Bidder beware: You'll get hooked on Amazon
Amazon has just launched a new reality TV series. They are looking to build a new, second headquarters in a North American city other than Seattle. They call it HQ2.
This series will pit other cities in a bidding war to host a $5 billion investment and 50,000 new “highly paid” Amazon employees for the lucky winner. Let the bidding war commence!
The show should be streaming over the next couple of years. It’s called “So You Wanna Be A Company Town!”
Doubtless many competitors will step up. Another title could be, “Who Wants to Be Detroit?” The answer is no one. Even though Detroit is a lesson in what can happen to company towns linked to a single industry, Amazon offers a future of drones, robot workers and biospheres. It is a future often portrayed as all upside.
But bidder, beware. There are many good things about Amazon and about the security a company town can bring — and make no mistake, Seattle is an Amazon company town. No city in America is so dependent on a single occupier of office space. We’ve been dubbed “America’s biggest company town.” We even redeveloped an entire neighborhood, South Lake Union, to accommodate them, but it wasn’t enough. It never is.
They used to say if Boeing sneezed Seattle caught a cold. True that. Many of us remember the early 1970s when the Boeing boom went bust and they laid off over 60,000 workers in Seattle alone — two-thirds of their workforce. We swore after that we’d never get dependent on a company again.
Fast forward to today: Imagine if Amazon caught a cold. Seattle’s downtown would come down with Ebola.
Cities considering bidding on Amazon better think about dependency. Amazon has deep pockets and is rapidly metastasizing. Can your city stand on its own without it, or will you become addicted to the opioid of its prosperity?
What’s wrong with prosperity? Today, it comes with a number of problems. In Seattle, the influx of Amazon workers has made the city unaffordable to most folks. The median home price is $730,000, median household income is $80,000, but a majority of tax-filing Seattle households earn $50,000 or less. The American dream here for non-Amazonians is an hour-and-a-half super-commute on a transportation system that is costing a fortune to slowly build out (federal dollars ain’t what they used to be). We are being San Francisco-ized. Millennials are being priced out. So much for the future.
Homelessness is up — not solely Amazon’s fault, but the real estate boom is a contributing factor. Seventy-five percent of the homeless are local, and many report they wound up on the streets after being priced out of housing. The new apartments being built house people who make Amazon salaries.
We’re trying to figure out a way to tax high-earners or companies like Amazon to help solve these problems, but a city income tax is a non-starter.
Amazon will look for a low-tax environment. Such entities never have local loyalty, they answer to shareholders. In its HQ2 town, Amazon will use, as big corporations do, leverage to gain incentives, tax giveaways or exemptions and free infrastructure. Boeing did the same thing in Washington, and used moving their corporate headquarters to Chicago and building planes in South Carolina to scare local lawmakers into additional concessions for less benefit. Dominic Gates, the chief Boeing-watcher at the Seattle Times, predicts more of the same from Amazon. HQ1 and HQ2 will squeeze two cities like a vise.
Lots of people blame Amazon and Amazonians for our problems, fairly or unfairly. Hipsters have complained of “Amholes” lousing up the club scene, the dating scene, of killing off so many beloved bookstores (then having the gall to start their own). Of having a “bruising” workplace.
If Amazon comes to your town, you might expect your local culture to morph.
So, before your city sends in that proposal, you should think more broadly about the impacts. Ask not what you can do for Amazon, ask what Amazon can do for you. And to you.
Meanwhile, I’ll be eating popcorn and streaming Amazon’s new reality series on Prime.