The problem is that Amazon's end of the deal involved a lot of ill-defined promises, and their obvious unwillingness to negotiate was a sign of intent to strongarm the city into further concessions. Even if, on paper, it was a financial loss to have Amazon pull out, it sets a strong and positive precedent for New York and other cities across the country.
2. We don't know actual the distribution of salaries
3. Beyond the existing Future Engineer program, there is no specific commitment to training and hiring from within NYC (instead of importing talent), beyond a $5 million promise to do.. something? in the Queensbridge Houses.
4. We don't have any specific commitments to infrastructure development, again, beyond than a rough dollar amount.
5. Absolutely no word on handling externalities and market distortions imposed on housing markets in nearby neighborhoods.
There is no other deal even approximating this one in scale, and so there is no way to do this analysis. The alternative is much, much slower jobs, and thus tax revenue, growth.
"In my 23 years in the State Capitol, three as Budget Director, Amazon was the single greatest economic development opportunity we have had...For a sense of scale, the next largest economic development project the state has completed was for approximately 1,000 jobs."
> 2. We don't know actual the distribution of salaries
Honestly, I don't really think this is a legitimate issue. We know that they are overwhelmingly white collar technology jobs at an average of $150,000. It is extremely unlikely we'd get any surprises here and it's hard to understand what they'd even look like (5000 managers and 20,000 janitors?).
> 3. Beyond the existing Future Engineer program, there is no specific commitment to training and hiring from within NYC (instead of importing talent), beyond a $5 million promise to do.. something? in the Queensbridge Houses.
These aren't requirements we put on any other company going through the Excelsior Jobs Program. New York City is a melting pot city. What makes us great is that we have people from all around the world here. One of the prime things we want to do as a city to make it a great place to live is make it a place people want to move to work. If people aren't moving here to work than New York City is in bad shape.
> 4. We don't have any specific commitments to infrastructure development, again, beyond than a rough dollar amount.
Beyond $27 billion dollars in additional tax revenue. If we can't deploy that money to adequately fix our infrastructure problems it's difficult to see how that is Amazon's fault, or how any other company would do better. In fact: assuming we were able to get anything close to the level of scale we'd get from the Amazon deal from smaller companies we wouldn't be able to get any additional commitments from them beyond the discounted tax revenue, so it's difficult to understand where this expectation comes from. They make no contribution to infrastructure other than the massive one that the law already says they have to make.
> 5. Absolutely no word on handling externalities and market distortions imposed on housing markets in nearby neighborhoods.
Again, it's difficult to imagine the alternate reality you want to live in here, but it seems to be not growing the city.
The outcome of this process is incredibly bad for Amazon. Seemingly what they achieved was a deal with Virginia. Virginia didn't offer the best incentives but Amazon needed to be there for the lobbying opportunities. Their second HQ plan has collapsed in NY and now they have to re-plan their expansion. Meanwhile the process seems to have been tailor made to damage their corporate image and create a movement against corporate welfare. Now this drags on with it being obvious that Amazon can't go to NY now, but they're still getting headlines to remind everyone of how badly they mismanaged this process.
And as for what individual people who don't live in NYC think about the city, it really doesn't matter. It is and will for the foreseeable future remain the preeminent metropolis in the United States. What someone who lives in St. Louis or Atlanta thinks about it is of no importance.
Is the Northeast talent really worth that much more than the Texas Triangle+Gulf Coast or the Great Lakes?
Choosing NYC has to be more than JUST talent pool. It's about being close to other businesses, close to wall street, close to trade and immigration. It's about joining a community that dictates a lot onto the rest of the country.
Really? Because I'd say this example exactly proves it changes corporate behavior.
Don't forget the US is full of cities that are now shells of their former selfs. I'm sure they never felt they need to be "open for business" either. NYC isn't going away, but it wasn't that long ago it was viewed as a bit of a "crap hole".
Why take a PR beating for an unsure thing that looks increasingly likely to fail, and become the center of a political circus? That’s definitely not NY doing it’s end of the proposal. A business needs stability and safety to plan and grow.
It’s unclear why Amazon would want to fight NYC to be in NYC after NYC threw up roadblocks to NYC’s proposal actually happening.
"Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state 'gave' Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner."
She further exaggerated news stories about Amazon's treatment of fulfillment center workers without bothering to mention that current conditions for existing FC's are much worse than what Amazon brings to the table.
Because I'd be interested in hearing about the latter.
It really sucks how amazon played the game. If they agreed to no tax breaks, all that is mentioned in the link above would be headlines instead. But no. They never wanted to commit to that. Both sides are at fault and the general public suffered because of politics.
That said, the $3 billion is not the full price tag (externalities, etc.) and the $27 billion is not the whole story (can we see your raw data please?).
I'm not sure which raw data you'd like, but if you can be more specific I'll do my best to find it.
The local community could have spent the increase in tax revenue on providing social services. I understand you oppose the deal not out of some economic principal but from a moral principle. But even the moral principle is wrong. Taxation has been used to incentivize behavior since the inception of taxation.
Turning away funds that could benefit the needy, out of a principle to help the needy? That's a head scratcher.
This guy would have made a lot of money selling sandwiches to tech workers.
Small businesses can't get the tax break Amazon is demanding. Why should we allow big businesses to play by a different rulebook? The only reason Amazon can get away with it is that other jurisdictions are prepared to debase themselves for the economic benefit Amazon brings. In effect, big businesses reap the rewards of living in our society without shouldering the burdens.
(Not even going to go into the "race to the bottom" that is created or the ugly optics of parading HQ2. Both warrant a discussion of their own).
Not saying that the way things turned out is ideal, but I lost much more respect for Amazon than I did "progressives". I say this as a firm believer in free markets and limited government.
[To the people downvoting my comment or the children comment I'm engaging with: please join the conversation with your voice instead of stifling our discussion. Downvoting is not how you express disagreement]
It's in proportion. Amazon got the "big tax break" because it offered even bigger returns (9:1 as mentioned in the letter). There was no debasing here. How many doors were now closed because those 25000-45000 jobs are gone? How many struggling families would love to tell those who think this is a "victory" to shove it because they were dreaming of an opportunity like this coming to their doorstep? As we now see, the vast majority of actual New Yorkers, and not self interested politicians, outsiders, and the vocal minority (primarily organized by the union) supported this.
Idealism is the enemy of progress.
"without shouldering the burdens"
Amazon would still pay plenty of taxes there, as well as their well-paid employees. It would have been of enormous net benefit to NYC.
Quantity discount is OK when you're buying food or bus tickets. Not when you're paying taxes.
Notice I did not say that Amazon would not be paying taxes or that it would not be a net benefit for New York. It is however a detriment to small businesses across the country and to our society as a whole.
It's harmful in a similar way to how selling your mother's jewellery for a crack hit is harmful. the local high is not worth the long-term effects for New York or society.
I fail to see how 25,000-40,000 high paying green jobs has any relevance to a crack hit.
I'll try to make a more skookum case after my test!
It's also worth thinking about the fact that those jobs will be created anyway. It's not like Amazon will just choose not to grow its workforce. What I'm saying is that no jurisdiction should offer preferential treatment to one company. If you would like your city to have very low taxes, great. But everybody should be able to take advantage of them, not big companies alone.
The crack bit was meant to highlight the short-term vs. long-term effects. Short term, Amazon comes to town, many jobs are created, all is great. Long-term, biasness across the country will fail to compete -- some for good reason, others because they couldn't get preferential treatment.
> So the difference between the state and private citizens is one of choice. You have no choice but to deal with the state
Amazon is an interstate business with $240B in revenue. New York City has $100B in revenue. Amazon has a lot of different cities to choose from. They aren't trapped in any meaningful way, which is why this is a negotiation at all.
> When the government treats two entities differently, the one with the advantage can put the other one out of business if it acts competently. So Amazon would be able to eat all the little guys.
The deal offered to Amazon is the exact same deal offered to any business moving jobs into the state (including any of Amazon's competitors that would like to take this deal). Please look at the requirements for qualifying here: https://esd.ny.gov/excelsior-jobs-program
And if you don't want there to be big businesses in New York State I feel like that's kind of a separate argument.
> We see the gain because it happens in one place. The pain is spread across many businesses -- possibly numbering in the thousands.
This is nonsense. It goes completely in the face of basic economic principles. More jobs creates an increase in aggregate demand which helps everyone. Beyond that, the gain is extremely diffused through taxation.
> It's also worth thinking about the fact that those jobs will be created anyway.
This is totally false. Amazon currently employs about 1/6 of the number of people they would be employing at the low end of the estimates. Will Amazon continue growing their NYC offices? Of course. To the tune of 80-90%? Absolutely not. Those jobs are going to Virginia, and along with them one of New York City's prime chances to diversify away from finance money. Beyond that an additional 11,000 union construction jobs were lost.
> What I'm saying is that no jurisdiction should offer preferential treatment to one company. If you would like your city to have very low taxes, great. But everybody should be able to take advantage of them, not big companies alone.
Again, this is pretty ignorant of the reality of the situation. I don't think there is a single state without economic development programs similar to the Excelsior Jobs Program. These programs are widely supported on both sides of the aisle as being beneficial to everyone. The idea that the tax break to Amazon equates to "very low taxes" is wildly misleading. It's a temporary 10% discount on the city with literally the highest taxes in the country, and again, very very small companies can and have taken advantage of the Excelsior Jobs Program.
> The crack bit was meant to highlight the short-term vs. long-term effects. Short term, Amazon comes to town, many jobs are created, all is great. Long-term, biasness across the country will fail to compete -- some for good reason, others because they couldn't get preferential treatment.
The long term effects are also New York City further cementing itself as a tech hub, diversifying away from finance. This could've been a huge, decisive step in that direction, signalling to other companies our commitment to the future and technology. Instead it was a lost of 36-51,000 good paying technology and union jobs, and a loud signal to this country's tech businesses that we will not be welcoming to them. And again: the preferential treatment thing is just not reasonably true. All companies moving a significant number of jobs to New York City have access to the Excelsior Jobs Program.
Do not really represent the people of NYC or NY state. The Governor won a "lesser of two evils" vote after a hilarious sham of a primary. The mayor is not widely liked, either, and has a history of cowing to special interests.
Business leaders, who cares?
Let's also set some things straight.
First, those numbers only make sense if you assume the land in LIC would remain undeveloped, and the city's $3 bn left unspent over 10 years. Obviously there will be other development in the area. LIC is already white-collar yuppie colony and tech companies are still coming to NYC in search of talent. Heck, Amazon already had plans to move to the city.
Second, "average of $150K" is meaningless. Does that include or exclude Bezos' salary? What's the median number? What's the 25th percentile?
Third, how many of those jobs will go to New Yorkers, versus be imported from other cities? What is the cost to other residents? Who, if anyone, will need to be compensated? Nobody has done any of those calculations, to my knowledge.
Fourth, has Amazon made any concrete commitments to transit development on paper?
The list goes on. There's a lot more at play here than the "sticker price".
Also leave AOC out of it. Blocking this deal wasn't her idea, she's just the one who posts on Twitter too much. Look to more reasonable (and powerful) politicians like Michael Gianaris.
Why would anyone include Bezos' salary among the freshly minted 25,000 jobs! This is such a straw-man!
> Third, how many of those jobs will go to New Yorkers
Who says there's an agenda to not employ qualified New Yorkers? Why is it criminal for other Americans to get those jobs, if qualified? Is there some NY jingoism at play here that Amazon and the US are unawares of? It is a federal crime to discriminate employment against state/city residency!
> Fourth, has Amazon made any concrete commitments to transit development on paper?
That is expressly the job of elected officials, the sensible of which are actively wooing Amazon for the increased tax income, that can then go towards transit, and other public programs.
> Also leave AOC out of it.
Is AOC some protected class among politicians, whose demagoguery is apparently off limits for criticism? She has actively pitchforked outrage on the matter, and is absolutely a part of the discussion.
2. Call it jingoism if you like, but there are good reasons to be skeptical of what happens when you import labor en masse without employing the local population first.
3. You can't trust an elected official any further than you can throw them. If something hasn't been signed it's as good as worthless. There is a good reason we put so much weight on contracts in our legal system. Most other businesses operate on those terms; I don't see why I should trust my elected official any more than I trust my employees, my employer, etc.
4. No, but her embarrassing ignorance is irrelevant to the discussion.
Exactly. This was a show from the beginning and still is.
Someone just tell me.
Of course the city was giving them something - that's what the $3b in "tax relief" was about.
For example, if you buy 10 cars from a dealer you're going to get a better per-car deal than if you buy 1.
Apparently my friends and I all pulling in the ~150k range salaries are also middle class, just, uh, "upper middle class." Doesn't make a lick of sense to me.
But while I'm here ... bourgoisie to me conveys the sense of traditional morals as well. In contrast to the purported morals of the lower and higher classes.
If Amazon does not come, there are no winnings, and no one pays.
If Amazon does come, it comes from their tax payments which would have otherwise not existed, and again no one pays.