Amazon’s New Stanton facility could provide economic boost, challenge for small businesses, officials say

Amazon’s efforts to attract 600 workers for its new warehouse in New Stanton is like a double-edged sword for Westmoreland’s economy — great for job creation but potentially tough on small businesses that must compete for talent with the multibillion-dollar behemoth.

“It’s great that they have selected New Stanton,” but there is a concern that the package delivery company will attract employees from their existing jobs in small business, said Daniel DeBone, president of the Westmoreland Chamber of Commerce.

Attracting and retaining workers is still a major issue for businesses, DeBone said.

“Small business is the bread-and-butter of our economy. We want to make sure our small businesses are continuing to flourish,” he said.

Amazon is seeking employees at a time when help wanted signs still are numerous at businesses in the county, where the jobless rate is 3.5%. To that end, Amazon is planning another hiring event from 11 a.m. to 3 p.m. Aug. 2 at the PA CareerLink office at the Westmoreland County Community College near Youngwood.

Amazon’s representatives were pleased with the response from prospective job seekers during a hiring event last week, said Janice Albright, site administrator for the PA CareerLink office near Youngwood. About 140 people had received information about the jobs at Amazon, Albright said.

Amazon looking to fill 600 slots at New Stanton “should have minimal impact” on businesses in that immediate area because New Stanton is easily accessible from other counties, said Majestic Lane, chief equity officer for the Allegheny Conference on Community Development, a Pittsburgh-based regional economic development organization. Allegheny County workers can reach New Stanton via the Pennsylvania Turnpike; those in Washington County have access to the site via Interstate 70; and central Fayette County is connected by way of Route 119. Lane said its draw could even stretch into Ohio and West Virginia.

“The businesses can find other workers. We don’t really expect a negative impact” on the job market, Lane said. There were 6,500 unemployed workers as of May in Westmoreland County, in addition to 20,000 in Allegheny, 2,200 in Fayette and 3,400 in Washington, according to the state’s Center for Workforce Information and Analysis.

The owner of Castle Co-Packers LLC, a Latrobe-based packaging of beverages such as tea, sports drinks and energy drinks, agrees with Lane’s assessment of its impact on the job market.

“I don’t think Amazon has had any employment impact,” said Brian Dworkin, president of Castle Co-Packers.

Dworkin said his problem in finding workers predates any push by Amazon to hire employees for its 1-million-square-foot warehouse near the New Stanton turnpike exit.

“We would have fired up three more (packaging) lines if we had the employees,” Dworkin said.

Amazon’s demand for workers probably will not make it any harder for Mark Petros to find employees at his Greensburg Machine & Driveline shop because he has a need for skilled labor.

“They’ll have a lot of applicants because you don’t need to have a college education or training,” Petros said of Amazon.

While Amazon’s wage for entry-level jobs for its inbound cross dock facility is $17.75 an hour, with benefits that include health insurance and paid vacation, Dworkin said he is not worried that the delivery company’s wage structure would make it more difficult to find workers. Employees at Castle Co-Packers earn more money as their skills increase, Dworkin said.

Amazon’s entry-level wage is more than the average $15.38 an hour for entry-level jobs for laborers and freight truck material handlers, according to state employment data. The average wage in the seven-county Pittsburgh region for experienced warehouse and material handler workers is about $22 an hour, according to state data.

While there may be wage pressure on some small businesses that can’t compete with Amazon’s wage structure, Lane said the new employer pumping possibly $1.8 million a month into the area’s economy can help businesses because those workers likely will be spending their money locally.

“The wages are a way for the market to balance itself out. It’s a good thing for the workforce,” Lane said.

There can be an impact on an existing wage structure anytime a new employer enters the labor market, said Brianne Summy, human resources director for Rochling Machine Plastics in East Huntingdon, a customized plastic component manufacturer.

“It’s important to see what other employers are offering … to tailor our benefits to better compete,” Summy said.

Summy said she did not believe it would be likely that the company would lose veteran workers to Amazon. The plastics company is looking in the same pool of workers as Amazon, seeking to fill assembly positions.

“It’s a challenge for everybody,” Summy said.