in an effort to “unlawfully maximize their profits,” according to the complaint.

Workers in the California Cartage warehouses unload containers of goods for retailers such as Lowe’s, Amazon and Sears, according to the suit. The goods — including clothes, televisions, refrigerators and furniture — are then put on trucks to be distributed throughout the country.

Many of the workers are immigrants who don’t speak English and have little formal education.

Juan Rivera, a plaintiff in the suit, said in an interview that workers are constantly pushed to meet unrealistic quotas.

“They’ll say, ‘If you don’t work hard enough, there’s more people like you who can do this job,'” Rivera said through a translator.

He has worked for nearly five years at the warehouse for two staffing agencies, but doesn’t believe that he will ever be hired as a full-time employee at California Cartage. “They don’t want the responsibility over the workers,” he said.

The suit alleges that the warehouse workers were required to report to the job site every day, but often were sent home without pay if there wasn’t enough work — a violation of state law, according to the suit. Managers also altered the payroll records to shave hours off at the beginning and end of workers’ shifts.

Although about 80% of the workers are employed by temporary staffing agencies contracted by California Cartage, the suit argues that the company is liable because it exerts the influence over work assignments.

“This is all about low-wage workers living on the margins and being exploited by one of the biggest, wealthiest companies at the Port of Los Angeles,” said Julie Gutman Dickinson, an attorney who is representing the workers.

By Ricardo Lopez
Los Angeles Times

(link to article on latimes.com)

Workers at a Riverside County warehouse and distribution complex for Wal-Mart Stores Inc. agreed to settle a long-running battle over wage issues by accepting $21 million in unpaid wages, interest and penalties.

The proposed settlement of a lawsuit with Wal-Mart and Schneider Logistics Inc. covers more than 1,800 people who worked at three Mira Loma facilities from 2001 to 2013.

The Schneider facilities were fully dedicated to Wal-Mart’s business, according to court documents in a lawsuit brought by the Warehouse Worker Resource Center, the group that announced a memorandum of understanding Monday.

“We are pleased with this proposed settlement,” said Wal-Mart spokesman Kory Lundberg. “Once approved, it will result in the dismissal of the lawsuit.”

A spokeswoman for Schneider Logistics did not immediately respond to a request for comment.

Under the agreement, Schneider would pay the total amount without any contribution from Wal-Mart, according to a person with knowledge of the agreement who didn’t want to be identified because such details weren’t public yet.

The proposed settlement is the culmination of a nearly three-year effort by warehouse workers to address wage and labor violations that they said were endemic in the logistics center, part of a massive industry in Riverside County.

Besides Wal-Mart, dozens of retailers and contractors operate numerous warehouses and distribution centers in the Inland Empire to move goods from and to Southern California ports. The industry accounts for about 114,000 jobs in the region, according to trade economist John Husing.

The warehouse workers group sued Schneider in October 2011, and later added Wal-Mart, winning a key victory.

Judge Christina A. Snyder of U.S. District Court for the Central District of California ruled in February that Wal-Mart could be named as co-defendant in the lawsuit based on evidence that it could be held accountable as a joint employer.

The lawsuit argued that Wal-Mart exercised tremendous control over warehouse operations, including setting productivity metrics and safety standards.

Snyder also denied a motion by Wal-Mart and Schneider Logistics to dismiss the suit.

In February, the warehouse workers sought class-action status. Negotiations toward ending the litigation then turned more serious, said Theresa Traber, one of the lead attorneys for the warehouse workers.

“This is a wonderful settlement,” Traber said. “This is an industry where retail companies like Wal-Mart and the logistics companies try to evade the law…. The giants have finally been held accountable.”

The facilities, operated by various warehouse companies for Wal-Mart since 2001, function together as the largest Wal-Mart distribution center in the western U.S., court documents said.

The suit alleged major wage theft occurring over 10 years against “lumpers” — workers who load and unload boxes by hand from shipping containers.

The workers often worked double shifts — 16 hours a day, seven days a week with no required breaks or overtime premiums — and often for less than minimum wage, according to the suit.

The workers alleged they were instead paid by an elaborate piece-rate system that was found to be illegal and was changed quickly after the suit was filed by the warehouse workers group, which consists mainly of Latino immigrants.

Guadalupe Rangel, 45, one of the workers expected to share in the $21-million settlement, said he first began working as a warehouse worker in 2005 for Impact Logistics Inc.

Impact was one of two subcontractors that employed warehouse workers at the Mira Loma facilities. The other firm was Premier Warehousing Ventures.

Warehouse workers already had won a combined settlement of $1.7 million from those two firms, Traber said.

Rangel, a resident of Bloomington, said that in the first years he unloaded containers during long days that were full of tough, manual labor.

Workers unloaded all sorts of merchandise bound for Wal-Mart stores, including patio furniture, trampolines and above-ground pools, he said in Spanish.

“Thank God we’re now going to receive compensation for the years before when they didn’t pay us well,” said Rangel, now a Schneider employee. “I see those years as abusive … when we’d only earn $100 to $150 a week.”

The proposed settlement is expected to receive final approval later this year, Traber said.