2) The city-level incentives are available to any business. State-level incentives (I think 300m) are not.
3) Amazon has pledged to invest in the local community as part of the deal. There are plans for an elementary school and tech education center.
4) The NYC tech sector is more diverse than SV. 47% of tech workers in NYC are immigrants . Is there any evidence supporting the claim that Amazon will ship in majority groups to displace minorities or immigrants?
5) There is direct investment in tech education for minority groups in the city . Therefore it is reasonable to assume that they will receive a chunk of these jobs in the future. If you support increased diversity in tech, it is inconsistent in your beliefs to not support 25k more tech jobs in NYC.
6) LIC built almost 2.8k rental units last year.  I think they have built 6k this year so far. 28k units were built city-wide last year 
Please tell me what about this is bad.
You list several benefits, but benefits don't tell us where a choice ranks in the list of possible alternatives.
For example, the alternative where we get all those benefits, but where there weren't any incentives at all, seems strictly better. Why not that?
You'd probably protest that it's not realistic. We can't get there in the current system, where powerful companies can play states and municipalities off of each other and require the best incentives before they are willing to make any useful choices.
But a lot of us think that system sucks.
When the powerful have opportunities to rewrite local policies on the fly, it doesn't feel right. Doesn't matter how many benefits there are.
This isn't a new or irrational ideal. Much of the Western canon on governance obsesses about the importance of the rule of law: the idea that the laws should apply to commoners and kings (or powerful companies) equally.
It's a principle a lot of people hold very dearly, and are unwilling to sacrifice for a few temporary benefits that we might have been able to achieve anyway, if we just had a better system in place in advance.
Does it mean that everybody has the same taxes and the same governmental benefits/incentives? For examples, if somebody buys an electric car (in California), they get government subsidy and the benefit of unrestricted use of a carpool lane. I don't get this if I don't buy that car. Should I protest this? How about if I put my money in 401k/IRA, it doesn't get taxed, but if I invest it in my own brokerage account, it does? Isn't it laws not applying equally to all people?
You can say - well, the government wants to encourage certain behavior and thus different behaviors have different tax consequences, different benefits and so on. Well, what if the government wants to encourage behavior of commercial mega-corporations investing in specific areas?
I personally would gladly give up all encouragement of behaviors in favor of simple, plain and transparent tax system that is not being used as social engineering too. Good luck passing that through the legislature. And if this doesn't happen, targeting specifically Amazon deal makes little sense.
If carpool lanes were built for the exclusive use of Patrick Stewart, widely loved though he may be, as an inducement to live in California, then yes, we would have the same problem.
> Good luck passing that through the legislature.
Social change is hard, it doesn't mean it's not worth discussing.
There has been periodic political interest in fixing this, and some regions have actually opted out:
I don't think they've nailed the right formulation yet for a broader fix. Definitely a hard problem. But if economists universally oppose some practice, and it's also widely unpopular, it's not the craziest thing to imagine a potential for change.
> And if this doesn't happen, targeting specifically Amazon deal makes little sense.
I'm not targeting one deal specifically, all of these arrangements bother me. But if that's the incentive that happens to dominate the news it will frame the conversation. If the media blitz was about the breaks Tesla got in Nevada, that would be the backdrop here.
Amazon created this media circus with the competition, it gets to be the poster child for the broken system. It's not that big of a hardship, no one is calling for Amazon to be broken up or fined to fix this broader issue.
That's not true - a lot of companies get such kind of deals, all the time. Some even mentioned in this thread.
> If carpool lanes were built for the exclusive use of Patrick Stewart, widely loved though he may be, as an inducement to live in California
If Patrick Steward would bring California several billions in income by living there, then maybe giving him private lane would be a good deal.
> Social change is hard, it doesn't mean it's not worth discussing.
It's worth discussing, but nobody would listen to a proposal for reducing government economic meddling. Everybody love to pile on Amazon and such, but when they go to vote, they ask politicians "bring us jobs". How do you think that would look like? It looks like this - politicians hustle so they can say they brought jobs. In the next election the New York mayor - if Amazon thing works out - would say to his opponent "ok, I brought X thousands of jobs and Y billions of income to New York, here's the list of deals I arranged. What did you do for New York?". And the electorate would listen and support that. So how could they not do it?
> But if that's the incentive that happens to dominate the news it will frame the conversation.
That's the problem. The government meddling happens all the time, but we only discuss it in "outrage of the day" format. But in this format it can never be fixed. Even if somehow enough people become outraged that the deal falls through - Amazon has a long line of mayors willing to do the same. And vast majority of people outside of the "outrage of the day" format think that's exactly what the government is supposed to do. So what's the point of being outraged here? Nothing would change, because that's what people want!
Large retail companies are ubiquitous in our society. It takes a certain degree of socioeconomic privilege to be able to choose not to buy things from them.
Amazon is a great company in a lot of ways, not great in some other ways, and none of that has anything to do with my opinions on local governance.
Or as Yogi Berra might have put it, this Amazon story isn't really about Amazon anyway.
Now if you weren’t a price or convenience-sensitive consumer who didn’t shop on Amazon out of moral conviction, I would at least respect your perspective. But if you shop on Amazon, I’m not sure you get to quote Yogi Berra.
This is about the game, not the player.
Though now I'm misquoting Ice T too...
A trillion dollar company is getting subsidies, when they should be helping to build and grow the society that created them.
Healthcare in America is disgraceful. Absolutely the worst in the developed world. Tens of millions of people in your country live on food stamps. Tens of millions work multiple jobs and are still considered "in poverty". Higher education is so expensive it's prohibitive or puts people in crushing debt for a very long time. General infrastructure is horrendously bad.
The whole point of a society is that everyone contributes to make it better for everyone. When a trillion dollar company gets to pay less that they're supposed to, it makes society worse, not better.
The goal of the society should be to make life better for everyone living in it NOT to raise the stock price of what is already one of the biggest companies in existence.
> When a trillion dollar company gets to pay less that they're supposed to, it makes society worse, not better.
That's where you went wrong. A trillion dollar company is not supposed to pay anything to New York. The minimum NY was getting is $0. That's the starting point. Amazon is free to locate HQ in any other place and NY gets $0 from it. Now, NY can negotiate and get more than $0 - or not, and get $0. It's not like Amazon has already build headquarters and paid taxes and then NY decided to give them back a lot of money just out of the blue. It's like Amazon said "I can bring this much money to the table, but what you can do for us so that we choose you? Lower taxes? Better regulations? Something else?" and NYC considered how much Amazon brings to the table and how much they can do to make NYC their choice and they negotiated.
Now you may want to say "if lower taxes makes the city or state competitive and improves outcomes, how comes not everybody gets low taxes?" Good question. Probably the same reason not everybody gets paid six-figure salaries. Some companies (or people) have more economic clout than others and can demand better compensation in exchange for good their bring to the table. If the city (or employer) doesn't want the goods, they are free to refuse the deal.
Your entire post just described, by definition, a race to the bottom.
Obviously the US is winning that race relative to other developed countries, but I'm staggered you think it's a good thing.
It's absurd to think Amazon is doing NY a favor by bringing more than $0.
That's like if I walk into McDonald's looking for a job and they say to me "Well, you currently earn nothing, so you should be mighty thankful we'll pay you even $1/hr".
There are laws against paying people $1/hr for a very good reason - because if they could corporations would do that to maximize profits. All the employees would suffer. The corporation would make more money.
Which is exactly what's happening with Amazon/NY.
You are right that NY will get more money now that if Amazon had not come, but that's also true that my life would be better getting $1/hr than $0/hr.
But is that a good thing? Do we want people to get paid $1/hr? Does that make for a happy and healthy society? Of course it doesn't, and letting Amazon pay less than they should is exactly the same, and has the same outcomes.
I agree, though in this context we tend to term that "competition". In this case we are watching competition between states and localities to improve themselves and their tax bases. This strikes at the heart of how interstate commerce works and what the rights of the States are.
Sections of the country competing with one another and taking various approaches to the same problems trying to find better solutions and proving them in practice is kinda fundamental to the American Experiment...
Securing infrastructure investments with large corporations is the kind of thing that States are concerned with, and they are supposed to compete for the affection and attention of businesses. Tax code is one of the few levers they can pull in that pursuit.
And I'm really happy when there is competition between Apple and one of their suppliers.
What is really sick about what you're talking about, is that it's competition between trillion-dollar Amazon and regular ordinary tax payers.
When Amazon get the upper hand, they get more money, while the tax payers get crappier schools and government programs.
You are literally talking about a corporation taking ('negotiating') bread from hungry people like it's a good thing.
As GP stated, the alternative is that NY doesn't get Amazon's HQ, and gets 0% of $0.
>You are literally talking about a corporation taking ('negotiating') bread from hungry people like it's a good thing.
If you're going to make such an argument, you might as well claim that they should pay 99% in tax, because any lower a tax rate would be "taking bread from hungry people". Of course, this would be stupid: you'd make more money in year 1, the business would go under, and you're now making squat, and all the poor folks go hungry once more (plus the additional of everyone who just got fired). The percentage is not what matters here.
You could argue instead that the overall country is worse off, but the US is a one that encourages state-level competition, and thats how it goes (ideally, states should be efficient with their limited funds, and taxes should be as low as possible to support their various infrastructures; state-competition encourages this, in the same fashion as any other part of the US economy).
And yet lots of companies pay people more than the minimum wage, for some reason. Doesn't that by itself disprove the "race to the bottom" narrative you are suggesting?
A company can't simply dictate how much it pays you, any more than you can dictate how much it pays you. It's a market - in the best case scenario, both sides have lots of alternatives, and the price you get paid is the best that both of you can do (lowest for them, highest for you).
That's a pretty bad comparison. Why would I take the $1 job? I got way more currently. The only reason I would do it is because I'm trapped and I NEED this $1 to live.
Does NYC is trapped right now? Does they NEED that $1 to live? Not at all, they are perfectly fine, they are the definition of not needing that $1.
So it's more like, you are making 75$/h, Amazon is looking for some part time employee and you do happen to have a few hours left in your week that can fit that. They want to know what you can do for them for theses few hours and you accept after a few rounds of negotiation. It's a 2 ways street, Amazon give to the city and the city give to Amazon. What Amazon offer has a value to the city but what the city offer to Amazon has a value too.
There's no regulation for wage increase, is it? There's only a minimum, because it's when you are at the bottom that it can be abused. Once you are not at the bottom, you can negotiate as much as you want. It's the same here.
The big question is how can we make sure we don't abuse that minimum, but that's a whole other issue.
I grew up in Seattle. I know what Amazon will do, but again, your $1 analogy needs a citation. This is beyond hyperbole.
Every negotiation is "race to the bottom" for the side that is paying - they want to pay as little as possible. However, there is the natural bottom for it - as soon as the deal costs more than it brings in - in fact, as soon as the deal costs more that what it brings in, including reasonable profit - the side that is dissatisfied would refuse to make a deal. What would be the point?
> It's absurd to think Amazon is doing NY a favor by bringing more than $0.
Why is it absurd? If Amazon is doing NY a disfavor, why NY wants it? Do they hate themselves? Are they gluttons for punishment? Were they forced into the deal by a secret Amazon ninja army? No, I don't think so - I think they want the deal because the think the deal is good for them. Of course, you know better, but I think for most people your argument is not exactly obvious. Or correct.
> they say to me "Well, you currently earn nothing, so you should be mighty thankful we'll pay you even $1/hr".
They can. And you can say "go fish, I won't work for $1". And then they'd say "well, how about $10 - would you work for $10?" And you'd say "now you're talking!"
> The corporation would make more money.
No they won't - people wouldn't work for them, and corporation rarely are able to make money when having no employees. That's why only about 2% of the workforce earns minimum wage. One would expect the greedy corporations to pay absolute minimum, right? But they pay way more. You'd have to find a theory that accounts for that. I have one, but looks like you do not.
> Do we want people to get paid $1/hr?
We want people to get paid whatever they can get paid. As we can see, it's in about 98% of cases more than both $1 and minimum wage.
> and letting Amazon pay less than they should is exactly the same, and has the same outcomes.
No it does not. I welcome you to consider why business-to-business transaction is different from person-to-employer relationship (hint: people can go hungry and sick, but corporations rarely die from not being able to locate headquarters in New York). It's a business transaction, one that NY made voluntarily, and one that they expect would be very profitable for them. Of course, as everything in life, they might be wrong - sometimes business transactions go bad - but declaring this transaction is wrong because you could've gotten everything and more for free makes no sense. You couldn't have gotten it for free, and dreaming about it doesn't make current transaction destructive for society, quite the opposite - it brings jobs and investment.
I have little trust in city officials and corporations to be forthright about the deal. The bidding process is hidden and full details are slow to come out to protect the deal.
Payouts to corporations has been a pattern and it should be fixed at the federal level. Companies don’t make a bidding war to help local communities, it’s for their own bottom line.
This is a great point. Politicians obfuscate the legislative deal-making process and tech companies sneak all sorts of clauses into EULAs and employ dark patterns in their software. Why should we assume this deal, birthed from the intersection of politics and technology, be any better?
The ink was hardly dry when they turned around and lobbied the Illinois legislature to let them out of their side of the deal -- while keeping the incentives.
The current Foxcon deal in Wisconsin is looking more and more like Foxcon won't be coming through on all their rosy prognostications. Meanwhile, the SE corner of Wisconsin is all torn up, being rebuilt to accommodate them. In addition to all the other incentives.
And again, it will end up a struggle as to how much they get and what their ultimate deliverables will be.
And often as not, the public side of the equation is far outgunned in terms of very expensive and specialized lawyers.
I'd prefer my communities not even engage in this. Don't open that door. Focus on the people and businesses you already have, and on not screwing them for the sake of some outsider's "vision" -- especially when that "vision" is making said outside, and the local "development" talent they've recruited, very much richer.
Are you talking about the Ameritech/SBC merger?
They subsequently acquired the remains of AT&T; a few other things, and the name with which they subsequently rebranded themselves.
My point was more the "money for nothing" aspect; I merely don't remember off the cuff what exact name/branding they had at that point in time. Ameritech got bought out by ("merged with") SBC. Then the "merged" SBC bought the remaining piece of AT&T that included the name. A lot of the tech stuff, that had ended up in Lucent, went instead to Alcatel, IIRC (making a hole in the Omaha tech scene, among other things).
P.S. That's how I remember it, now. I wasn't involved -- well, other than being rather thoroughly shafted by then Ameritech/SBC (and now I seem to recall their carrying such a combined name, during the transition) on a home DSL deployment. I ended up learning from their own rather thoroughly demoralized tech support that almost all of that was outsourced: Installations, IT, etc. One actual Ameritech/SBC employee (or was it before the SBC "merger"?... sigh) told me that all they could do was file tickets. Those went to third parties, and they couldn't do a damned thing about following up on them.
Doing a tracert showed over ten hops -- sometimes well over, before your packets even left their "network" to the wider world. And that was the least of the customer's problems...
I mean it could be some other program, of course. I'm just trying to figure out the history.
"Money for nothing" was my quip, regarding the company's apparent attitude. The company agreed to it all, then started lobbying to get out of their commitments under the deal -- while not giving up the tax breaks and other concessions they'd gained by making said commitments. The agreement bound them to do these things; they turned around and lobbied the Illinois legislature to "unbind" them, while leaving the rest in place.
Anecdotally, even in Chicagoland, they continued to drag their feet until the cable TV companies starting deploying wholesale. Depending on location, this often was some years later. Then, suddenly. the now-AT&T would get serious about their own deployment. Well, kind of serious: Technically, it often still sucked, by comparison.
This is, in my view, analogous to the failures of big ISP's, in various states, until they face competition, for instance by communities finally just rolling their own municipal and/or cooperative broadband. Then, these big ISP's go to the legislature of whatever state and cry (i.e. lobby), "Unfair competition!"
One has to keep telling these stories, so that maybe voters will pay enough attention to their state politics to vote out their elected officials who participate in these giveaways, that someone at sometime conveniently nicknamed "corporate welfare".
Maybe even vote in and support a state attorney general willing to initiate investigations and, where evidence of corruption can be found, send a few of those officials to jail.
From a regulatory economics point of view, telecom deregulation was one of the big success stories, along with airlines and trucking. For the most part, Western Europe copied it. But our wireline infrastructure is still better than every big European country, because we have invested massively in it: https://www.akamai.com/fr/fr/multimedia/documents/state-of-t... (see page 12).
I'll look later for some old articles, if I don't get too distracted.
I'll consider what you describe and what you linked. From memory and off the cuff, it reminds me of all the fiber investment around that time that seemed to undergo a value implosion and leave substantial "dark fiber" waiting for new projects/investments to pick it up. MCI and Wordcom (?) come to mind. (And the bath that some investors took.)
If I was understanding one of them correctly, a year or two ago, my German friends could get high speed wireless Internet (from T-Mobile) at their newly purchased country home in the middle of the Eifel "Mountains" rural... "farmscape", I'll call it, for I think 40 Euro / month. Fast enough to stream, and no data cap.
Meantime, here I was still reduced to just Comcast, as AT&T had over the course of a decade and a half never upgraded my block's line that was so old and poor quality that it wouldn't even reliably support DSL. And I'm in the middle of suburbia in a fairly dense sub-division. Comcast wanted $95/month for their high-speed Internet (with basic cable TV, the way they price their packages; gotta keep their cable TV demographics up). And that was after arm-twisting one of their reps for a discount. In the meantime, that number's up to about $135/month.
Whatever the state of our technology, it's not translating here to effective competition and prices that compare to what friends are getting in Europe. Not even close. In my limited experience.
P.S. On the other hand, I'd hate to buy an expensive laptop over there.
Which is really remarkable when you think about it. There is no other infrastructure that the U.S. does better than Germany or France. Our trains, subways, and roads are shameful compared to theirs. But our internet access is better. That's a real testament to the success of the 1996 deregulation.
"A Year After Merger With Ameritech, SBC Still Hasn't Met FCC Conditions"
I didn't look much for articles about when, if, or how SBC got out of these FCC requirements.
Will Amazon help to pay for the transit and housing required by their move? Because they're sure paying less than they would have if not for the incentives.
In a sense, it will, in the form of the salaries it will pay to the employees using said housing and transit.
One might say that MTA operates at a loss and is subsidized, but this is a known problem of MTA being anything but frugal.
Realty prices in NYC / Brooklyn / Queens are not exactly low, and new construction is incessant everywhere (which is good). Paying renters or even buyers, the new Amazon employees, will finance their part of that.
"About 71 percent of tech employees in the Valley are foreign born, compared to around 50 percent in the San Francisco-Oakland-Hayward region, according to a new report based on 2016 census data."
Implicit in the appeals to diversity is that women and non-Asian minorities are mostly the target as far as increased representation.
LIC was mostly warehouses at one point and you're right a lot of the new units are housing for people moving away from Manhattan. But the concern is not just about LIC; it's about Corona, Astoria, Jackson Heights. These are areas with a lot of immigrant communities, communities that'll start getting pushed out once the Amazonians move in.
Seattle's always been a one horse economy.
(Something like 15% of workers in Seattle are Amazonians.)
Doing some googling:
Amazon Aug 2017 had 40,000 workers in Seattle:
Workers in Seattle are currently 425,827
So the 15% figure is plausible.
Google says that Seattle has a population of ~725k. Let's say that half of them are working. 725k * 50% * 15% ~= 54k.
54k Amazon employees in the city limits sounds at least in the ballpark.
A trillion dollar company does not need subsidies.
It distorts the competition, ESPECIALLY in the case of Amazon which more or less competes with every retailer everywhere.
It sets a bad precedent (yes, yes, water under the bridge) of big corporations expecting these benefits any time they feel like moving around.
NYC has better uses for the money.
It doesn't need the goddamn money, because it's one of the most successful companies in the entire world, ever. It can finance its operations by itself with absolutely no problem whatsoever. It's ridiculous they're even asking for public assistance.
This is a race to the bottom. Sports stadium construction incentives are good examples of this.
Absolutely incorrect. It's been like this for decades, is essentially universal, and this is barely egregious in comparison to past incentive packages. NoVA and NYC weren't even the largest incentive packages offered for HQ2.
We already have ways to turn corporate money into community services. They're called taxes. I'd much rather we as as a community take Amazon's money and build our own schools rather than have Amazon build an Amazon Education Facility and thank them for their time.
If you believe this, I hear Amazon also has a bridge they'd like to sell you...
What is progress? How do you measure progress?
Many politicians claim that the past decade was progress. I don't see it.
>> 2) The city-level incentives are available to any business. State-level incentives (I think 300m) are not.
Any business? I bet that the average entrepreneur living in NYC would disagree.
>> 3) Amazon has pledged to invest in the local community as part of the deal. There are plans for an elementary school and tech education center.
Of course, because Amazon is such a generous corporation. Just ask politicians in Washington; they've also witnessed that incredible generosity first hand on many occasions.
>> 4) The NYC tech sector is more diverse than SV. 47% of tech workers in NYC are immigrants . Is there any evidence supporting the claim that Amazon will ship in majority groups to displace minorities or immigrants?
This will affect real estate prices and will displace people who are living there right now who can already barely afford it.
>> 5) There is direct investment in tech education for minority groups in the city . Therefore it is reasonable to assume that they will receive a chunk of these jobs in the future. If you support increased diversity in tech, it is inconsistent in your beliefs to not support 25k more tech jobs in NYC.
I don't buy these benevolent corporation arguments. Even if you assume that Jeff Bezos was a saint, I'm pretty sure that the many layers of selfish or apathetic middle-managers working under him will find a way to divert much of the funds back to themselves somehow.
>> 6) LIC built almost 2.8k rental units last year.  I think they have built 6k this year so far. 28k units were built city-wide last year 
Great in theory; but in practice, NYC is full of homeless people.
If you are unsure how to measure something, surely you shouldn't present a result.
Citation? By most metrics we've improved as a society in the last 10 years.
Donald Trump, Brexit, Facebook, opioids epidemic, cryptocurrencies, increased rents, soul-crushing corporate jobs for all.
The world moves forward just fine, and there hasn't really been many differences between America today and America in the 80s from a broader political standpoint. Maybe our country was a better place when unions mattered and the wealthy had a legitimate fear of a socialist revolution should concessions to the middle class not be made, but the fall of the soviet union in many ways put that fear to rest.
As the article says, they give up $1.5B over 10 years, but then get "Projected incremental tax revenue of more than $10 billion over 20 years."
I dont know where that comes from but the payroll and property taxes paid by 25k employees dwarves the incentives.
The most important part is it cements NYC as the main tech center on the East Coast. That is invaluable.
EDIT: I wonder if NYC with tax incentives, Amazon would still pay more tax than regular tax rates in FL, TX.
New York City doesn't have a problem attracting jobs. Like not even a little bit. The idea that this is actually incremental revenue for the city is extremely debatable.
New York City is a really big place. Midtown is the largest central business district in the country, and Lower Manhattan is the third largest, after Chicago. There are 1,700,000 jobs in Manhattan alone and 3,900,000 in New York City. We're supposed to all bow down before a sixth of a percent change, spread out over 5-10 years? Really?
There are single buildings in New York City that employ as many as 25,000 people. Back when the twin towers were around they contained 55,000 employees between them.
JP Morgan Chase is putting about 15,000 employees in their new HQ building, without a breathless 13 months of coverage. This shit happens all the time. You could pick any number of random single city blocks in Manhattan with way over 25,000 jobs.
Amazon needs New York way more than New York needs Amazon. It's the global center of media, fashion, advertising, finance, and many other categories of Amazon's business.
This giveaway is a goddamm travesty. How about instead, Cuomo gives me and any other startup founder who's been in Brooklyn or Queens for decades $48,000 for every job we've created, and we tell Amazon to go fuck themselves.
It absolutely would've been smarter for amazon to remain in midtown like they currently are since it would be much easier to recruit from the suburbs many existing tech workers live in, but they would've lost over a billion of the incentive dollars they got in the process.
Wouldn't it be nice if your options for working in tech didn't consist of a handful of large banks and hedge funds?
This potentially puts NYC on top for retail again. I think incentives and payments for this purpose is a meh idea, it if you’re going to do it, bet on a winner.
The beauty of NYC is that it is not singularly focused like SF is. Media, Fashion, Finance, Tech all call NYC their home.
I think most of the hate is fueled by emotional anger at the rich due to increasing inequality in the USA, even though this investment in NYC is a positive for it when you look at it rationally.
He's saying the tax breaks provide create no gain for the city, but he's not disputing they're valuable to Amazon.
They're also not valuable to taxpayers, who are being forced to subsidize one company without the opportunity to voice their opinion a priori.
Finally, there's the incremental point that countless other entrepreneurs are not enjoying these same benefits. Not the biggest issue with it, but an important one nonetheless.
Why don't you use your leverage as a job creator to go to a town and get similar benefits since clearly you will bring the same level of benefits to that town? Or do you recognize your lack of mobility and limited investment in your town may result in a less favorable negotiating position. It's like wondering why a used car dealer gave a better deal to someone w/ a better trade in.
So true. The rent in NYC is already very high. What kind of lifestyle can a blue collar worker afford in NYC? Obviously the only winners here are corrupt politicians and greedy Amazon execs. They should all be jailed.
You can dislike tax incentives if you want to, but the hyperbole is so over the top it becomes radical, divisive, noise.
We need less of this in these discussions.
Calling for a blanket incarceration of legislators and Amazon executives is not.
Amazon and Google are not regular employers: your startup pays outlets in taxes and mooches off infrastructure. The big companies find that with real profits.
Finally, $48k/employee is peanuts to a big city startup, and typically that kind of money is available from accelerator/etc programs.
As it happens I don't have a Silicon Valley venture backed profitless startup, I have a company that gets paid money to do work and makes a healthy profit. I've paid very considerable taxes in NYC for 20 years.
Now, literally, they are handing them to Jeff Bezos in exchange for nothing. That area of LIC would just be something else instead. We don't need these guys to bring "talent" this is literally New York City, a giant magnet that has drawn the most talented people on the planet for at least a hundred years.
Cuomo is an obvious crook and has been since conception, and this deal sucks. I see no reason not to point that out.
This is a shocking display. What they are calling a government-private partnership is nothing of the sort. It's a public subsidy to Amazon. The New York Times reported $5 billion in this project will be invested by Amazon. $5.5 billion dollars will be invested by New York and Virginia. That is a subsidy of over 50% of the cost of this project. We the taxpayers will be either paying higher taxes to fund this private company, among the richest in the world, or, if we don't get our taxes raised, the government will deliver fewer services to us because it has given this enormous subsidy to a company. $5 billion from Virginia and New York where Mr. Bezos, the owner of Amazon, is himself the owner of $160 billion. He didn't need it, the company doesn't need it. We are being asked to subsidize. All of the profits will go to the private companies and their shareholders. We, the public, will be funding more than half of this project. Shame is what Mr. DeBlasio ought to feel rather than posing in the PR as if he has delivered something. [...]
The projected number of jobs in the New York area from this is 2,500. That's a very small number and will have no effect on the unemployment problem of this city [New York City] it's just too small and that's not a surprise [...] because the kind of work Amazon does is highly automated; it uses machines for 90% of what it does. And half of the people it's likely to have working in New York will be brought in from other parts of the Amazon empire.
They must be really serious about drone delivery...
I don't take Amazon's numbers seriously until they show that they will live up to their own hype. If Wisconsin's Scott Walker was elected on making 250,000 new jobs in 2010 he has fallen far short of that. One of his job-creating deals was Foxconn, something he used to tout heavily but tried to shy away from when he last ran. Foxconn's 13,000 (I'm assuming human) job figure for Wisconsin hasn't been met. I'll believe it when I see it but I still don't see how New York is getting a fair deal in this; it seems like they have no problem attracting businesses to their city and don't need to give nearly as much as they are.
Transcript should arrive here eventually: https://therealnews.com/stories/amazon-gets-3-billion-in-ny-...
Some of the highlights of the jobs points that makes it clear the exact figure of the promised number of jobs is virtually irrelevant precisely because so little is asked of Amazon here:
- Ben Norton says that in 2017 NYC gained over 72,000 new jobs. Therefore the money NYC is giving Amazon with virtually no strings attached effectively buys them about 4 months of job growth. That's a remarkably low number of jobs for such a large amount of money.
- It's not even clear if the 25,000 jobs are new jobs or if Amazon will shift workers from one location to HQ2. This means New Yorkers are subsidizing job movement for extant employees.
- There are no performance guarantees for Amazon in this -- if Amazon doesn't add the promised number of jobs, or if those jobs turn out to be significantly less attractive (perhaps near minimum-wage jobs, it takes Amazon a decade to add these jobs, or the jobs are done remotely thus pitting New Yorkers against the rest of the world) there's no penalty for Amazon to pay. No Amazon profit-sharing to NYC.
Yes it brings talent. But that doesn't mean such people are startup talent.
It's also going to drive up demand for housing (read: the cost of housing). So for those __not__ employed by one of these, the question becomes: how much __startup-centric__ talent are they driving __out__ of your area?
Long to short, the market is being manipulated, and it's being manipulated by the government. The gov created the house bubble and the student loan bubble. If there are examples of the gov manipulating the market and that ending well for taxpayers, I'd like to read about it.
I'm not sure this type of competition is a great thing for citizens, but is this really a wealth transfer from the poor to the rich? Doesn't most tax revenue in the US come from the rich, meaning they're covering most of the bill? In that case it would be more like wealth transfer from rich people to rich companies with some of that wealth making its way back to a subset of rich people and companies (i.e. investors).
I'm sure there are secondary effects impacting the poor but I'm not sure it's as simple as mean rich people reaching into the pockets of the poor - there's not enough money there for it to be a compelling strategy.
Doesn't matter where tax money came from, that part we are not changing. What changes is where that money goes. It could pay for schools, Medicaid, homeless shelters. Now there is going to be less of that, as we are building a helipad for Bezos with some of that money instead.
Which is why it's a wealth transfer towards the rich.
Yes, it could, but that doesn't mean it would in the absence of the incentive for Amazon. I didn't see any indication in the article that this would be paid for by reallocating funds from social programs or education. Has NY indicated how they're funding the incentive elsewhere? If this isn't known, how can you confidently say it's a transfer of wealth from poor to rich?
To be clear, I absolutely think there are probably more socially responsible things to do with the money, but there's a difference between opportunity cost and exploiting NY's poor to build Bezos a helipad.
Where did NY indicate that they're reallocating money from those programs?
I don't think they would. Big infrastructure in New York is expensive, financially and politically. Without Amazon's pressure, there is no way the new campus would have been developed, hooked up and approved as quickly as it has been.
That's just as bad as Irelands tricks helping to avoid taxes due in the UK and other eu states
Which is also why we see the EU go after Ireland and require that they collect taxes from Amazon :)
I recall Vestager starting to get the ball rolling a few years ago.
https://www.duijntax.com/en/advance-tax-rulings-negotiations as just one example reference I could quickly find.
Could that possibly make Amazon more efficient, and so employ more people who spend their salaries and so on, creating a net gain for the whole US?
They'd be much better spending that money on their neglected public transit or their neglected public housing...
But some cities were suggesting that! They were going to invest in infrastructure, knowing that the extra income from Amazon in the area would pay for it. It was not a zero-sum game.
For example some cities were proposing building things like extra train stations, which benefit everyone, and aren't something Amazon could have done privately.
Public infrastructure is available to all.. why can't the public finance it without Amazon?
Cities may have been hoping that with Amazon moving into a region they would have extra tax receipts which would enable spending they would not have been able to afford before.
But even then, there's probably some inefficiency in that replacement.
Company A creates a “new” job. They hire an employee of Company B, who in turn poaches a replacement from Company C, and so on.
It’s fair to assume that some hires will be new arrivals to NYC, and some might come from the pool of unemployed. Most will have simply hopped from one employer to the next, replacing one job opening with another.
How about for tech workers to get a raise? Or to move to a different part of the city? And besides, this is just conjecture. Do you have any data or polls or even anecdata which supports your claim?
One of the big issues I have with these deals, is towns/cities don't have experience adding safety clauses to these, that are legally binding..
An equally good deal would have been not paying 48K and getting Amazon elsewhere in the US. I mean, not for NYC, but for the US as a whole it would have been equally good.
The race to the bottom is lined with "good deals"...
And an even better one would have been free ponies for all and rainbow shitting dinosaurs. Also wasn’t on the table, however.
$1.5 billion in housing or just really anything to help people who already live there is what should happen.
New York has a problem. San Francisco has a crisis.
I just negotiated a 2% rent cut. Like four luxury buildings opened nearby and sucked out our building's highest-earning renters by offering lots of perks for marginally more rent. I asked my landlord if he wanted another vacancy or to keep a hassle-free tenant--he budged.
And my experience is not that unique. "Manhattan rents dropped 3.8 percent in March  from a year earlier, the most since 2011" .
Also, NYC doesn't have nearly as much of a NIMBY problem as many other American cities. We continue to build lots of housing here.
Additionally, there are hundreds of thousands of people who are rent burdened in New York, even in those places with so called cheap rent such as within south bronx.
And then there's also registration, emissions testing, annual inspection, and other miscellaneous fees that vary by jurisdiction, but that can easily cost hundreds per year in total.
Nothing stays forever in NYC which is kind of why it is such a great city.
People who live here will benefit from this. NYC has a much more diverse candidate pool than SV - 47% of our tech workers are immigrants. Our schools are more diverse; there are more programs to teach underrepresented groups CS skills. They will benefit from this.
>gentrifying forces of a thousands of tech employees.
Can you explain how gentrification will actually play out, and how it's different than 25k jobs being created organically over the next decade?
>$1.5 billion in housing
Just because Amazon has been given an incentive doesn't mean that housing gets short sticked. https://www1.nyc.gov/site/hpd/about/press-releases/2018/07/m...
Apart from having to compete with NYC’s already bustling tech presence, they’ll be competing to hire the same engineers that investment banks, hedge funds, and HFT groups are after. The comp packages in fintech are impressive, and generally all cash (as opposed to a mix of cash and stock).
This has long ago been cemented...
For the last decade Cuomo has been giving subsidy after subsidy, tax break after tax break, to corporations from Long Island to upstate New York. Each one came with projected revenues and gains, and each and every one failed miserably and ended up costing NY taxpayers countless billions - while most of the corporations walked away with a profit.
That's key then isn't it. Where it's going to come from needs to be clear, or else there's a very real risk it's not a good deal.
Sales pitches stack the deck on expected benefits ALL the time. Diligence is essential here, and the devil is always in the details. 'Potential benefit' rapidly morphs to 'definite benefit' when stuff percolates up into articles etc.
Gentrification concerns are thus overblown, and our local pols are known for dramatizations like these for political gain (at least on camera/Twitter, less so when it comes to campaign support and backroom lobbying deals).
The controversy is in the tax incentives primarily.
Citing an example of some Berliner NIMBYs is not really helping your argument.
It seems you didn't read my prior comment, some of their elected officials are opposed to Amazon moving in.
> Citing an example of some Berliner NIMBYs is not really helping your argument.
It shows how a community can fight back. Much of the change mega-corps bring to the neighborhoods and cities they set up shop in is not good, current locals definitely have a right to reject.
The opposition to an almost-done deal is almost always louder than the support. Supporters want to keep the status quo, i.e. the deal closing. Opposers want to stop it.
I think this is a good deal. I prefer having Amazon in New York, and I prefer the billions of extra tax dollars they're going to pay New York City and Albany versus potentially losing those dollars to another city, state or country. I'm not making a lot of noise because I think the Mayor and Governor have it handled.
TL; DR I don't think one can assume popular opposition to this deal.
News of this deal conveniently came out right after Cuomo was reelected
I'm happy to pay my taxes for certain uses but am still entitled to complain if my elected officials use tax revenue to fill a room with gold coins and swim around in it like Scrooge McDuck.
Perhaps they like the idea?
Seems better than presuming lack of consent and lack of support based on lack of vocal opposition?
This is over 10 years, so ~$5k/job/yr. For reference, economic development incentives for corporate relocations are commonly $20k-75k per job, and often for jobs paying much less than Amazon is expected to pay HQ2.5 employees. Also, I believe that Amazon will receive tax rebates based on the number of jobs created over time, which is better than many packages that don't have any accountability, limits, or clawbacks.
I don't think economic development incentives are a wise use of funds, but this one is notably only for the scale and publicity. People are so mad because this the first time most people have heard of the practice.
For more information (and many much worse examples), see the book "The Great American Jobs Scam" - https://www.amazon.com/Great-American-Jobs-Scam-Corporate/dp...
It's yet another perfect example of government gone wild. It's one thing for to use taxpayer monies to create jobs and job opportunity (i.e., education). That's a reasonable expectation within the scope of gov's governing.
However, it's another thing for gov to buy jobs - and thus votes - by effectively subsidizing some mega-corporation. If Amazon needs money, that's what Wall Street is for. If Wall Street isn't willing to give Amazon et al money then that's a red flag and taxpayers should naturally stand clear.
Some might say, "But without such things Amazon would have to raise prices, and that's not good for consumers." But it's the consumers that paid the __higher__ taxes to supply the subsidy. The difference is, with the latter method the gov gets to skim some off the top.
Bottom line: The taxpayer / consumer loses. Politicians and Big Inc win.
There's plenty of unfulfilled demand for software engineers in NY, what does Amazon offer to add to supply?
You wouldn't know that from the pickiness of some companies around here.
If the question is "do companies, in general, know what software engineer they need for a position?" my answer is almost universally no.
In the EU we have rules against things like this. As it's considered anti-competitive behavior.
That's not a foregone conclusion.
Regardless, the gov should not be in the job buying biz. My gawd, they struggle to govern, and that's their job. Pockets are being lined - once again - at the expense of the tax payers.
"Each one of these $150k jobs..." Pardon me, I know this type of reply is frowned upon on HN, but...wanna buy a bridge?
Says you. I think they do a better job buying that biz than many of the other biz's they buy with public funds. If you want to see pockets being lined, look to things that don't have returns on investment or are poorly managed in real corrupt ways (ala many public pension plans). Not comparing dollar spent to dollar spent of tax money compared to benefits makes it clear some are just anti-private-sector.
> "Each one of these $150k jobs..." Pardon me, I know this type of reply is frowned upon on HN, but...wanna buy a bridge?
Are you implying that the average salary to get the incentives isn't going to be 150k/yr as stated their agreement?
Again. The gov created the housing bubble __and__ the student loan bubble. I don't say they should be in the job buying biz. __The Gov__ has said that. Whether you're listening or not is up to you.
More specifically, you should believe based on your examples that they shouldn't be in the money management business. Because they are really bad at it. I can definitely sympathize with those applauding them for taking less as a way to promote growth.
How so? One is within a reasonable scope of governing. That is, most citizens want and expect a reasonable amount of economic stability. The others are outside of scope and simple a tool that politicians use to buy votes. And if that's going to be the case, then the least we can do is be honest about it. Denial doesn't make it any better.
Just because something has persisted doesn't make it right.
The fact is, Amazon (and others) played __our__ elected officials/ representatives against each other __at our collective expense (read: to Amazon's benefit).__
Not only that, __we__ paid to help Amazon find a new HQ location. So now imagine all the communities that did __not__ win.
Finally, imagine is that time and money was not put into a roll of the dice?
This was a __big__ win for Amazon. This was a big win for politicians. As for the taxpayers all across the country and going forward, the true benefits should be questioned. If we dare.
This banking crisis, fraud, education loan bubble is the direct result of 30 years of neoliberal free market policies. Yet instead of owning up to their mistakes in an act of brazen revisionism and fraud they are blaming the government for listening to them, and this is taken seriously. This is ideology.
A govt hijacked to promote special interests is not a government, its a plutocracy.
Um. Wasn't it the gov that committed to policy of more home ownership? It was the leader here. It helped to craft and define the direction once it opened up the dereg gates.
It's important to note: "Dereg" !== free market. Dereg is a nice word politicians like to toss around, but ultimately, that typically translates into some other set of rules, typically favoring some entity over another.
The gov is VERY fond of taking sides, gaming markets, etc. It might be presented otherwise, but it's still trying to exert unnatural influence.
And didn't it do the same for making cheap student loans available to more students? Students who weren't really "college material"? Wasn't BHO still championing higher edu __for all__ - because it plays well in the polls - all the while knowing the monster that had been created and still wasn't properly fixed? Yes, such antics are great for buying votes but it ultimately drives up the price.
If the gov (read: votes) is involved - as it was with this Amazon deal - then the market __is__ being manipulated. Anything beyond that is lip stick on the proverbial pig.
Appreciate your clarification.
That is, there is capacity but supply is being held back.
In the few exceptions (like Seattle for example) where they aren't tiny due to new supply: surprise! rents are dropping.
But yes, of the housing available in the market, tiny. But there's plenty of housing held off the market.
I understand this does happen internationally, between nations. Not that it is a good thing, but seems very difficult to stop. However, at first glance, it seems absurd to me to allow this to occur within a single nation, between the different sub-localities. How does this benefit the US as a whole?
If a given community put out a RFP / RFQ that said, "Here are our assets. Here are something things we might be able and willing to offer...Which of you are interested in coming here?"
Perhaps not free market, but certainly closer to fair and less corrupt.
If this was a community decision why is there pushback in LIC? Because, it wasn't a community decision. It was the gov using taxpayer money to subsidize one of the largest most successful companies in the world.
Fact: The Gov created the housing bubble.
Fact: The Gov created the student loan bubble.
Fact: The abatements in __your__ community came out of someone else's pocket. That money had to come from somewhere.
> The abatements in __your__ community came out of someone else's pocket. That money had to come from somewhere.
Abatements are not gifts, they are reductions. The money that was not taken did not have to come from anywhere. The reductions did not amount to a negative total (not even close in my case), and therefore the abatements essentially amount to a sale price, not below cost. In other cases, such as sports teams, the benefits of the trade-offs are not as easily recognized because they are not purely financial. But here, it is simpler to understand the bulk discounts in exchange for economic growth.
Yes. But you make it sounds like the gov services being provided was also reduced. Is that the case? If not, then that means the services being provided still have to be paid for. So if it's not your community, then where do you think that money is coming from?
No. I stated, "The reductions did not amount to a negative total" which includes public services. I am saying the new tax income more than covers the services needed. Cost per resident is not linear. Again, these are sales prices, not below-cost prices. Governments are reducing tax rates to significantly increase tax totals, a reasonable investment.
> where do you think that money is coming from?
The same place it otherwise would, just at a reduced bulk rate.
Let's also note that FoxConn is not Amazon. Also, NYC doesn't really have a problem attracting employers - especially not one who is likely to crush their local economy one same day deliver at a time.
Your point is valid. But the scale and precedent of this latest "deal" is more questionable.
I like how you tacitly acknowledge the large corporate entity shares a little responsibility in there at the end. Yes, this is a government failure but it is also the logic of capitalism at work, which says that money should come before all other considerations. Government is rather corrupt, but it is business that has corrupted it.
It does? I'm pretty sure it's just a system of allocating resources.