Our view: For Amazon, skilled workers trumped low taxes
You have to wonder what people in places like Appalachia or the Rust Belt are thinking about Amazon’s muchawaited HQ2 decision. While these people can only dream of an influx of high-paying jobs, they have to watch residents of Seattle, New York and Northern Virginia complain about the burdens of having too many affluent people in their neighborhoods.
Amazon, the retailing giant that sells everything from cloud computing services to sex toys, set off an economic development frenzy when it announced it would create or relocate 50,000 jobs in a city other than its current home of Seattle. The move came in part because the company needs access to tech talent outside the Pacific Northwest, and in part because Seattle residents were growing weary of so many techies driving up housing costs and changing the city’s crunchy, rebellious vibe.
After considering more than 200 options, Amazon announced Tuesday that it has decided to split these 50,000 jobs between New York City and Northern Virginia. (Nashville got a consolation prize of a 5,000-job fulfillment center.)
No sooner was the announcement made than progressive groups in both New York and Virginia started to complain, either about gentrification or the cost of attracting such a rich benefactor. “Extremely concerning,” is how Alexandria Ocasio-Cortez, the newly elected liberal congresswoman from New York, described the $1.85 billion in tax incentives New York ponied up.
Rather than complaining about the arrival of a rich tech giant, these communities should be patting themselves on the back. As recently as the 1990s, companies were fleeing the urban cores of major metro areas in favor of the suburbs. Now, like a reversing tide, companies are flooding back into cities.
Amazon’s decision refutes the argument that low taxes and light regulations are the primary ways to create and attract good jobs.
Virtually the entire tech sector is located in the liberal states of California and Washington. Biotech is largely a bicoastal, blue-state phenomenon. And, according to Forbes’ ongoing ranking of the world’s most innovative companies, left-leaning states dominate in a host of other industries.
What this shows — and what Amazon’s selection of New York and the D.C. area shows — is that innovative, hypergrowth companies are not looking for low-tax, low-regulation states so much as places that can either create or attract skilled work forces.
The states succeeding right now have good schools and a host of topnotch universities. They have cities with interesting urban cores and thriving arts scenes. They have good public transportation and livable neighborhoods.
Great companies want communities like this as much, if not more so, than these communities want great companies. Just look at the mixed response Amazon is getting in its new homes.