In September, Amazon announced it was looking for a city in North America to build its new headquarters in North America, and announced it was soliciting proposals from cities and regions throughout the U.S., Canada and Mexico. Among Amazon’s announced “decision drivers” are government tax credits and exemptions, grants, fee reductions and other incentives meant to entice the company. Amazon stated it wants a “business friendly environment and tax structure” for the location of its new HQ.
The announcement set off a frenzied bidding war as municipalities seek to land the new headquarters by doling out taxpayer subsidies and other incentives, despite the fact that Amazon is the largest retailer in the world and one of the planet’s biggest and richest companies.
New Jersey publicly proposed $7 billion in tax incentives, including $5 billion in state tax relief over a decade and $1 billion each in breaks on property taxes and income taxes from Newark. It would be the largest tax incentive ever offered by New Jersey.
The mind-boggling amount of tax incentives offered by New Jersey shows the lengths to which governments are willing to go to woo Amazon, and how fierce the competition is among the hundreds of cities making proposals. But it’s important to consider that Amazon will make its decision on where to locate its new HQ on factors other than tax incentives, including proximity to airports and highways and quality of mass transit, local universities and schools and communications networks. The emphasis on incentives and the bidding war they’ve created is simply a cash grab by Amazon and an attempt to get as much taxpayer money as it can.
We support job creation—it’s a good thing to promote economic growth and more jobs. But according to the Institute for Local Self-Reliance, a nonprofit research and educational organization, Amazon’s growth has eliminated approximately 150,000 more jobs than it has created because it displaces sales at brick and mortar stores. And many of the jobs Amazon creates are low-wage. Even the company’s treatment of white-collar jobs has come under fire. A 2015 New York Times investigation portrayed a workplace where employees can be reduced to tears because of the pressure and stress to perform. And where workers have been put on so-called performance improvement plans—which employees say is code for “in danger of being fired”—if they took time off to visit dying relatives or deal with serious health issues.
Amazon is one of the richest companies on Earth, and the mind-boggling wealth of Amazon’s executives in comparison to the low pay earned by many Amazon workers epitomizes the economic inequality that is hurting America’s families. And still, Amazon has made it clear that it expects massive subsidies in return for setting up shop in our communities.
We think it’s important that any conversation between New York and Amazon should include unions and community groups, and that our public policy protects workers, consumers and our communities. Our communities deserve better than what Amazon has so far shown it will bring them. And, taxpayers shouldn’t be asked to foot the bill for massive bribes to bring Amazon to town. Amazon doesn’t need it. And given its reported treatment of employees, Amazon doesn’t deserve it.