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Amazon robots outnumber humans at new Salt Lake City facility

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SALT LAKE CITY — While the human workers are isolated at various workstations throughout Amazon's new shipping center, robot-powered bin towers and whirring conveyors dominate a sprawling operation that processes hundreds of thousands of smile-bearing packages every day.

Utah elected officials and media members on Wednesday got a tour of the 855,000-square-foot facility just west of the Salt Lake City International Airport. While operations began there last August, an Amazon official said the fulfillment center has now reached its full staffing of over 1,500 employees and is in operation 24 hours a day, seven days a week.

An Amazon spokesman said it's physically impossible for any single shipping center to contain the entirety of the online retailer's merchandise, and many items are shipped by third parties, but the Salt Lake facility does stock 15 million of the company's "most popular" items. He also noted that Utah's only Amazon operation specializes in small-to-midsize items, and most of the packages going out the door are headed to customers in Utah and nearby areas.

Gov. Gary Herbert speaks at the grand opening of the Amazon Fulfillment Center in Salt Lake City on Wednesday, April 17, 2019.

Gov. Gary Herbert speaks at the grand opening of the Amazon Fulfillment Center in Salt Lake City on Wednesday, April 17, 2019.

Kristin Murphy, Deseret News

While the company took a hard pass on the state's application last year to become the site of Amazon's secondary headquarters, or HQ2, Gov. Gary Herbert touted the company's decision to build a shipping center in Utah as an economic windfall.

"(Amazon's) technological advancements are nothing short of spectacular," Herbert said. "We as a state understand the ability for the private sector … to do what they do best — create economic expansion, wealth creation which creates jobs, in turn which raises the quality of life we have in this state."

Amazon General Manager Mike Taylor said the facility utilizes "thousands" of robots in the process of receiving, picking, packing and shipping a slice of the daily orders received by one of the world's most valuable companies. How valuable? At midday on Wednesday, Amazon stock was trading around $1,866 per share, giving the company a market capitalization of nearly $920 billion.

Last September, the company briefly passed the $1 trillion mark, something only achieved by one other U.S. company — Apple — which has since also slid back under the mark.

While Amazon shareholders and executives have been made millionaires and billionaires by the Seattle-based company's arc of success since launching as a bookselling outlet in 1994, and company founder and CEO Jeff Bezos was personally worth a purported $150 billion before his recent divorce, most of the employees at the new Utah facility are at the other end of the economic spectrum.

Amazon received a $5.7 million post-performance tax incentive package from the Governor's Office of Economic Development last year, but the potential rebates are only for 130 of the positions at the new facility. Those are the only jobs that pay over the Salt Lake County average wage. Most of the rest of the positions begin at the $15-an-hour rate that became the company's corporate minimum wage last fall. Initially, the jobs at the Salt Lake facility were advertised at $12.50 per hour.

While Amazon's new minimum wage equates to about $31,200 in annual earnings, the rate is still short of a figure revealed in a June 2018 report on Utah housing affordability that noted the minimum wage for a full-time worker to afford a two-bedroom apartment in Salt Lake City is $18.85 per hour.

Juliette Tennert, director of economic and public policy research at the University of Utah's Kem C. Gardner Policy Institute, told the Deseret News last fall that the wage change bodes well both for individual Utah Amazon employees and the state's economy.

"Given that $15 per hour represents a fairly significant boost above what we were initially expecting, $12.50 an hour, we should see more money filtering through the economy for household spending and additional economic growth," Tennert said.

"It’s one thing if money is just shifting around in Utah, that’s not a net gain, but the fact that Amazon is a global company means that wage bump is truly net new money."

Tennert believes the move could also put pressure on other Utah companies that are paying less than $15 an hour to make changes to compete for employees in a state that continues to see very low unemployment rates.

"With Amazon here, expanding and ramping up to a sizable workforce and then layering on this wage increase, that will increase competition for skilled labor," Tennert said. "I think that we could anticipate upward pressure on wage prices as other companies make moves to compete."

Sen. Mike Lee, R-Utah, echoed Herbert's celebration of Amazon's decision to site a fulfillment center in the state, and described the company as a perfect fit for Utah, in spite of most of the new jobs falling well below the state's average income level and criticisms leveled at the company about its strategies being a small-business killer.

"This is an amazing facility," Lee said. "We're honored and very fortunate to have it here in Utah. There are certainly stories about people who have been displaced by evolving technologies … but I've also met with countless people who have started businesses in Utah based on the Amazon business model who have benefitted to a significant degree.

"There are people we met today … a young man from Provo who got a job here who started at that lower rate but is now a salaried member of the Amazon leadership team. The idea is that people can get a job and if they do well, they can be promoted in the company."

Lucia Ponce works at a “pick” station at the new Amazon Fulfillment Center in Salt Lake City on Wednesday, April 17, 2019.

Lucia Ponce works at a pick station at the new Amazon Fulfillment Center in Salt Lake City on Wednesday, April 17, 2019.

Kristin Murphy, Deseret News

Taylor walked tour attendees through the workflow at the facility, pointing out where incoming merchandise arrives, discussed how items are sorted into smaller bins that are stacked into towers that are mostly maneuvered around the warehouse by robots about the size of a square coffee table and around 6 inches tall. These bots can be seen in and around the facility, mostly on the other side of chain-link fences and engaged in a kind of stunted, but coordinated set of maneuvers, constantly moving merchandise toward its ultimate destination. All the sorted and picked items funnel to packing stations where completed orders are packaged into the familiar cardboard boxes and conveyed directly to waiting shipping trucks.

One employee, Lucia Ponce, was busy at a merchandise "pick" station. Her job is to remove single items from a stack of small bins atop a line of nearby robots and place them in a larger bins on a conveyor system. Which item to pick, and where to put it, is a process guided by lights. A small spotlight targets the bin from which she needs to pull an item, and a large button illuminated with green LEDs shows her where to put it. Once in the bin, she pushes the button, and grabs the next item, and so on. When the big bin is full of the necessary items, it's simply pushed onto a live conveyor that whisks it away to another area.

According to the company, Amazon operates some 75 fulfillment centers in North America at which about 125,000 full-time workers are employed. Temporary hires for the holiday shopping season can swell those forces by almost 100 percent.