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How Rust Belt company towns evolve in the age of e-commerce

Land rush: Rust Belt towns turning into e-commerce hubs
Land rush: Rust Belt towns turning into e-commerce hubs 06:03

Bethlehem Steel casts a long shadow over Pennsylvania's Lehigh Valley. The blast furnaces remain, even though they went silent more than 20 years ago. The mill's closing took with it a big chunk of the region's high-paying blue-collar jobs, and the news at the time made it sound very final.

But back then, no one envisioned e-commerce.

The demand for next- or even same-day delivery has dumped huge challenges on the steps of brick-and-mortar stores, but it has also created a demand at huge job-hungry distribution centers. Don Cunningham, president and chief executive of the Lehigh Valley Economic Development Corporation, said, "When people get on their iPhone and they order every imaginable product to show up at their doorstep, it's not being brought there by magic. It takes, quite frankly, an army of people to do that."

Today, there are almost as many warehouse jobs in the region as there are manufacturing positions. That's a big milestone, Cunningham told correspondent Lee Cowan: "From a purely economic standpoint, for high school diploma or less workers, it's created something that, quite frankly, hasn't existed in this area since the days of cement mills and slate quarries and steel mills."

Many manufacturing jobs in Rust Belt communities have been replaced with warehouse fulfillment jobs for online retailers.  CBS News

Nationwide, Amazon alone has added more than 500,000 jobs just since 2020, making it the country's second-largest private employer, just behind Walmart.

Most e-commerce warehouses also offer benefits, and wages pushing $20 an hour, which effectively makes that the minimum wage, at least around here.

"We say, anybody that wants a job, there's a job for you in that sector," according to Susan Larkin, vice president of Allied Personnel Services. That said, Larkin warns that, while the money may be good, warehouse work can also be pretty grueling. Employers, she said are looking for "warehouse athletes."

"That's a term? Warehouse athlete?" asked Cowan.

"That's a term, that they consider their employees 'warehouse athletes.' So, you know, going into that role, it's going to be a physical job."

Long hours with often rigid quotas make for a pretty high turnover rate in these jobs. But shortening supply chains in now the name of the game, with nearly all retailers competing for warehouse space all over the country to fuel their own online sales.

Home Depot is just one of many companies maintaining massive distribution centers in the Lehigh Valley.  CBS News

Adrian Ponsen, who analyzes industrial real estate for CoStar, says that, all told, nearly two billion square feet of new warehouse space has been built in this country in the last five years. "That's equivalent to about 33,000 football fields worth of distribution centers," he said. "You can see, places like Dallas, Inland Empire in southern California, Chicago and Atlanta, we're seeing record spending. A recent Amazon facility that was built on the site of a former GM assembly plant in Wilmington, Delaware, is the largest commercial structure that's ever been built in Delaware."

In the Lehigh Valley, county executive Lamont McClure is fighting back. "We're at an inflection point," he said.

McClure fears that the region's rural character is now in jeopardy. "We admire the folks who are working hard in these warehouses, and we don't want their jobs to go away. What we're saying is we don't need any more," he said. "We're done."

With commercial real estate expanding, the Lehigh Valley's rural character is in jeopardy.  CBS News

He knows he can't match the deep pockets of a UPS or a Target, both of which have a big footprint here, but he's still trying.  McClure has spent $12 million of the county's money in the last four years buying up parcels of farmland in order to preserve them from warehouse development, and in the process, he hopes, help clean up the air, too.

"It's dangerous and it's scary," McClure told Cowan. "And our folks have just had enough of the truck traffic."

"And noise!"

"Yes. But there's a lot of air pollution in the Lehigh Valley."

Lehigh Valley County Executive Lamont McClure, with correspondent Lee Cowan.  CBS News

Trucks often use Main Street – a two-lane road through historic downtown Bethlehem – to get to a nearby highway. Breena Holland, an associate professor at Lehigh University, has been measuring the amount of black carbon particles in the exhaust from passing trucks. And here, she said, it's particularly concentrated. 

She showed Cowan a readout of traffic emissions: "That spike right there is just from that big, white 18-wheeler that just passed," she said.

"What we're trying to do is measure lung level episodic exposures – what people are exposed to on the street when the trucks are driving by," she said.

Lehigh University professor Breena Holland monitors air pollution levels on Main Street in Bethlemen, Pa.  CBS News

Still, with all the increase in traffic does come an increase in jobs. The Lehigh Valley is one of the few Rust Belt areas to have actually grown, instead of dwindled. For Don Cunningham, of the Lehigh Valley Economic Development Corporation, that's a win., But this area knows perhaps better than anywhere that even the best booms … generally have a bust.

"Life is an evolution, and economies are an evolution," Cunningham said. "And I think anybody who builds an economy thinking it's going to be that way forever is a bit foolish. Things are always changing."

Don Cunningham, of the Lehigh Valley Economic Development Corporation, with Lee Cowan at the former site of Bethlehem Steel, which did not survive the 20th century. CBS News

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Story produced by Mark Hudspeth. Editor: Ed Givnish. 

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