I had thought that it was part of a Congressperson's job to try to obtain investment in their communities, but apparently that's wrong.
“Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world."
Yeah, you sure showed him.
It might well be a win for Long Island City, and even for the carpetbaggers in upstate New York and outside the State who demanded the deal go through. That some Progressive-Democrats also didn't like Amazon's move is irrelevant.
ReplyDeleteThe locals objected, and that ought to count for something. Their objections weren't all idiotic, either. An influx of 25,000 jobs with an average salary of $150,000 into a community whose median wage is $50k and average wage $75k (which spread suggests a few high rollers skewing the average)--with most of those new job holders imported by Amazon and by the draw of the salary. Most of the locals don't have the education and training Amazon was looking for. All of that's got to worry the mom-and-pop businesses and the residents about price rises for such trivia as food, housing costs, heating and car fuel.
An influx of 25k will have a negative effect on the locals' already stuffed and deteriorating transportation, communication infrastructures.
That influx also will negatively impact housing costs and prices--from the locals' perspective, who won't be able to afford those houses or to remodel what they have--in a city that's already mostly built out, so the only way is up. Expensively.
Property tax abatements for Amazon that aren't available to the locals.
Renewable energy credits available to Amazon that aren't available to the locals.
New York actually wins too: the goodies the State handed over to Amazon to buy them into New York typically don't get recouped in whatever jurisdiction that sort of bribe is made:
tax credits equal to $48,000 per new job—assuming new jobs by Amazon could be measured
$1.5 billion in direct subsidies for Amazon
Potential additional costs include
$897 million through New York City’s Relocation and Employment Assistance Program (that new job holder importation--and perhaps a source of data for assessing "new jobs"
$386 million through a partial property tax abatement program
The locals weren't far wrong to reject this Amazonian "benefit."
Amazon also says they'll not renew their search for a second location for HQ2 (which they don't really need to, anyway; they still have their still-current city short list); they'll spread the jobs around other locations, mostly plusing up their Arlington HQ2 and their new center in Nashville.
Eric Hines
@ E Hines - excellent points. I was remaining focused on the bad reasoning of AOC, who seems to feel that kicking rich guys in the balls is the point, not the actual improvement in the lives of the less well-off.
ReplyDeleteBut there are tradeoffs, and Amazon coming to town may be more of a net negative, even if her reasoning to get there is flawed.
I doubt if it would have been a net negative for the local community. Many of those mom-and-pop businesses...restaurants and dry cleaners, for example...were probably looking forward to an influx of customers. And whatever the tax abatements for Amazon as a corporation, the 25,000 employees would have been paying a lot of personal taxes.
ReplyDeleteThat said, however, I think these state & local incentive programs to lure companies to town are a bad idea. For one thing, they always go to companies that are (a) already very large, (b) in a technology area that the politicians think is currently cool, and/or (c) are politically well-connected.
No locality was offering special incentives to Amazon when they were first getting stated, circa 1995.
IMO, there is an equal-protection argument here. How can it be justified to give Amazon special treatment which giving no such treatment to other, smaller companies that compete with them directly? If there hasn't been litigation on this topic, maybe there should be.
Many of those mom-and-pop businesses...restaurants and dry cleaners, for example...were probably looking forward to an influx of customers.
ReplyDeleteIf they could have kept up with the changes in cuisine--and the higher costs of supplying them with attendant higher prices they'd need to charge--and kept their original customer base. Keep in mind, too, that influx of 25,000 newcomers, against a beginning Long Island City population of 68,000, likely would have greatly altered the look and feel and local culture, if they assimilated at all, to the dismay of those residents. Queens, into which LIC is incorporated, along with LIC community leaders and residents, didn't see it as a net plus.
Pluses and minuses of this sort of thing aren't limited to fiscal matters.
Here's another look at the fiasco; apparently Amazon didn't bother to talk to the locals at all. https://www.foxbusiness.com/retail/amazons-amateurish-nyc-debacle-why-everything-fell-apart
Eric Hines
Development is always a tradeoff, although NYC is as developed as anywhere. If they can't handle an opportunity like this, I don't know what that says about them.
ReplyDeleteMaybe Nashville will like all that money better.
David Foster's point about equal protection is a good one, though.
I am enjoying watching all the people on Twitter who think that, now that they won't be providing Amazon with ~$3B in tax abatement, they can spend that money somewhere else.
This ties in well in well with Tex's comments about an "economic development council" in her county. The agents swinging the deal may or may not well represent the interests of the principals in the community.
ReplyDeleteThe poll cited here suggests that the community was actually strongly in favor, especially minority members of the community. (56% in favor overall, 70% African Americans, 81% Latinos.)
ReplyDelete