Amazon announced two locations for its new headquarters, in New York and Virginia. But, citizens are skeptical about the perks offered to bring them there.
For what seems like an incredibly long time, a number of major American cities vied to be the home of the new Amazon HQ2. Cities sent them sealed proposals, all lining up like old-school British debutantes when they were presented to the king. The new headquarters will bring in tens of thousands of jobs, possibly more. Amazon, a company worth $1 trillion and whose CEO Jeff Bezos is the richest man in history, promises to invest in its new home. This week the company announced that HQ2 would be split between Long Island, New York and Crystal City, Virginia, very near Washington D.C. Naturally, the mayors and other relevant elected officials praised the company for the choice. However, not everyone is satisfied.
Behind the Perks of the Deal
The details of the perks offered to Amazon have been made public. In New York, the company will get subsides of about $1.525 billion, according to The Wall Street Journal. That means that for every job they create, they will get about $50,000 from the government. They will also “win” $325 million from the Empire State Development program, as well as some subsidies funded by New York City taxpayers. Amazon also has full control over the land, a rare deal for the Big Apple.
In Virginia, they will receive a grant of $550 million, with the potential for more depending on how many jobs they create. They will also get $23 million for “infrastructure improvements.” If this seems light, the proximity to D.C. suggests Amazon is in line to provide cloud services to the Department of Defense. This is a $10 billion government contract.
The Billion-Dollar Backlash Hits Amazon
Throughout the process of selecting locations for HQ2, local activists and some elected officials expressed concerns. In perhaps a way to reduce some of the eventual backlash, Amazon announced an initiative to pay all workers $15-per-hour. Still, that wasn’t enough.
Local politicians in New York, such as state Senator Michael Gianaris and city council member Jimmy Van Bramer, issued harsh statements condemning the cost to taxpayers. Congresswoman-Elect Alexandria Ocasio-Cortez of New York also condemned the deal because it didn’t address issues like how HQ2 will affect rent prices in the area. Stunningly, The Wall Street Journal editorial page agreed with her, detailing how much taxpayer money is being funneled towards Amazon.
Anything that has a self-proclaimed Democratic-Socialist in agreement with the editorial board of The Wall Street Journal should get a second look. An editorial in The Rolling Stone argues that these deals and the potential government contract with the DoD threatens to make the U.S. a literal oligarchy. Others worry about the effect HQ2 will have on the cities overall, looking to Seattle as a model.
Arguably the only reason that HQ2 is even happening is because Seattle started to tax Amazon for the homeless problem in the city. As Amazon’s worth grew, so did the homeless population who increasingly can’t afford rent in the area. In GQ, Drew Margery argues that Amazon has cost more jobs than it could ever create, after the small businesses, publishers, and others who lost their battles with the retail giant.
Is HQ2 Dead-on-Arrival?
While the ink may be dry on the paperwork, HQ2 is not a done deal. Local officials in New York are working to perhaps prevent HQ2 from even being built. Protesters descended on the Long Island site to express their dismay at the proposal. If HQ2 ends up being blocked anywhere, it will be New York. The other possibility is that Bezos and Amazon brass have to address these communities. The real question is if they will actually listen to their concerns or offer them bread and circuses.
The Crystal City location is on much more solid footing, if only because Amazon has much more to lose. Congress said that only one private company meets the security standards for the cloud contract. They didn’t name it, but all the smart bets are that it’s Amazon. Similarly, the subsidies they offer aren’t nearly as costly to the taxpayers as the one in New York. Also of the locations that have a white-collar labor pool to draw from, Arlington will likely see more locals employed. No matter what happens, the road to HQ2 will be paved with a lot of roadblocks for Amazon to overcome.
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