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Amazon's electricity rate discounts have pushed up utility costs (bloomberg.com)
247 points by petethomas on Aug 20, 2018 | hide | past | web | favorite | 185 comments



I feel like this is nothing new. Every few years, some major sportsball team threatens to leave their city unless the taxpayers fork over mega-billions for a new stadium. Despite any measurable economic benefits to having a stadium, the cities fall for it every time. It's the same thing, right? Amazon says "give us free electricity and we'll make jobs", and the politicians buy it even though it's very unlikely to be true.

Maybe someday we'll get an itemized tax bill, so you can see that you paid $4.12 for Amazon's electricity and $1.23 for a new sports arena, and can vote for someone else if that upsets you. Now that I think about it, that will never happen. And so, the cycle continues.


It's pretty easy to pull off.

Step 1: Make a threat about jobs/money to get lawmakers to pay attention.

Step 2: Get favorable legislation passed. Hold hands with lawmakers in photo-op for the papers.

Step 3: Stall on delivering on promises until lawmakers leave office or come up with excuses.

Step 4: Profit.


Step 0: Donate to both parties to gain favor with the implicit threat it will be removed if favorable legislation is not passed.


They don't do that usually. They just donate to incumbents.


To be fair they don't pay for it every time... The chargers are now in LA, not SD


Sonics now in Oklahoma.


tbf, anyone saying "sportsball" isn't even going to know who the chargers are


I have heard term "sportsball" before. It seems that it is used mostly in context of making fun of people's addiction to their favorite teams.


Bah. They're not even using the term to display any lack of knowledge, because there are multiple sports involved.


Right, but then that just makes their argument that much weaker.


> and the politicians buy it even though it's very unlikely to be true.

For who are this measures passed? Interesting explanation:

https://www.youtube.com/watch?v=rStL7niR7gs


LA is not providing any money for the Rams/Chargers stadium, nor did it pay for any part of the LA Football stadium. We told the teams they could build a stadium if they wanted the second-largest media market in the US to call home, or they could shove it. They did the math and now LA has 2 football teams and 2 futbol teams.


While their is less public subsidy for the Rams/Chargers stadium than many other stadiums, it doesn’t look like it is zero:

>..."There will be no public dollars, no taxpayer dollars used for this project," he said. "The entire project has been privately capitalized and is being privately funded." The nuance between that statement — similar claims were made by Inglewood Mayor James Butts — and tax breaks that could reach $100 million lies in the fine print of a 185-page initiative plan filed by the developers earlier this month. It includes two paragraphs of how Inglewood would eventually reimburse the project for the costs of roadwork, utility work and public parks on the nearly 300-acre site. Meany estimated those costs at $60 million. The city would also reimburse costs of security, medical services and shuttles to off-site parking during stadium events, which Butts estimated at about $8 million a year.

http://www.latimes.com/sports/la-sp-stadium-tax-break-201501...


Around the stadium is a large mixed-use development (housing, restaurants, offices, hotel, etc.). When talking about the project, the larger development is often conflated with the stadium for ease-of-reference but the two are very separate projects. The mixed-use development has received significant tax breaks, and associated projects (such as rebuilding parks, etc.) are being paid for by the developers. Those costs would be reimbursed by Inglewood over time in the form of tax breaks, if tax revenues actually exceed a specified threshold each year...so potentially not at all.

Also, being pedantic, Inglewood is its own city.


LA (along with NY and maybe Chicago) is the exception that proves the rule.

Most cities that tell teams to shove it just end up losing their teams to other markets: In this case, San Diego and St. Louis.


But are they worse off for "losing" those teams?


Definitely a valid question! I think it's hard to define what "worse off" means here, mostly because it's hard to put a number on the value of entertainment to people (other than the obvious ones: ticket prices, etc.).

I get what you're saying, though - cities often give up a lot (and probably too much) to keep franchises happy.

I'm mostly just pointing out the major power disparity between LA and other cities: Major sports teams want to be in LA far more than LA wants a major sports team. That's not true of, say, Seattle or St. Louis or San Diego.


NY already did the losing their teams to other markets thing, they just did it 60 years ago.


> Despite any measurable economic benefits to having a stadium, the cities fall for it every time

Yes, just like they "fall for" municipal operas, art museums, Shakespeare in the Park, and any number of other cultural amenities that don't have obvious and immediate economic impact.

Perhaps your complaint is less about public investment in cultural benefits than it is an issue with one particular kind of culture?


Those things don't receive anywhere near the amount of funding that stadiums and arenas do.


Based on what? Just grabbing the numbers for one institution I happen to be familiar with, the St. Louis Metropolitan Zoological Park and Museum District:

> During its history, the zoo-museum district - officially known as the Metropolitan Zoological Park and Museum District - has raised about $1.3 billion, stabilized five once-struggling institutions and helped some of them develop international reputations.

Source: https://www.stltoday.com/news/local/metro/zoo-museum-tax-dis...

So that's $1.3. billion in tax dollars raised specifically to fund the museums and zoo in the largest park of one mid-sized U.S. city.

That tax raises 35 times the $5 million per year the city pays on the bond for the old Rams stadium, which generates a lot of articles like this one:

https://www.huffingtonpost.com/entry/rams-los-angeles-st-lou...

Of course, HuffPo doesn't write any articles about the zoo tax, because literal rams in cages is a more noble use of money than figurative Rams throwing a football, one presumes.

The number here also dwarfs the direct public subsidy for Busch Stadium, also in St. Louis, which also got a ton of ink and public scrutiny.

More info on that subsidy here:

https://www.thefreelibrary.com/What+the+public+paid+for+the+...


"So that's $1.3. billion in tax dollars raised specifically to fund the museums and zoo in the largest park of one mid-sized U.S. city."

That's divided amongst 5 public organizations. Not all going to one billionaire.

"That tax raises 35 times the $5 million per year the city pays on the bond for the old Rams stadium"

Stadium for one purpose, for a team owned by a billionaire, who also left town.

The cost to the city was also far more than just $5 million a year; the total amount the city put behind the stadium was $280 million.

"Of course, HuffPo doesn't write any articles about the zoo tax, because literal rams in cages is a more noble use of money than figurative Rams throwing a football, one presumes."

Or maybe it's because NFL teams, with the exception of the Green Bay Packers, are owned by billionaires who could easily afford to build their own stadium.

And I've never seen a zoo threaten to leave town unless the city agreed to pay for a new elephant habitat.


> Stadium for one purpose

how many of them now are actually one purpose? Local example is AT&T Stadium (also known as "Jerry World") which in addition to the occasional Dallas Cowboys win also hosts a lot of UIL sporting events, high school football playoffs, motocross, monster trucks, rodeo events, and a bunch of concerts.

Nearby Globe Life ballpark has... well, baseball.

> And I've never seen a zoo threaten to leave town unless the city agreed to pay for a new elephant habitat.

Never seen one threaten to leave, but I've seen them threaten to close down exhibits.


This is moving the goalposts, to choose an apt metaphor. The point is twofold:

1) We spend money on other types of cultural amenities all the time and nobody cares; and...

2) That spending is of an amount that lodges it appropriately within this conversation.


Paying taxes to sponsor nonprofits that don't charge for admission is a bit different from paying taxes to sponsor private enterprises that charge hundreds of dollars for tickets and pay multi-million dollar salaries.


Yes, there are differences. For example, another difference is that the people in museums don't wear jerseys, but athletes do. The question isn't whether there are differences; it's whether those differences matter. I don't think they matter. More specifically, I don't think they're relevant to the objections here, which are largely cultural in nature.

In fact, what the high salaries in sports reveal to me is that the public wants sports a lot more than they want museums.


No, I don't believe it's moving any goalposts. The fact of the matter is, the stadiums are for teams owned by billionaires who could easily build their own stadium, and they get far more in subsidies than the other things you mentioned. $1.3 billion was raised in your article, but it was split between several different things.


I think the numbers I posted speak for themselves. You looked at the same numbers and drew a wildly different conclusion (for reasons I think I know).

So I guess that means we're at an impasse.


They did. But you ignored the fact that your original number was the amount raised for several different organizations over a longer period of time. You chose not to mention that, for reasons I think I know.


You're inordinately focused on the fact that the zoo-museum district includes "several different organizations." You seem to think this is a crucially-important fact, one I'm trying to conceal, for some reason, but neither of those beliefs are true.

> You chose not to mention that, for reasons I think I know.

You should re-read my original comment, the one that started this truly silly subthread, which twice reveals that there are multiple organizations included in the district.


Interesting that the regulations they're running up against were built to constrain the railroads, since this looks almost identical to the railroad rebates that Standard Oil and other gilded age trusts used to pump up their monopolies at the expense of smaller competitors and regular people. Basically, if you're a big enough customer, you can play service providers (railroads, power companies, municipal governments, etc.) against each other to get absurdly below-market rates and stick the bill to someone with less bargaining power. The railroad regulations were passed after a series of exposés of Standard Oil and other monopolists that took advantage of secret rebates.

More on Standard Oil, rebates, and the breakup of the trust: https://repository.law.umich.edu/cgi/viewcontent.cgi?referer...

I also recommend Titan, the well-researched John D. Rockefeller, Sr. biography by Ron Chernow.


I am listening to Titan at the moment great book


I'm not suprised. This is what they do. When you think about it a lot of Amazon's business is partially subsidized by the tax payer. They pay less for the roads the drive on, they get huge tax breaks to open new wearhouses and headquarters and their workers' low wages are subsidized by welfare. The great deal you get and their ability to kill their competition is partially paid for by your taxes.

http://www.businessinsider.com/amazon-not-paying-taxes-trump...

https://www.politifact.com/truth-o-meter/statements/2018/may...


They kill competition which enables them to exploit their own workers. Meanwhile, we help them by giving them more business.

https://apnews.com/1d62290004b340feac5c359d59b86823


Are you suggesting that by winning in ecommerce and cloud computing they're gaining a monopoloy on jobs? Seems like a stretch.

There have always been and probably always will be unpleasant jobs. I watched 6 guys replace the roof of my neightbor's house yesterday in Houston. It was 100 degrees on the ground so I'd imagine it was intensely unpleasant working 8 hours on the ashphalt shingle roof. Does that make the roofing business exploitive? Should we all abandon our roofs?


  When I worked at Amazon we had to run around the warehouse, bc
  if our pick rate fell below a certain number we stopped getting
  paid.  There were bottles & bins full of piss at odd points, bc
  you were penalised for toilet breaks.  A co-worker attempted
  suicide on-site bc of the stress
Source: https://twitter.com/OwennnThomas/status/1007957414577090560

If this isn't exploitation, I'm not sure what it would be.


I'm not saying their workplace is great. I'm just saying it's not directly tied to their success. They run large logistics warehouses. That's just hard physical labor where you're paid based on production. A great big portion of the food you eat is also picked under those conditions.


So why do people work there? There are other jobs I'm sure. Why support this treatment?


This is the easy way out of putting the blame where it actually should be.

It's not easy for a lot of people to find jobs. It's not easy to go weeks without pay while you apply, wait for drug tests to come back, go through initial onboarding, and then wait 2-3 weeks for your first paycheck.

The fault is not with the person being exploited, it's with the exploiters.


Don't question a monopoly that is exploiting. Instead question those being exploited. Slow claps.


You can question Amazon all you want. As long as there are workers choosing their jobs, they are going to continue hiring people.

It's like the meat packing industry... People die there in big numbers, but it just continues.


There is a well known history of organized labor ("workers") improving working conditions via labor law.


The meat packing industry has a rather interesting history around organized labor - and for a period of time - that organization improving pay and conditions. see: http://www.pbs.org/now/shows/250/meat-packing.html


This is a forum. Maybe things aren't always straightforward. It doesn't hurt to ask questions, it does hurt to silence them.


No, it does hurt to blame the victims.


To state "It's off limits to ask the people involved why they continue to put themselves in such a horrible situation" is unscientific. Nobody is blaming anyone by asking a question.


"Nobody is blaming anyone by asking a question."

That's not true. Many times people use the "asking questions" as a ruse to do just that, and erode support for these people by saying it's their own fault for being exploited.

And, quite frankly, I don't care one iota why they stay; there is exactly zero legitimate reason for them to be treated like that. Bezos should be so ashamed of himself that he would be unwilling to show his face in public.


Is it not reasonable to do both? Like, amazon is exploitative, sure, but if its so bad that the employee is gonna kill themselves... maybe take a step back and re-evaluate if the job is worth your life?


> Why do people work there ?

That’s a great question and I’m sure the answer would be interesting. Assuming most people working there to be unreasonable or illogical would be unfair to then.

> There are other jobs I’m sure

Or is there ? What’s the criteria for “other job” ? How do they look for it, when, on what terms ?

If that many people are just stuck there, I think it’s just not a “I just quit and go work for some other 9 to 5 job tomorrow” situation.


getting a job isn't easy for everyone


Still, there are more choices than Amazon. I think it's just easier to blame Amazon than for people to make different choices.


> Still, there are more choices than Amazon.

There is always a cost associated with trying to change a job, one that may be difficult for a poor person to pay. You need to do research to find these other job choices (and you really may not have many choices depending on where you live), apply to multiple places, show up for interviews, etc. Doing all these activities takes time and energy, which a person, who is possibly already struggling to make ends meet, may not have. Imagine coming home from your grueling warehouse job where you had to pee in bottles, putting together a dinner for yourself and your kids, doing some basic chores around the house so that your place doesn't turn into a shithole, and then finding the energy to do all the things you need to do for finding a job.

It's easy to pontificate while sitting in our cushy tech job chairs, where if we don't like the current job, there'll be 10 recruiters blowing up your email with job opportunities, about what a person who may be less fortunate should do.

> I think it's just easier to blame Amazon than for people to make different choices. It is possible that some blame lies with both parties, but Amazon definitely shares a clear (and rather heavier) burden of blame here, and there is nothing wrong in calling that out.


I can only speculate that the other choices probably pay less or involve other trade-offs that make them less appealing up-front. It's not as if anyone enters an Amazon warehouse job expecting to work long hours without bathroom breaks. Or at least, people enter while thinking "that won't be me." And when terrible working conditions do crop up, it's like boiling a frog- if you've already been at the job for a while, the effort it takes to switch is change is far more difficult.


No, it's easy to blame Amazon because they're treating their workers like shit.


[flagged]


Personal attacks will get you banned here. Please don't post uncivilly again, regardless of how you feel about a big corporation.

https://news.ycombinator.com/newsguidelines.html


I'm from sweden, we don't have Amazon here and also our laws would not allow them to treat people badly. :)


This. America has a lot of humane integrity over time. We are no longer a nation for the people by the people.

Countries like Sweden, Norway, Switzerland get it. You don’t plow over your citizens in the name of capitalism.

But then, America has always been like that. A harsh truth of the human condition. A nation of people who have it because they were born to the right parents, and some who will toil their entire lives in questionable conditions because they got delt a bad card.


Well, then wish Swedish-style social democracy for us all, but maybe where the Marxists get to win out in the 70s.


Certainly the lack of jobs is partially due to all the businesses that Amazon puts out of business by leveraging all of their AWS money to out compete companies in unrelated markets?


Because there aren't any jobs.

And quite frankly, I honestly do not care if there are other jobs or not. That kind of treatment is completely unacceptable, and there is zero legitimate reason for Amazon to treat them that way.


Because our country has a number of a systemic issues right now that are all contributing to this situation. Let's step back and take a broader view at some of them.

1. College is expensive. Outside of the trades and a few other exceptions, a college degree used to be the best way for young people or unskilled laborers to get into higher-paying, more stable jobs. That math doesn't work out so well anymore, and there are continuing efforts to further increase the individual cost of a college degree. The percentage of college graduates in the U.S. has risen only a few points since the late 70s: https://en.wikipedia.org/wiki/Educational_attainment_in_the_...

2. Lack of affordable health care is preventing a lot of people from opting out of the job market. If you have any kind of illness that requires regular treatment, or even if you're worried about getting bankrupted by an injury, then you're forced to look for employers offering company health insurance, even if the pay is crap. Amazon offers health insurance for their full-time employees: http://www.amazondelivers.jobs/about/benefits/. As long as there isn't a sensible, publicly-supported health care system in the US, companies will be able to exploit this to get and retain workers at a net discount.

3. Rising housing costs in many urban areas are further squeezing a lot of people.

4. Upside-down tax structures and other financial incentives (like the ones described in this article) are further moving a lot of money from the poor to the rich. These factors together are creating a de facto peasant class, and massive companies like Amazon are doing their level best to ensure that it stays that way. It is a really good deal for Amazon when they can work this system well enough to get the public to subsidize their employees' food costs (https://yro.slashdot.org/story/18/04/21/1634237/many-amazon-...). Remember when the Silicon Valley big-wigs colluded to create a non-competitive job market for tech employees (http://fortune.com/2015/09/03/koh-anti-poach-order/)? And out of that lawsuit, the tech workers got just $5k on average. That was a fantastic deal for the companies.

So if you're a low-skilled worker, that doesn't leave you a lot of options on the table. You hear Amazon advertising (via some staffing firm) for warehouse positions in your area, it sounds like they'll hire anybody, you've heard the work conditions are bad but you figure it'll be temporary, and hey, health insurance, if you're lucky enough to be considered a full-time employee by the company.

Fix health insurance, and more people would get into the trades. Fix education, and more people would get a degree. Fix housing, and people would be less desperate for crappy work. Fix regulation, and communities would get a lot wealthier.

Unfortunately, none of that appears to be happening anytime soon, because there's a long line of people willing to argue against any of those things for one ideological reason or another, because the situation hasn't gotten quite bad enough, quite fast enough, for them to see anything wrong with it.


Crazy working conditions but the economy is roaring. These folks should be able to find better jobs doing truck driving or a variety of other blue collar work if they try.

https://www.usatoday.com/story/money/2018/04/26/truck-driver...


Not to be cliche, but you need to check your privilege here. Firstly, "these folks" would clearly have a better job if they could get one. You assume they're not trying ... or you assume it's as simple to find a job as it is for someone in our industry.


> There have always been and probably always will be unpleasant jobs.

That "probably" is doing a lot of work there. I'd wager a bunch of us are on this website because we want to make changes in the world. We're not excited about computers because they pay well, we're excited about computers because they let us do cool things. We're not interested in disrupting entrenched industries because we are bored and want to amuse ourselves, we're interested in disrupting entrenched industries because we think we can do better. And when we say better that implies that we have a sense of good and bad and how to incrementally get closer to good.

So what is the world we want to build? We, humanity collectively, control whether there will be unpleasant jobs. No god told us, "Thou shalt build roofs in 100-degree weather or pay the consequences." We control what jobs exist. There are people working on robotics, right? I can imagine a world where nobody works 8 hours in 100-degree weather on an asphalt roof any more. And whether I call that job "exploitative" is pretty irrelevant to whether we're getting closer to that world.

There have always been unpleasant jobs, yes. Whether there will be is up to us.


Average roofer pay is 18.53, average amazon warehouse pay is 13.50. Good roofers in a hot market (currently) can get well over 20.

There seems to be this bubble of thinking on HN that hard labor jobs don't pay well. The reality is they pay more than your average IT Support job. They are in demand because they can't find people willing to do the work. Another example is electricians. Some electrician companies are so desperate for skilled electricians that they are paying their retirees to come out of retirement and still allowing them to keep pension benefits. Another one is plumbing, etc.


Absolutely. This is a sign that the system is working. Amazon doesn't have a monopoloy on jobs that allows it to pay dramatically under market for warehouse workers.

Roofing especially in a hot climate is harder more demanding work than a warehouse job. And it pays considerably more.


Huh?

Roofing pays a premium because it is a crap entry level job that is hard to staff with reliable workers. The labor force is generally limited to younger able bodied men with transportation who are willing to do seasonal work.

Amazon can recruit almost anyone to do picking and can get value even from the people whom they purge.


>Roofing especially in a hot climate is harder more demanding work than a warehouse job.

Have any evidence of this or is it purely anecdotal? Many warehouses aren't air conditioned, especially Amazon ones.

https://www.businessinsider.com/amazon-warehouse-2011-9

> Amazon kept paramedics in the parking lot of the warehouse to treat employees who were fainting, suffering from dehydration, or exhaustion.


Still anecdotal, but I’ve personally done roofing (for a portion of a summer) and worked in a warehouse (for a year and a half including 2 full summers). Roofing was worse, but not by that wide of a margin - just in terms of physical exhaustion, the warehouse work I did was much closer to roofing than to, say, retail or food service.

Then again, while the warehouse I worked in had much less stringent metrics than Amazon’s, there were other factors that may have made it worse overall.


Roofing is incredibly brutal job on your body. Many people that work in amazon warehouses simply wouldn't be able to take it. Plus it often requires driving to job sites, so you aren't guaranteed regular hours like you would at amazon.


Typically contractors and subcontractors are paid by the job, not hour. Yes, it's definitely considered difficult labor, but again, the body adapts and strengthens. I wouldn't suggest working in 100 degree sun, however, that's just crazy.


Amazon workers - look here. More money, exercise, outdoors.

People do have choices.


I think you mean “skilled labor”. Hard labor is what chain gangs do.


I mean hard as in difficult or physically demanding.


Jobs can be unpleasant and still decent.

6 guys, 8 hours? Seems reasonable. The Amazon way would be 4 guys working 16 hours, but I’m rotating shifts so that you don’t have to pay OT, but knowing that the rotation is such that people won’t leave the job site. And when somone goes 1-minute over their 15 minute break they are fired and replaced on the spot.

Amazon treats people as inanimate objects completely devoid of humanity.


This is so true. Amazon had people camping outside in tents in the UK


The new prevailing sentiment is that concentration of corporations - Walmart, Amazon and other large chains - in pretty much every industry is what is keeping the wages depressed. It's mind-boggling even for economists that the unemployment rate is a mere 4% and yet the wages haven't appreciated meaningfully (there's only a marginal increase so far).


It appears that “full employment” means the lowermost slice of employed workers are sloshing around at the bottom of the barrel with a few giant monopsonist-type employers paying economically efficient wages — with enough “price discovery” in that “market” (cycling of subsistence workers with few options as individuals in and out of jobs) to make it balanced from the perspective of any one large employer.


I make $34,000 a year sitting in an air conditioned office talking to people on the phone all day. When I see people doing manual labor, I am truly surprised at the abuse people are willing to take to pay their rent and feed their family


I mean most hard labor and construction type jobs, while they are doing manual labor, they are making way more than you so the trade-off is most definitely worth it.


Totally agree, but physical labor causes permanent damage. I would rather cut my expenses and make less doing easier work, but that's just me. Furthermore, the world needs physical work until robots replace us all!


Sedentary office work also causes permanent damage.


You can control for this through diet and exercise. You can't control herniated disks and nerve damage. Sitting is unhealthy but not as bad as manual labor


Many of them don't have the options that you do.


I'm reasonably certain that union construction workers make more than I do


What do you do?


Customer service for a solar panel company. When somebody wants to receive a quote or more information or schedule an appointment for an estimate to sketch out the details of putting a solar panel system on their house, they get patched through to me.

I love this job a lot more than my old sales jobs which involved needless travel, quotas, pressures, and lots of layoffs!


> Should we all abandon our roofs?

What are you talking about? You've moved the conversation away from a specific discussion of Amazon's practices to an anicdote.

Unpleasant does not equal exploitative. Amazon is unpleasant and exploitative.


You've been using HN primarily for ideological battle. The site guidelines ask you not to do that (https://news.ycombinator.com/newsguidelines.html). We actually ban accounts that won't stop using HN this way, because it's destructive of the intellectual curiosity this site exists for. It's fine to comment on a politicized topic, of course. What's not fine is to use HN primarily for political arguments—regardless of which politics you favor. If you'd review the rules and please fix this, we'd appreciate it.

Also, please don't be uncivil in comments here, even when another comment is wrong or annoying. ("What are you talking about?" is the sort of nasty elbow that can and should just be edited out of a post.)


> You've been using HN primarily for ideological battle.

Not really. It's an ongoing discussion sparked by the number of articles that appear on the front page that are deeply related to the economics of the tech industry. It interests me. If genuine comments responding to articles from a particular and consistent point of view are unwanted I can stop.

Everytime I log in something like this is at the top of the front page. Even now this is there: https://news.ycombinator.com/item?id=17804202

I understand your concerns and as it's not my platform fair enough. Will do better.

> If you'd review the rules

Will do

> please don't be uncivil in comments here

Fair and noted.


I appreciate the polite response very much. The issue isn't this discussion or any one discussion, it's the pattern of using HN primarily for political arguments. The test here is that word 'primarily'. This is the only way we've found to draw a line that fairly balances the concerns: that on the one hand many on-topic stories have political aspects, but on the other hand political flamewars will burn everything up if you let them... so we can't let them.

I've posted other explanations of our thinking about this, in case it's of interest: https://hn.algolia.com/?query=by:dang%20primarily%20line&amp....


Amazon, and Walmart before it, is far from alone. Entire industries are subsidized by the tax payer, with larger externalities (e.g., fossil fuels or sugar).


Whatboutism. It does not make it right, nor should we support it.


It's not really whatboutism. The point to be made is this is not an Amazon problem, it's a systemic problem. Amazon seems to be getting more attention in recent years because of their size, but to me that just feels like picking on them because they play the game better than everyone else.


> Amazon seems to be getting more attention in recent years because of their size, but to me that just feels like picking on them because they play the game better than everyone else.

Yes, they're getting picked on because they are the most exploitive (extreme tax avoidance, worker abuse, etc). It seems that would be the first org you would pick on: the one causing the most damage. Why would we pursue or focus on the orgs doing the least amount of damage first?


> Why would we pursue or focus on the orgs doing the least amount of damage first?

That isn't the point though. Like Facebook and privacy issues, the ultimate outcome of this will either be (a) nothing, or (b) government singles out Amazon alone for scrutiny, which does nothing to stop the same systemic problem that happens at many other employers also but goes unreported because the company in question isn't tech-sexy (Wal-Mart, Ford, etc).

The fix needs to be applied universally, without considering how much damage individual orgs are doing.


Yeah because telling amazon to fix their problems will surely result in every other business fixing their problems, right? Give me a break, you need to attack holes in legislation and government.


Yeah, I totally agree. It's why I max out contributions to candidates who support my ideals and donate my time to candidates who ask for help crafting policy (or I actively reach out to candidates when necessary).

But there's only one of me.


Right, maybe we should take a look at fossil fuels, corn, sugar, etc...


No, but you should modulate your outrage to be proportional to the problem. You probably don't get nearly upset about, say, farm subsidies, do you? Go look up how much energy we're talking about here vs. how much is involved in all that useless corn we're turning into "green fuel" (which isn't green, nor particularly efficient, nor even technically "renewable" unless you ignore the fertilization input) at taxpayer expense.

Yet... this is Amazon, and HN hates Amazon.


"Whataboutism" has jumped the shark as an internet criticism. It wasn't much of a shark to begin with, since comparables are relevant. But the word is catchy, so it had a brief power to make people forget that.


Point taken. How would you argue against such an argument? Do others acting poorly, breaking the law, acting immoral obviate the target of attention from discussion? It seems no argument can take place then, because every argument is then shut down with "Someone else does X, therefore what Y does is inconsequential". I am open to a superior ways to argue when there is a question to disparity between comparables.

Appreciate any feedback you provide!


> It seems no argument can take place then, because every argument is then shut down with "Someone else does X, therefore what Y does is inconsequential".

That's not close to what the person you replied to said though. They simply said that Amazon is not alone in doing this. That it's a much larger problem.

> How would you argue against such an argument?

I wouldn't. I would see anyone saying: "Someone else does X" as providing additional evidence this an even bigger problem. So Amazon isn't the only one doing this? Walmart is also doing this, as well as other companies. What can we do to stop this all-together? Because focusing on Amazon won't solve the problem. In fact, in some ways it becomes easier when there are many "someone elses" doing X, because then it comes a general problem, and not a specific attack on any one company someone might have an attachment to for some reason.


The underlying problem is home rule though.

Local jurisdictions can and do give steep tax (and other) discounts to attract businesses and stadiums (just two examples). You would have to revoke local governing authority to prevent these sorts of venue shopping (IANAL; if you have better suggestions, I’m all ears). I don’t believe that is realistic, so I don’t argue that as a legitimate solution.

Maybe you could tax at a federal level where you can overrule local taxing policy (similar to new SALT deduction constraints in federal tax policy), negating the benefits of venue shopping.


Also the proliferation of the internet has been heavily tax subsidized to give access to the masses. Even more benefit is gained from being based in states without sales tax. Something brick and mortar stores can’t do to compete.


Not just tax dollars but investment dollars as well. Amazon is the big winner for almost every web based startup, whether they succeed or fail, because Amazon still gets paid.

It’s pretty hard to have a business of any size and not touch Amazon in anyway. Amazon, in many ways, has becoming embedded the as GE once was.


> They don't pay for the roads

They do pay taxes...



Presumably gas taxes, which in most states go towards funding road maintenance


"user fees" like gas taxes pay for less than half the cost of road maintenance. If you use the roads and the only taxes you're paying are gas taxes, you aren't paying your fair share.

https://www.citylab.com/transportation/2015/05/debunking-the...


Amazon pays for it's 3rd party (1099) workers gas? That's news to me... Amazon does not own any semi trucks.

'To be clear, Amazon purchased only the trailers and will use third-party companies for the actual truck cabs and drivers. The original source report did not make clear there was a distinction.'

https://www.technobuffalo.com/2015/12/04/amazon-prime-now-ha...


They do, that's part of the pay.

You could make a (good) argument that they are underpaying their contract drivers, but nontheless -- everytime they pay a contract driver to drop a package off at your house, Amazon is paying for that gas in their pay to the delivery driver.

The same is true when they use a commercial delivery service at all -- the cost of fuel tax is bundled into the delivery price.

Whether Amazon owns any trucks of their own is immaterial, if they are contracting with Amazom, Amazon is ultimately paying for the fuel (including taxes).


I think the point was that Amazon pays salaries/wages, the recipients buy gas for their personal vehicles, and that gas is taxed to pay for the roads.

Presumably Amazon funds paid to delivery services are also used to pay for gas, which therefore indirectly pays for the roads.


A significant percentage of road infrastructure is paid for by general taxes which Amazon avoids paying.

https://frontiergroup.org/reports/fg/who-pays-roads

They pay less for the roads than you or I. You are subsidizing Amazon's business with your taxes.


Amazon paid $361 million in income taxes in the last two quarters. They're now a profitable corporation and will pay taxes as every other profitable corporation does. And given the rate of increase in that profitability, they're going to start paying billions in taxes annually.


state taxes?


Amazon doesn't even collect the correct amount of sales tax. So yet again it is ripping off the states in which is does business.

"According to an analysis from the ITEP, the gap between the tax rate that some local tax jurisdictions impose and what Amazon collects can be as much as 7.5 percentage points in Homer, AK., for example."

http://fortune.com/2018/03/29/amazon-tax-rate-president-dona...


Alaska doesn't have a state sales tax, so presumably that's all city or county taxes. Does Amazon have the same obligation to collect those that they do for state taxes?


Is Amazon breaking a law?


Laws aren't morals


Do you pay more taxes than you legally have to because you have better morals?


As much as any citizen or much less ?


I think one of few good outcomes of monopolistic tech companies, like Amazon, is the degree to which they expose the lie that is American free market Capitalist ideology. There’s never been anything other than highly-subsidized State Capitalism and it’s outcome is massive, private command economies in the form of corporate dictatorships. These dictatorships then seek to assume the power of the state so as to achieve a monopoly on subsidization, while at the same starving the ability of the state to subsidize others and provide a challenge to their control.


It’s incredible to me how many comments here citing this sort of thing as common practice are made with the implication that we should be less upset because it’s just how business works, rather than more upset because these injustices are so widespread.


I think most of these state sponsored companies are unintentionally so, at least in the beginning. Amazon was built on state taxes not being applicable to internet purchases in the beginning, which was an unintended subsidy.


Maybe this backlash will lead to a class consciousness forming in the startup community, at least in a weird Frankenstein left-libertarian-ish message of "the big guys are too big, they're harming free market competition"? While Silicon Valley skews 'socially liberal, fiscally conservative', that doesn't mean they are on the side of the monopolies by default.


[flagged]


Nationalistic flamebait will get you banned here, same as the religious flamebait I just warned you about elsewhere. If you need to post like this on the internet, please do it somewhere where they don't mind if you set the place on fire.

https://news.ycombinator.com/newsguidelines.html


Amazon also gave many of us good paying jobs and opportunities to grow and get even better paying jobs.


Which is completely and utterly irrelevant.


Deceptive [original] headline ["Amazon Isn’t Paying Its Electric Bills. You Might Be "]: Amazon is surely paying all the bills it negotiated.

Economically-questionable conclusions: although individual secretive utilities might on occasion make dumb deals, they'll charge households whatever the market & regulators will allow, and then charge Amazon whatever the market & regulators allow.

And utilities would like Amazon as a customer because of the efficiencies of scale it'd provide. They'd not want Amazon at-a-loss, that then requires making other customers to pay more – and if utilities already had the market-power or case-to-regulators to charge others more, they'd already be doing it.


  Economically-questionable conclusions: although individual secretive utilities might on occasion make dumb deals,
  they'll charge households whatever the market & regulators will allow, 
  and then charge Amazon whatever the market & regulators allow.
Because most utilities are monopolies that are allowed by regulators I'm not sure that the market's invisible hand has that much of an impact is this particular situation. The consumers who need electricity for their homes don't have much choice here.

Edit: formatting


most utilities are monopolies

That's interesting. In Norway and UK, etc., You can buy your electricity from any operator you like. The only monopoly is the power cable. So I get two bills, one for energy and the other for the transport of it.


> The only monopoly is the power cable.

That there, is enough, though. It's not as if you could choose not to pay for that portion and pay only for the energy.

As such, the rate could go up without bound. (Well, bounded by competition from off-grid systems that are 2-6x as expensive in the long run and have a huge up-front cost).


OK, we've replaced the title with the article's subtitle, which is more specific.


The subhead is less sensationally figurative, but still has factual problems: this "one customer's discounts necessarily push rates up for others" is not strongly supported by the article, or by economic reasoning. (Often scale can drive everyone's rates down: that's the whole mechanism of utility monopolies!) And it's certainly not supported in the inflammatory "everyone else" formulation.

And even in the particular leading anecdote of the article, it's not so much Amazon's rates that have caused a regulator to approve a new assessment on other customers - it's neighbors' demands for more-expensive underground transmission lines. Even if Amazon received no discounts, the lines would still be needed, and the regulator would allow this sort of capital outlay to be passed-through to ratepayers.


If you or anyone can suggest a better title—i.e. one which is accurate, neutral, and uses representative language from the article—we'll happily change it again.


Brace yourself for an updated version of this post:

"Jeff Bezos Becomes the Richest Man in Modern History, Topping $150B"

https://www.bloomberg.com/news/articles/2018-07-16/happy-pri...


It's interesting how this sort of means that the cost of Amazon is in a way socialized (including all the tax breaks for building a new office somewhere), while it's impossible to socialize healthcare in the US.


The cost is socialized but the gains are not.


I can't say that I fully agree with that. The Amazon store and AWS have made a lot of stuff possible that otherwise might not have been possible. AWS for example gives out free services to startups, some of which might have major impact on many lives.

Sure, I'm playing the devil's advocate here, but in the end it's also really hard to define what is 'good spending' on tax dollars. For all we know, Amazon venturing into health care will end up being a great substitute for socialized health care. It could become Bezos' ultimate philanthropy. It could also be what gives him super villain-like power over the US.


>Sure, I'm playing the devil's advocate here, but in the end it's also really hard to define what is 'good spending' on tax dollars.

Most social services in developed European countries that allow people to be better off and not squeezed and abused by companies like Amazon? Healthcare, transportation, public housing, higher education? Literally almost anything besides what is spent on the USA’s unwinnable, forever wars?

It’s not hard as soon as you set aside American Exceptionalism as having any legitimacy.


What about America as a culture, economy or military is unexceptional. People all over the world wear blue jeans, trade on the NYSE, have iPhones and Androids and are protected by the United States. I don't think American Exceptionalism is not legitimate. Some countries may have more welfare but I don't think anyone in America is trying to claim otherwise


>Some countries may have more welfare but I don't think anyone in America is trying to claim otherwise

Actually, this is the party line of the right-wing in the US. It's not more, it's less, because...freedom?

https://www.independent.co.uk/news/world/americas/us-politic...


You're joking, right? Something like 65% of healthcare outlays are socialized in the US.


Those are rookie numbers, kid.


When Bezos said "Your margin is my opportunity." he was talking to consumers and not completion. Amazon is killing off small business and forcing tax payers to take up the brunt of Amazons expansion.


What are examples of the small businesses that survived Walmart/Target but are now being killed by Amazon? Small hosting providers maybe.


Specialty brick and mortar. No need to drive to a store specializing in your quirky hobby when you can get any supplies you need in 2 days off Amazon. Not exactly a bad thing, but those stores tend to serve as knowledge centers/gathering spots for the hobby. So some groups make it a point to shop brick and mortar, the whole FLGS (friendly local game store) in the tabletop community thing comes to mind.


From what I see people tend to shop brick and mortar for things that they enjoy shopping for, and at places where the shopping experience is enjoyable. Going to the friendly local game store is an experience. The local store in my neighborhood hosts gaming nights, and scavenger hunts, and all sorts of nice things. These types of brick and mortar stores are still successful.

But buying toilet paper, towels, and other random supplies is not a fun or enjoyable experience. There is nothing fun about going to a big box store, walking down crowded aisles, loading up a rickety, squeaky cart, and pushing it to a checkout lane with a long line. No one likes going to the store to shop for boring stuff so Amazon delivery is a clear winner there.

But brick and mortar isn't going anywhere. It will always continue to be successful for sales that are actually fun and enjoyable things to buy.


I'm empathetic to those impacted by preferential and redacted rate negotiations, but not to my fellow Virginian complaining about rate hikes.

The community wanted it buried at a higher cost? Well, Dominion has a right as a regulated utility to negotiate rates for the following year to match infrastructure and other costs. This is so they can recoup / respond to storms and other issues. It's a part of utilities regulation.

Now, if they get a sweetheart deal on top that's certainly a different story, but the infrastructure cost passed on to the consumer thing has been part of the deal for a long time. It would likely only be higher for that following year, and then rates would return higher but closer to normal as the buried pipe went into O&M mode.


I know I am supposed to feel sorry for this person in the article, and this doesn't justify anything Amazon is doing, but,

> She was already struggling to pay her monthly $170

Her bill is 2x mine in the winter, and 5x it in the summer, and I pay 2x per kWh¹ more than she does. Am I unusual, or is this an absurdly high electric bill?

¹https://www.electricitylocal.com/states/georgia/gainesville/ ; Gainesville electric rates appear to be 11.6¢/kWh; I'm paying over 20¢/kWh


> Am I unusual, or is this an absurdly high electric bill?

You're unusual.

Or, rather, her bill is high, though not absurdly so, especially if it includes more than just the per-kWh charge (e.g. a fixed/per-meter charge or even additional utilities like water) and if it's her only household energy source (i.e. no natural gas, propane, or heating oil).

Virginia gets warm and humid in the summer and cold (enough) in the winter. Using resistive heating can really jack up an electric bill. The absurdity of that form of heating is at least debatable.

$34 in the summer mean 170kWh, which is remarkably low. It implies no AC, no or very light use of appliances like a dishwasher, clothes washer, or dryer, and either little use of hot water (or "cheating" with a gas-fired water heater).

A single 100W light bulb (remember incandescent bulbs?) left on 24x7 would use 73kWh in a month.


That links to the wrong Gainesville. Your looking for Gainesville, Virginia. The closest city to Gainesville is Haymarket, VA: https://www.electricitylocal.com/states/virginia/haymarket/


And that page says the average for Virginia is... 11.64c/kWh. I'd say the OC's mistake ends up being incidental.


Took something as big as Amazon to topple Walmart. It’s going to take something even bigger to topple Amazon in the future. That should scare people. Scale begets scale.


Walmart isn't exactly on the ropes. Also the customer bases are fairly different.


I have always felt that these sorts of issues were behind the simple elegance of Google (another prodigious power user) creating a wholly owned subsidiary that was a registered power company. Sure it started as an argument between a local power company's onerous demands, but as a result Google just pays the inter-power company transfer rate, and the agreements are all private between power companies and not between a company and a "retail" user.


But, this is not just Amazon specific. Even when discussing on renewable energies (e.g solar), this is the same argument that most conservative lawmakers and utilities make about applying a tax on residential solar. You have users of the grid that are not paying the same as others, but it's still utilizing the same grid as everyone else, therefore increasing the cost for everyone else that are not discounted, etc.


To save you the time, it's talking about how Amazon negotiates cheaper rates with electric companies, effectively passing off utility costs to the general userbase.

It starts with a story about how Amazon wanted to get power lines through a data center, and the community forced it to expensively route around a historic site, and the user base ended up getting a rate hike to pay for it (despite most of them not needing that part of the grid).


It's only effectively passing costs off to other consumers if Amazon is paying less than the total cost in the first place. If they're paying something heavily discounted but still profitable for the electric company, nothing is being passed on to others.


True, but their story at the beginning, despite not following the general pattern, would count as passing off costs, because everyone had to pay a rate hike that was only necessary for one user.


>Late last year, Amazon dangled 12 more in exchange for reduced electricity rates, and AEP exempted it from surcharges other Ohioans must pay. “That’s de facto cost-­shifting,” says Ned Hill, an economist who teaches economic development policy at Ohio State University.

Sounds cut and dry for the Ohio anecdote as well.


If people want to play this game, then I don’t want to pay for rural and suburban electricity lines. They have higher cost to provide and I don’t need that part of the grid.


I would agree that, in a sense, these are getting a subsidy too, but far less lop-sided than the Amazon example.


It sounds like that's what was happening.


The problem of transparency seems to be getting worse everywhere. Local authorities in the UK regularly refuse to reveal details on the ground that the information is confidential even when the deal has to be debated in public.


Put "amazon tax abatements" in your favorite search engine and prepare to be surprised ...


While it doesn’t seem ethical or “good”, in a certain way I kind of have to appreciate the way how Amazon pits different municipalities or companies against each, extracting maximum value for itself. They play from a clear power position, and by doing so remain in this position.


It should be illegal for municipalities to throw huge tax breaks at companies so they don't have to fight to the death for each and every scrap.

This should also apply to stadiums where, for reasons I cannot even fathom, small cities throw billions into a building that they don't own, that has an astonishingly short life-span, and for which they derive very little in the way of actual benefits.


Completely agree - it's a classic prisoners dilemma, and the solution is to regulate cooperation.


This. If you want to attract business by having low taxes those low taxes should apply to ALL businesses (i.e the actual tax rate should be low), not just the ones big enough to negotiate their own rate. This mark it up to mark it down nonsense just hurts the small players.


Stadiums are a huge peeve of mine, because the people who paid for them can't even use them without paying for tickets! Pretty much every other public building my taxes fund I can make use of.


What is the lifespan of a sports stadium?


For a major sports team it can be as little as twenty years. For the Olympics, two weeks.


Why?


Tax breaks make a lot of sense when they make previously unprofitable economic activity profitable. Especially if that economic activity is a net good for the local community.

Unfortunately, many corporate tax breaks are created to compete with the municipality next door for economic activity that would occur in any case. The key point is that even if all municipalities banded together and agreed not to TIF, then the economic activity would still occur.

Concretely, here's a list tallying the value of Wal-Mart TIFs: http://www.walmartsubsidywatch.org/state_tallies.html

Now, here's the key question: would Wal-Mart (or a competitor) have built all those stores and distribution centers without TIFs? I.e., is Wal-Mart profitable without tax subsidies?

The answer is obviously yes: those stores would still be enormously profitable, so Wal-Mart would still build them. Which means these tax breaks are not creating new value or spurring economic activity that would otherwise not occur! These TIFs are simply a wealth transfer from local taxpayers to Wal-Mart executives and shareholders, orchestrated by playing municipalities off of one another.

Hundreds of millions of Americans pay extra taxes and/or receive inferior services because municipalities won't cooperate in a game of prisoner's dilemma. Great for the Waltons, though.

TL;DR: because allowing municipalities to compete using TIFs results in wealth transfers from local communities to large corporations without creating new economic activity that wouldn't have occured anyways.


I don’t understand it. It seems like all upside for companies like Amazon. Tax breaks, cheap utility bills, reduced red tape. What’s in it for the municipalities? It couldn’t just be the promise of jobs, could it? It doesn’t take that many humans to run a warehouse or data center.


It's absolutely the promise of high-paying tech jobs.

People see salaries of FAANG engineers and think that those companies pay well in gneeral, and furthermore that the tech industry pays well in general.

I've seen this first-hand: people were super excited about an Amazon distribution center being built in a town I used to live in. The thought process goes something like: "Amazon says they'll be hiring hundreds of people and that they will train people on the job. Also, Amazon engineers make 100k. Therefore Amazon will hire me, train me, and I'll be making 100k!"

I think the ship has now sailed on Amazon; people today realize that an HQ full of engineers is different in kind from a distribution center.

But the cycle continues with other low-skill and medium-skill "tech" jobs. For a particularly striking example, see some of the rhetoric around the Foxconn plant in Wisconsin...


Hopefully Facebook will die first, but maybe Amazon will be next...


Kind of like what they've done to shipping costs!


this is the exact same issue with bandwidth costs. when you have major companies using up to 90% of the world's bandwidth it squashes on the resources of the little guys. this is why net neutrality was, in some aspects, not that great.


.


This article is behind a computational* paywall. Paywall articles are against the general spirit of Hacker News. It should be replaced with a mirror of the text or removed.

* A computational paywall is one where you have to run arbitrary code from an untrusted source in order to access the content.


I... think you made up everything in your post.

You made up the term computational paywall, made up that paywall articles are against the spirit of HN (the "web" button specifically helps with getting cached versions of articles or bypass some paywalls through Google redirect. It's available on each thread).

A quick Google search shows you're are the only person who has used the term computational paywall.


I did make up the term. Times change and new words are needed to describe new practices. But it isn't the first time I've used it. I've done so 2 or 3 times on HN.

Paywalls are against the spirit of HN. They always get switched out with non-paywall sources if possible.

The 'web' button unfortunately does not help in this case. The only source is bloomberg.




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