How Amazon can counter Trump
Forget the HQ2 list, transform a needy city
In one of the biggest public relations moves of this century, Amazon has set municipal hearts aflutter as communities compete for a new $5 billion headquarters and the promise of 50,000 high-paying jobs. Twenty cities are finalists, but my advice — my plea — to Amazon CEO Jeff Bezos is this: Throw the list of finalists away and plant your
HQ2 flag in a community that truly needs the economic transformation you are uniquely positioned to provide.
In short, make history. And maybe win back some hearts, minds and stock price in the face of President Trump’s Twitter offensive against the company.
Let’s face it. Nineteen of the 20 finalists are doing just fine, thank you, compared to everywhere else in the country. Austin, Atlanta, Boston, Chicago, Columbus, Ohio, Dallas, Denver, Indianapolis, Los Angeles, Montgomery County, Md., Miami, Nashville, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, N.C., Washington, D.C., and Toronto, Canada.
Twelve of these cities are in metropolitan areas that have unemployment rates at or below the 2018 national average. Fifteen enjoy median household incomes above the 2016 national average of $57,617. Only one can arguably be called average — and that’s the Pittsburgh area, with 5.4% unemployment and median household income of
$56,063. The Pittsburgh population is hardly suffering.
But there is one finalist worth highlighting: the city of Newark. It has a 12% unemployment rate (double its metro area, which includes New York); median household income of only $31,100; and nearly a third of residents living in poverty. So Newark would appear to be a worthy candidate.
But the insidious nature of the Bezos bidding war ruins this assumption. The reason: Newark and New Jersey are offering $7 billion in state and local tax incentives in their bid to be selected for Amazon’s $5 billion headquarters. Why don’t they just give $7 billion to all men, women and children living in poverty in Newark? That would be a payment of $92,099.20 — each. This would instantly eradicate poverty in Newark.
Of course, no politician would dare propose such a plan. But lawmakers in the Trenton statehouse are happy to let the state with the third highest taxes in the nation give $7 billion of taxpayer money to Amazon.
This show must stop. Amazon controls one of the largest databases on Earth; it doesn’t need cities to spend millions on creating their proposals. Last September, boosters of Tucson dug up a giant cactus and tried to give it to Amazon. Amazon declined the gift, but it may not decline the other goodies on offer — gifts that residents of the “winning” city will pay for one way or another.
Local taxpayers will deal with massive new traffic generated by 50,000 new families moving to town. Property taxes will skyrocket as local governments try to handle demands for new roads, sewage systems, schools and hospitals. All this will be in addition to the cost of whatever tax incentives Amazon receives. If you’re a renter, look at rents in Seattle or Silicon Valley to see what’s in store for you.
Jeff, you have an opportunity to do something unprecedented, something remarkable. Don’t demand tribute from the nation’s most prosperous cities. Instead, make a real difference. Build your new headquarters in a place where folks can genuinely benefit from what you have to offer.
Go to West Virginia. Go to Kentucky. Go to Alabama. Go to Mississippi. How about Detroit? You don’t need to limit your choices to cities that have a pool of ready workers or an international airport — two criteria on your list. You’re a real Field of Dreams: If you build it, people will come. Workers will flock to wherever you go.
And if you decide to select Newark — great. Just don’t demand that the city and state pay you $7 billion for the privilege. You don’t need the money. You’re worth over $100 billion already.
What you do need, Jeff, is to do something wonderful. Make a difference. This is a one-time opportunity. Don’t blow it.