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Sept. 4, 2020 - Supply Chain Digest Flagship Newsletter

This Week in SCDigest

bullet The Labor (Day) Supply Chain 2020 bullet SCDigest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet New Stock Index

New Cartoon Caption Contest

bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts



A new report from ARC Advisory analyst Clint Reiser lays out the
landscape across WMS, WES and Warehouse Control System (WCS)
software, detailing the WES value proposition, and describing
important changes in the WES market.


first thought


Supply Chain Graphic
of the Week
The Top 100 US
Private Truck Fleets


This Week's Supply Chain

by the Numbers

The Great Smart Phone Caper by some Amazon Drivers
Autonomous Trucking Technology Firm Ike Seeing Orders
US PMI has Strong August Level


Pandemic Changing Consumer Behavior


July 30, 2020 Contest

Show Us Your Supply Chain Wit

It' Back! SCDigest's Weekly

Supply Chain Stock Index



The State of Retailer-Vendor Supply Chain Relationships 2020

Are Things Getting Better and More Collaborative - or Heading in the Other Direction? Third Biannual Study - Please Participate


Weekly On-Target Newsletter:
Sept. 2, 2020 Edition

Cartoon, Top SCDigest Stories of the Week

Revisiting SCDigest's Framework on RFID Process Change

Dan Gilmore

What to Do about Lack of Gender Diversity in Supply Chain Management

Abel Tamanji

Senior Student at University Of Wisconsin-Whitewater

When was the peak of US manufacturing workers?
Answer Found at the
Bottom of the Page

The Labor (Day) Supply Chain 2020

Monday of course marks the annual Labor Day holiday both here and in Canada. Starting in 2011, I have written a column on the state of the labor supply chain in conjunction with this event. It was popular enough that I have continued in each year since. It's a lot of work, but well worth it.

From my view, it was mostly a quiet year on the US labor front, with a couple of exceptions, as obviosly the pandemic put everything else in the back seat.

The percent of total US workers that are union members dropped yet gain in 2019, the most recent government figures, to 10.3%, down from 10.5% in 2018 and 10.7% in 2017. Union membership is now dominated by public sector workers such as police and teachers.


Inflation in warehouse wages finally starting to take hold in the past few years, as one would expect in the face of rise in demand. It's way overdue, actually.


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Unionization rates nationally are at 33.6% in the public sector, down from 33.9% in 2018, and just 6.2% in the private sector, down from 6.4% in 2018.

All this of course continues the powerful long-term trend of a steady union decline since the Labor Department started reporting on it in 1983, when overall unionization was at 20.1% and 16.8% in the private sector. Those numbers themselves were well down from previous decades before this metric was officially tracked by the government.

I will note part of that decline in private sector unionization rates is due to the loss of some 6-7 million US manufacturing jobs since 1983, as manufacturing is clearly more organized than the service sector, but that is far from the only factor. Unions have clearly lost appeal to many, especially in the South, where many new manufacturing factories have been headed for wo decades.

Together, there were 14.6 million private and public sector employees in a union in 2019, about the same as the previous year. But compare that to the 17.7 million union members in 1983, when the total US labor force was much smaller.

There are also huge differences between states. South and North Carolina (2.2% and 2.3%, respectively) had the lowest unionization rates in 2019. The next lowest rates were in Virginia and Texas (each at 4.0%) and Georgia (4.1%). Eight states had union membership rates below 5.0%. Two states had union membership rates over 20.0% in 2019: Hawaii (23.5%) and New York (21.0%).

The percent of US manufacturing workers that are union members fell to 8.6% last year, down from 9.0% in 2018. Those numbers are a bit lower than the percent of manufacturing workers covered by union contracts, such as those that opt out in right-to-work states, with coverage of 9.4% last year.

Ponder that - less than one in 11 US manufacturing workers are unionized today, versus 17.5% in 1994. According to, 38% of private sector manufacturing workers were in unions as recently as 1973.

Don't think this downward union trend is only a US phenomenon. Unionization rates in labor-loving Sweden, for example, have fallen from about 95% in the mid-1990s to around 70% today. Many other countries mirror US unionization rates more closely. Unionization in France - generally considered very supportive of labor - has fallen to just 10% of all workers, and even lower in the private sector. Union membership is higher in the UK, at about 23.5%, but that's down from more like 40% in the mid-1990s.

In July, there were about 8.46 million non-supervisory manufacturing workers in the US, down from 8.91 million a year ago, due to the pandemic. That is still well up from the bottom of the recession in 2009, when we fell to about 8 million shop floor workers, meaning we've added about 460,000 manufacturing jobs since then - not a lot in 11 years. In 2004, there were just over 10 million factory floor workers - we're down just about 1.5 million positions from that level, and much more from the 1990s.

That obviously puts general downward pressure on wages, though the lack of wage growth isn't nearly as bad as I would have guessed, based on all the media reports.

According to the BLS, the average hourly wage (I believe including benefits) for shop floor manufacturing workers was $22.87 in July, up from $22.19 in 2019, or about 3% growth year-over-year, which is pretty good considering the current state of the economy.

That's also up from the $18.29 per hour in July 2009, or a rise of 25% over 11 years. That's a cumulative average annual growth rate of 2.05%. So wages have risen modestly, about equal with inflation, and thus not enough to improve a worker's lifestyle, especially with healthcare costs taking more and more of the paycheck.

Meanwhile, there has been very steady growth in warehouse jobs, though they represent just a tiny fraction of manufacturing positions. There are now about 1.18 million non-supervisory warehouse workers in the US (as of July), about flat with 2019, after growing 10% the previous year, with the flat year-over-year change surely a factor of the pandemic.

The number is substantially higher than the 637,000 warehouse workers in 2010, mening a rise of 85% over 10 years - but even with that growth they only represent about 13.9% of manufacturing floor jobs - though that percentage is rising. (I'll note some jobs at plant warehouses are counted as manufacturing positions.)

In terms of wages, average non-supervisory pay for warehouse workers was $18.43 in June, actually down just a bit from June 2019, versus a rise of 4.6% the previous year. That's also about 24% less than average manufacturing rate. Pay for warehouse workers was at $15.37 in June 2010, meaning DC wages have risen only 20.2% over the past decade - and and almost all of that starting in 2017.

Inflation in warehouse wages is finally starting to take hold in the past few years, as one would expect in the face of rise in demand. It's way overdue, actually.

Despite the current slow down in warehouse job growth, cost increases and especially challenges finding and retaining labor is driving the huge current interest in distribution automation of all sorts.

Labor strikes, once such a commonplace event, have almost disappeared, at least outside the teacher ranks.

Last year, there were about 25 strikes involving more than 1,000 workers in 2019, up from 20 in 2018. But that compares 69 in 1986 and 276 in 1976. That included the 29-day work stoppage at GM last year.

Almost all of those major strikes were outside of manufacturing, we will note, and include things llike teacher strikes in big cities.

I do not believe that there was a important "labor's last stand" type of strike or orgqanization drive over the past year, ala the failure of the UAW to organize workers at a Tennessee Volksgagen factory in 2018.


There were no additions in the number of "right to work" states in 2019, under which employees can't be compelled to join unions. Once mostly found only in Southern and some Western states, recently some in the Midwest have jumped on the bandwagon despite furious opposition from labor. There are now 27 such states, but no new ones appear to be on the horizon.

Switching gears, Amazon saw a number of supposed walkout by workers at a few fulfillment centers in the first few months after the start of virus crisis, over complaints by some that the company was not doing enough to protect workers from infections, but the actions all fizzled.

In April, the web site Business Insider reported that Amazon-owned Whole Foods supermarket chain has been using an interactive heat map to monitor its 510 locations across the US and assign each store a unionization risk score based on such criteria as employee loyalty, turnover rate and racial diversity. But nothing seemed to have come from the news.

Looking at the government side, with what seems to be a good shot at winning the White House in 2020, candidate Joe Biden says he will end right-to-work laws at the state level, among other vey pro-labor changes. Those include holding corporate executives personally accountable for violating labor laws or interfering with organizing efforts. Next year's Labor Day Supply Chain column could be interesting.

In August, the provisions of California's controversial and absurdly complicated AB 5 legislation went into effect. which (greatly simplifying) makes it very diffcult for a worker to be paid as a contractor, forcing companies to classify them as employee instead, and thus entitled to benefits, unemployment insurance, etc.

This would have impacted, just for example, drivers for Uber and Lyft - and Lyft actually briefly suspended service in the Golden state until a judge put a temporary injunction on enforcement of the law. The supply chain issues? The law would mostly likely eliminate the notion of contract truck drivers or independent owner-operators, with big impacts on costs and capacity, the latter as trucking firms leave the state.

Contract drivers are especially common in drayage operations at California ports. The even bigger question: will this type of law make its way to other states - or be struck down (for truckers at least) due to laws giving the federal government control of all transportation regulations?

In late December 2019, the Trump adminstration reversed several actions by the Obama White House that speeded up the process from the time a union organization drive to a vote. The longer that process takes to play out, the less likely workers are to vote to unionize.


There's a lot more, but I am well out of space. The issue for labor is still not yet "here come the robots," but it will be soon enough.

Any reaction to our summary of the labor supply chain 2020? Let us know your thought at the Feedback section below.


On Demand Videocast:

Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon.

Now Available On Demand

On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

This videocast will provide a walkthrough of two ways to formulate a MIP, present an example port, and discuss port operations.

Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

Now Available On Demand

On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


After our column last week noting we've turned from toilet paper shotages to "where's the beef?", our friend David Schneider of David K. Schneider & Company sent us this nice email explaning how the meat supply chain works. Now you know!

Feedback on the Meat Supply Chain:


For beef (and lamb/sheep), there are two stages of meatpacking - Primal and Final.

Primal Cuts are the large cuts - whole sections of the animal, cut away from the carcass, later packed for processing into final cuts.

Some of the larger packing operations run from kill to final in the same complex - the traditional way that people think of a meatpacking plant. But many of the new massive campus operations, including the JBL and Tyson sites in the news, ship under long term contracts meat packaged for retail or portion control use.

For decades the meat supply chain operated at two levels; packing houses that shipped primal-and sub-primal - packaged into vacuum bags and frozen for shipping to grocery stores - where meat cutters cut and package the final cuts for sale at that location.

Today, a sizable portion of the production from the kill line is still primal to package and shipped to other companies/facilities that do the Final cuts. Most of the consumers of primal and sub-primal are wholesale distributors, local butchers, Costco, and Asian grocery, where there is still local meat cutting.

A large portion of the US grocery market no longer operates local meat rooms in their retail locations. Walmart is one significant example of the retail scene, as is most of the Royal Dalheize group (Stop-n-Shop, Giant), Aldi, Lidl, and other growing chains. Those contracts with retailers are under tight margins, costs supported by the typically much higher foodservice contracts with bigger and steady margins.

The supply chain innovation that Tyson, JBL, and the rest employed was centralization and concentration of labor into these large campuses - close to the production of the animals. Our modern network of refrigerated logistics - temperature controls trucks and warehouses - helps facilitate the consolidation of the final steps of meat cutting from local to the market to local to the source.

Primal cuts flow between companies in the meat industry like cash - and interesting features in the USDA regulations allow for long term freezing of primal cuts that can sell later as fresh meat. There are times where hundreds of millions of pounds of frozen primal cuts sit in 3PL freezer warehouses. I suspect at this moment, hundreds of millions of pounds of frozen primal cuts sit in warehouses, unable to move to the market because there are fewer places that can do the final cut. I suspect the owners of this meat don't want to ship these cuts because to ship now erodes the future profit margin of the packaged and portion-controlled product.

The COVID virus exposes a substantial risk of consolidation and full-integration of production in the supply chain.

David K. Schneider
David K Schneider & Company, LLC    


Q: When was the peak of US manufacturing workers?

A: July, 1979, at 19.5 million

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