Later this year, a five-story, 3.4 million square foot fulfillment center will open near the intersection of county highways N and TT in Cottage Grove (~15 minutes outside Madison). We drive past the site frequently, and it’s big enough that you don’t really miss it, even if you’re not looking for it. What was previously farmland will soon be one of the largest Amazon facilities in the country.
The new facility is positioned as a “middle mile” spoke of Amazon’s distribution network, meaning it will serve primarily as a hub to transport goods from larger distribution centers to more local fulfillment centers. (One of us has a particular soft spot for the concept as we spent a summer in business school building a distributed logistics company for the retail industry. It was called “Converge Logistics”. Unfortunately it didn’t converge into anything. RIP. Though you wouldn’t be reading this if it did… a small reminder of roads not taken).
The headline story on the Cottage Grove facility is straightforward: economic development, new jobs, a boom for the village’s tax base, slightly faster delivery of those little brown packages to your door.
But for an industrial employer in Dane or Rock County, there’s another way to read that ribbon cutting. Fifteen hundred job openings and competitive Amazon wages, targeting exactly the kind of worker that already works for you. Amazon fulfillment roles and traditional manufacturing jobs aren’t identical, but they draw from the same talent pool. Someone working second shift at a local metal fabrication company is a profile Amazon will recruit. Even employers who lose no one directly will feel it, because the floor on what it takes to retain a second-shift operator just moved. It’s a local version of something that happens nationally: job growth in one place creating pressure somewhere else, in ways that rarely show up cleanly in the data.
And zooming out to the national employment landscape, over the past fifteen months private sector job growth has been almost entirely carried by one sector.
Health care has added jobs every month consistently, and at a scale that dwarfs everything else in the chart. Gad Levanon of the Burning Glass Institute made the point in a recent note: strip health care out, and private sector job growth last year was essentially flat. The rest of the economy, in aggregate, went nowhere.
Federal government employment is down roughly 327,000 from its peak. Transportation and warehousing has shed more than 150,000 jobs from its high earlier in 2025. Financial activities, information, professional and business services (the white-collar core) are all trending negative. These are the places where AI and automation are compressing the amount of labor needed to do the same amount of work.
And yet the topline keeps printing positive, because when one large sector is adding tens of thousands of jobs a month the headline still reads like growth. One sector carrying the economy looks identical to broad-based expansion if you don’t look underneath.
This brings us back to Cottage Grove. That project will show up as job creation in the data. But locally, it’s also a demand shock for a very specific slice of the workforce. It pulls from an existing labor shed. It changes the competitive dynamics for employers nearby. It moves wages at the margin. Job growth, whether nationally or locally, doesn’t stay neatly inside sector lines. It creates ripple effects in markets that don’t show up in any chart until they’re already happening. The workers Amazon pulls don’t come from nowhere. And the sectors losing jobs nationally aren’t losing them in a vacuum either.
If you’re calibrating your hiring strategy against the topline number, you’re almost certainly looking at the wrong signal. What matters is what’s happening in your sector and in your geography. And in our corner of the state, both of those things are moving in ways the monthly print won’t tell you, at least not until well after the fact.
Until next time,
Your Spherion WI & Northern IL team