Union organizers question wages at McKesson warehouse

Two Teamsters union organizers questioned Friday whether drug distributor McKesson Corp. would pay fair wages at a new warehouse in northern Iowa.

"We as a local (union) and your brothers and sisters in Minnesota are concerned about the jobs being shipped down here at a discounted rate, to be honest with you," Troy Gustafson of Teamsters Local 120 told the Iowa Economic Development Authority Board Friday.

Last month, local officials announced McKesson as the company behind a $65 million warehouse project in Clear Lake. Three weeks later, McKesson said it would close three other Midwest warehouses and move those operations to Iowa.

Those closures include a plant in Little Canada, Minn., where Gustafson represents the local Teamsters union. Gustafson said Friday his members are paid about $21 an hour.

The authority granted McKesson $4.2 million in tax credits and a $170,000 forgivable loan for the project. McKesson has to create 164 jobs that pay at least $14.79 an hour to receive the incentives.

"If they're going to be saving money by moving jobs from Minneapolis down to Clear Lake, Iowa, they need to keep the economic benefits the same, including the wages," Gustafson said.

Authority Director Debi Durham told Gustafson it's too early to declare exactly what McKesson would pay its Clear Lake workers.

McKesson received incentives under the authority's High Quality Jobs program, which requires companies to pay workers wages that are at least the same or higher than an area's laborshed wage, meaning the average wage paid by employers in a certain area.

Clear Lake's laborshed wage is about $14.79 an hour, according to the authority.

"We will not incentivize any jobs underneath that," Durham said.

The Clear Lake warehouse is expected to open by May 2016, and hiring will start in the next few months.

"Although the compensation plan for the new Clear Lake facility has not yet been finalized, we are confident that we will be offering our employees wages that are competitive for the local market along with great benefits and outstanding working conditions," McKesson spokeswoman Kristin Hunter said in an emailed statement.

Jon Thomas, an organizer for Teamsters Local 239 in Iowa, applauded the authority for bringing the McKesson project to Clear Lake.

"Fourteen dollars an hour in that area, that's awesome. That's going to make a huge difference in our economic development," Thomas said.

Still, he took issue with the gap between the proposed Iowa wages and those paid in Minnesota.

"Now, when I talk to our counterparts in Minnesota … that's where my issue comes to (ask if) 'an Iowa worker's not worth what a Minnesota worker is,' " he told the board.

San Francisco-based McKesson had $137.6 billion in revenues for its 2014 fiscal year and net income of about $1.3 billion.