The debate over Amazon’s HQ2 obscures the company’s rapid expansion of warehouses in low-income areas.
There are many other reasons communities might pause before welcoming an Amazon warehouse. But many still welcome the company, believing that it’s better to have some jobs in the new Amazon economy than no jobs at all. Fresno, another economically depressed city in California, offered Amazon $15.3 million in property tax rebates and $750,000 in sales tax rebates to locate a facility there, an offer Amazon was happy to take up. Amazon won $23 million in local tax incentives over two years to open distribution centers in three Texas cities. The company has received $48 million in state, county, and city financial incentives to build facilities in Florida.
This race to the bottom may be preventing cities from holding Amazon—or other logistics companies—accountable. After all, most communities aren’t in a position to negotiate with Amazon to ensure that workers will be treated well. Last year, I interviewed Michael Tubbs, the mayor of Stockton, California, shortly after Amazon announced in August that it was locating a distribution center and 1,000 jobs in the inland city in Northern California. Tubbs is young and progressive, but still told me that Stockton had little power over Amazon. “I don’t think the city of Stockton currently, with an unemployment rate double the state average, is in a position to make a ton of demands on companies who can go anywhere,” he told me. San Bernardino had tried to negotiate that it would get a portion of the sales tax of all the goods that came through its distribution center, but ultimately spent money to build roads and provide police and fire protection to the warehouse and does not get any sales tax revenues from the warehouse, Morris said. (The state of California, not Amazon, quashed the deal.)
As the race for Amazon’s HQ2 shows, other cities competing for Amazon jobs offer up all sorts of concessions, and worry that in passing any wage and hour mandates, they’ll lose the jobs. “I think often, local policymakers are really eager to get companies in, they want employment, but they don’t necessarily give a lot of stipulations about how many of these workers are temps, how many are paid a living wage,” Ellen Reese, chair of the labor-studies program at the University of California, Riverside, told me.
It’s true that cities desperate for jobs may find it difficult to attract companies if they pass minimum-wage mandates or other labor laws. But the alternative, it seems, is jobs that don’t create a middle-class lifestyle for residents, which in turn affects local spending, the housing market, the tax base, and leads to a poor standard of living. Many cities, San Bernardino included, are calculating that any job creation is good news. They may soon find that with Amazon, that calculation does not apply.