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Why low unemployment is bad news for UPS and Fedex

Fed Ex Estimates Record Day For ShippingFed Ex Estimates Record Day For Shipping
A FedEx worker peers over a pile of boxes at the FedEx sort facility at the Oakland International Airport December 18, 2006 in Oakland, California. It could be worse this year with less workers.Photograph by Justin Sullivan — Getty Images

The unemployment rate has hit a seven-year low of 5.1%. While that’s good news for the working public, it’s bad news for major retailers looking to hire for the holidays.

Some of those big box retailers are already struggling to find enough seasonal workers, reported the Wall Street Journal. And, soon, major shipping companies UPS (UPS) and FedEx (FDX) will be dealing with the same dilemma.

As e-commerce continues to gain traction, the number of warehouse workers have also increased substantially, rising to 680,500 workers in July from less than 500,000 in 2005.

That’s putting pressure on finding new workers and even prompting many to start raising pay, according to the WSJ:

Starting warehouse wages, which have been stagnant for years, have been rising by about $1.50 to $3 an hour to attract workers in some markets, according to logistics staffing firm ProLogistix. The firm said that in this holiday season, temporary jobs—especially at e-commerce companies—start in a range of between about $11 and $13.50 an hour, up from between about $9 and $11, though it varies significantly by region.

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