[wyattk]

Something about this just makes my stomach sick... A massive corporation is pitting governments against each other for its own gain, often to no benefit of the local population.

I'm scared to see the numbers of "incentives" that local politicians try and hand out to Amazon. There's little evidence that the public money used/lost will ever be recouped. One of the worst cases of this happening so far is the Foxconn deal in Wisconsin that will cost taxpayers around $4.5B [1], and I feel that numbers for Amazon will dwarf those Foxconn numbers.

The US is far removed from the days of trust busting [2], and keeping massive corporations (monopolies and oligopolies) and their market distorting effects in check, for the long-term benefit of the entire economy and the people. There seems to be a lot of similarities between now and the late 1800s and early 1900s. We live in a strange time. I get the feeling there will be a strong resurgence of antitrust cases and similar progressive policies. I'm curious to see where the near future takes us.

1: http://host.madison.com/wsj/news/local/govt-and-politics/mem... 2: https://en.wikipedia.org/wiki/Presidency_of_Theodore_Rooseve...

[slg]

>I'm scared to see the numbers of "incentives" that local politicians try and hand out to Amazon. There's little evidence that the public money used/lost will ever be recouped.

It is a classic example of the winner's curse[1]. If Amazon is auctioning off the HQ for tax breaks, the government that wins is likely going to overestimate the value that winning the bid will provide. Those odds greatly increase when you throw in the fact that governments have misaligned incentives. Most politicians will choose the continuation of their career over the good of the people they govern. "Winning the Amazon bid" might be enough to get a politician elected to a higher position long before any economic reprecussions are felt. You see this same scenario play out all the time when public money is used to build sports stadia.

[1] - https://en.wikipedia.org/wiki/Winner%27s_curse

[speby]

Yep, this is a common case with everyone's favorite repeat offender: Which city gets to host the Olympics?

And that has been shown, time and again, to be a huge money loser and not at all something that invigorates the economy or somehow makes a city "more legit" in the global sphere. It is, at best, symbolic and at worst, charitable [on the part of the host city].

[thrden]

While that's generally been true on a global level, the olympics have generally been profitable endeavors for American host cities. the 1984, '96 and '02 all turned a profit for host cities.[1] Further, if olympic upgrades are done responsibly the games can act as a subsidy for local improvements to mass transit, universities and other civic spaces even if the city doesn't turn a profit.

[1]https://en.wikipedia.org/wiki/Cost_of_the_Olympic_Games

[8note]

Calgary made money on the olympics; our HQ2 bid isn't shortlisted though

[conanbatt]

I agree, and this is a problem of government. Amazon is exploiting it. Good for them. The ones that have to get their act to gether are local govs.

Seattle and San Francisco already screwed it up big time. I am hopeful some city will lean heavily towards land value taxes instead of income and prop taxes, and then companies like amazon would go there naturally and economic propserity is relatively assured as rents go up.

[abhinavkulkarni]

If that's the case, then perhaps we should lay (some of the) blame on the people who would chose to 'continue' the career of the said politician, no? Lets not deny agency the people have in making informed decisions.

[sweetishfish]

With regards to your first point - it's not really costing taxpayers in Wisconsin $4.5B . At least for the tax credits portion, those are taxes that would not have been paid in Wisconsin otherwise.

[simplicio]

Kinda, but if no one offered such incentives, than Foxconn would've presumably still built its factory, and someone (maybe even Wisconsin) would've collected those taxes. So while for any particular state you can say that those taxes wouldn't have been collected, the general system of States competing for large businesses means someone somewhere won't collect taxes from Foxconn that they otherwise would've.

Plus, the taxes exist for a reason. Companies rely on public goods like roads, schools, etc for their business. So if Foxconn never came to Wisconsin, Wisconsin wouldn't have had to pay those taxes, but they also wouldn't have to pay for whatever extra public goods are consumed by the factory.

Of course, in reality, someone somewhere is going to pay for Wisconsin's schools, police, etc. So what really will happen is that Foxconn shareholders (who presumably don't, generally, live in WI) will have their share price subsidized, while other companies, or Wisconsin workers, or property holders or some combination thereof will make up the difference.

[drcode]

I guess I also don't need to pay taxes anymore, because if I don't pay taxes those are just taxes that wouldn't have been paid otherwise.

[CGamesPlay]

If you are outside of a tax jurisdiction, then yes, you shouldn't pay taxes inside that jurisdiction, because those are just taxes that wouldn't have been paid otherwise.

[ringtail]

Are you paying 5+ digits tax and in the process of moving ? Then yes you can get the same special treatment while paying fraction of what you used to pay.

[dtauzell]

They are refundable tax credits so WI could be paying money they wouldn't have.

[wfo]

It is terrifying how this power is being wielded. Cities try to compete to see who can be more obsequious and subservient to corporate interests in the hope that they win some "victory" -- the company moving to their town -- which in the end does very little for the actual city or the people in it. It is just an impressive line item on the mayor's resume when they try to move up in politics, "I got Amazon!"

Seattle hates Amazon and what it has done to the city. They provide nothing for the city, do nothing to help ameliorate the problems they create, they overcrowd every area with ultrawealthy out of towners who push actual Seattleites out of the neighborhoods they've lived in for generations, replacing local culture with bland silicon valley tech-ennui. And the jobs they offer aren't even good. They create new white-collar sweatshops in their office buildings to mirror their blue-collar sweatshops in the warehouses.

If they are paying attention, people in all of these cities should be praying to god that Amazon doesn't choose their city. If they can, they should protest, riot, refuse to let it happen.

If you want a left-wing prospective on this general issue (which is called "lotteryism") there's a great podcast that does media analysis on this and issues like it. As it turns out, for example, reporting describing the supposed 'benefits' Amazon could bring to a city are literally copied without attribution or further investigation from Amazon press releases. There is a reason Jeff Bezos bought a huge newspaper, and it's not charity.

https://soundcloud.com/citationsneeded/lotteryism-part-i-how...

[JPKab]

You act like the highly paid people you are whining about dont pay taxes. They do. You are also acting like you and the other "actual Seattleites" have an ancestral claim to the region. Are you a Native American? Doubtful. Your ancestors stole the land and now you act like your entitled to say who gets to live there?

What a hypocritical, provincial attitude to have. And honestly, greedy as well.

My family came to this country in the 1600s. If I had your attitude, I would hate everyone. But I'm not entitled enough to think that my earlier arrival means I earned privileges.

Welcome to America, where effort and talent win over "I was here first"

[biocomputation]

<< Welcome to America, where effort and talent win over "I was here first"

This is an utterly vacuous and false statement. There are mountains of empirical evidence to prove it if you could spend a few minutes in your favorite search engine.

It's not greedy to protect the area you're from; it's human nature. I'm sorry, but Amazon's tens of thousands of out-of-town employees don't need to live in Seattle. Most of them could work remotely or find jobs at other companies.

[OrwellianChild]

Just to make sure it's clear that this is not a universal opinion:

I am a non-Amazon Seattle resident, and I'm thrilled with what the economic growth has done to the area. Some examples:

- Converted an un-safe warehouse district into prime, central real estate and a thriving neighborhood (South Lake Union)

- Grown a progressive, thriving economy that has in turn supported development of mass transit (ST2, ST3 - citywide light rail)

- Pushed the median household income up 13% over the last decade

Seattle ain't perfect, but there is no question in my mind that we'd be worse off without the thriving local tech economy.

[wfo]

>Converted an un-safe warehouse district into prime, central real estate and a thriving neighborhood (South Lake Union)

SLU was not un-safe. The idea that there is a seriously unsafe neighborhood in the city of Seattle is laughable. I remember SLU before Amazon. It has become extremely expensive and gentrified, that's it.

>Grown a progressive, thriving economy that has in turn supported development of mass transit (ST2, ST3 - citywide light rail)

Has massively inflated the population with wealthy transplants over a short period of time, pushing non-tech workers into the suburbs and requiring the citizens to pay for the added infrastructure costs due to Amazon-caused overcrowding without chipping in to help the city.

>Pushed the median household income up 13% over the last decade

You don't actually believe this is due to Amazon? I'm sure they helped a little.. mostly by pushing the poors out...

>Seattle ain't perfect, but there is no question in my mind that we'd be worse off without the thriving local tech economy.

Agreed, and Seattle has always been home to a thriving tech sector which is great. But other companies behave better with respect to their local community. Microsoft set up shop across the water, with a big campus so that employees could head into Seattle but didn't invade it and has adopted the culture of the area fairly well. Employees are treated well.

[closeparen]

TIL software engineers aren’t actual residents of the places we live.

[wfo]

Are you a software engineer in one of these cities struggling to find a job?

Would you take one at Amazon, knowing that it's one of the worst software jobs out there because of horrible working conditions?

Would you last significantly longer than the average 1 year turnover rate at Amazon?

If you said yes to all these questions, your response makes sense. Congratulations, you are the .25% of the population that my argument doesn't apply to and I'll gladly note you as an exception and admit my argument was a generalization, though a reasonable one.

edit: It's also worth noting that I don't blame Amazonian transplants to Seattle themselves, I find them wholly sympathetic and I think it's sad these people are blamed for the state of affairs: rather, the company, that draws so many from outside, makes no effort to acclimate them to local culture, works them to the bone so they have no time to do so themselves, and provides nothing for the city to aid in the overcrowding, traffic, and housing crises they have created is to blame.

[BookmarkSaver]

>Would you take one at Amazon, knowing that it's one of the worst software jobs out there because of horrible working conditions?

Source? It is consistently ranked as one of the better places for software engineers to work, despite NYT hit pieces.

>Would you last significantly longer than the average 1 year turnover rate at Amazon?

Amazon's turnover is almost indistinguishable from Google's. It's an industry issue (at the highest tier, at least), not an Amazon one.

[wfo]

> It is consistently ranked as one of the better places for software engineers to work

Where? By whom? I looked for a while and I couldn't find a single source to suggest this. There are plenty of lists of good software workplaces, Amazon shows up on none of them.

People like working there because it is a great resume-booster. Work a couple years at Amazon, kill yourself for work, then move on to a real company with that on your CV.

>despite NYT hit pieces

Or as everyone else in the world knows it, "accurate reporting".

Here's a quote from an article from an employee that I think captures it: “Amazon is a culture of self-driven workaholics”

If you join the cult and agree it's a good idea to work yourself to death, it's a good place to do that. It's not a good place to go if you want to be a Seattleite, participate in a community or have a life at the same time.

[BookmarkSaver]

>Where? By whom?

LinkedIn, for one.

>Here's a quote from an article from an employee that I think captures it: “Amazon is a culture of self-driven workaholics”

You are quoting a subjective statement from an article, in support of the article's veracity? That makes absolutely no sense.

Amazon employs tens of thousands of people. Hundreds of thousands have worked there over the past 20 years. The NYT article was a collection of anecdotes.

"Accurate reporting"? Lol, I for one am shocked that out of the hundreds of thousands of current and former employees they were able to find a handful that had bad experiences. I mean, what are the odds? Amazon must be the worst.

"Accurate reporting"? From what I remember, not a single individual references worked in software development, they were exclusively in marketing and bureaucratic levels.

>If you join the cult and agree it's a good idea to work yourself to death, it's a good place to do that

Again, based on a few anecdotes you've reached the conclusion that it is a cult? It's really obvious that you've decided Amazon is evil a priori, and are using circular logic to rationalize this, because your evidence so far is anecdotal (from an article based on anecdotes).

>It's not a good place to go if you want to be a Seattleite, participate in a community or have a life at the same time.

I work 40 hours a week, average. So does nearly every engineer I know here. I love Seattle and my work-life balance is awesome.

[biocomputation]

TIL software engineers think it's okay to participate in the economic and social destruction of neighborhoods in which people have lived for decades.

[closeparen]

Young adults necessarily occupy space in a way that hasn’t yet been legitimized by the passage of much time. Populations that need to work for a living must go where there is work. Many of the consequences of this set of facts are dire and inhumane, and responsible public policy manages their impacts as best it can. A world with no new households is one that has stopped reproducing. A world where people are confined to their economically depressed birth cities is another kind of dystopian hellhole.

Half of this wouldn’t even matter if we let housing become a positive-sum game.

[biocomputation]

You could always refuse to participate in the social and economic destruction of communities by simply not working at places that have a disproportionate impact on the surrounding community.

Yes, it's that easy!

<< A world where people are forced to leave their community of origin because rich tech workers can outbid them for housing is another kind of dystopian hellhole.

Fixed that for you.

[closeparen]

The size of your employer has nothing to do with your contribution to housing demand. A million employees of two-person startups have the same effect as a million Googlers, assuming similar budgets.

[JPKab]

TIL that people own the neighborhoods they live in by virtue of being there first, without any form of payment, deed, title, or record of ownership.

I should point out that the arguments against gentrification are identical to the arguments white ethnic urban neighborhoods made against blacks moving into their neighborhoods in the mid 20th century.

"They are ruining the character of our city! We were here first!"

Losers.

[biocomputation]

Gentrification disproportionately affects communities of color. This is quite exactly what's happening in Seattle.

<< TIL that people own the neighborhoods they live in by virtue of being there first, without any form of payment, deed, title, or record of ownership.

I hear this argument a lot and it's really like saying "only people who own property should be allowed to vote". You're saying that only property owners belong in the community.

That's just sad and wrong - not to mention racist in the context of this discussion - and it truly exemplifies the attitude that myself and many other natives are pushing back against.

This attitude, which I see in so many tech workers, is why Amazon has gotten such a cold reception from many people in Seattle.

[JPKab]

No, I'm saying that nobody is entitled to anything. I love how you bring up the race card.

Please explain to me the system of who gets to suddenly stop a city from changing, and when? Your attitude is based on emotion and illogic. So if I'm talking about South Boston, where it is white Irish Americans being booted out by a much more racially diverse professional class, am I bigoted against whites?

Again, you have an emotional argument and nothing else. Take that same argument, apply it at a national level, and you are in anti immigration territory. If Trump ran for mayor of Seattle and said he'd build a wall to keep newcomers out, it would help your agenda.

[closeparen]

It’s a cycle. Tenants need more rights => the economics for landlords are less attractive => the supply of rental housing dwindles => tenants need more rights.

Rearranging the deck chairs can only get us so far in the face of scarcity. The experiment in a distributed and suburban country is over. The population is urbanizing, as it has throughout human history. Whether it wants to or not, that's where jobs are going. That presssure will always show up in some form or another unless the housing supply grows to meet it.

Whether it’s the market or the government, someone needed to be building on a massive scale, yesterday. That’s not incompatible with protecting long term renters, but when we make it less lucrative to build we must also give more of a push to build anyway.

[deadmetheny]

If you've been on HN for any extended period of time, this should not come as a surprise to you.

[biocomputation]

Sadly, it's not!

[biocomputation]

Thanks for posting this. I remain horrified at the changes that Amazon has pushed on Seattle.

[gist]

> often to no benefit of the local population

Not true. My first thought when hearing that a town not far from where I am made the 20 list was 'where can I buy property so that I can rent it to others that come as a result of the economic development and new desirability of the area'. Property values will increase and property tax will go up vacancies will be reduced.

This would not happen for a smaller company that nobody cares about either.

This is perhaps similar (not for sure but could be) to when Disney decided to locate in Orlando Florida and bought up land in secret but also cut many deals to allow them benefits that others do not get.

https://en.wikipedia.org/wiki/Reedy_Creek_Improvement_Distri...

[wyattk]

No net benefit of the local population. I forgot to include that one word, net. I admit it does make a difference, but perhaps not to the point where people will fixate on that and ignore everything else.

I understand what you are saying, but these things can be quantified and accounted for in economic models. We can wave hands all day about "I think the economy would do this" but that is often the enemy of applied economics (heavily mathematical) and progress. There is a point when the incentives for the company can turn negative for the community. There is also the consideration in the community that those taxpayers (and voters) do not want to subsidize a massive corporation's shareholders.

Politicians can be aware of this point, but with a massive corporation trying to pit them all against each other for its own gain, competition will erode those profits to or even past the point of neutral cost-benefit to the community. As Peter Thiel likes to point out "Competition is for losers."

[gist]

I am aware of what you are saying. However living in a place that is 'moving and grooving' because there is economic activity has benefits that simply can't be measured. For example you can live in a nowhere ghost town with little restaurants and nobody around and think you have it great. But just the same people with any ambition will move out of that area and leave it even more isolated. Empty main street.

If you try to quantify you will often come up short. And w/o knowing the exact numbers who knows. But much of it is for tax (credits) which they wouldn't get anyway. The places in many areas that are being offered have been vacant for years. So we are not talking about Manhattan when you look at Navy Yard in Philly. It has land because nobody wants that land. And it could take forever to get it occupied.

Economic activity where there is little currently and no prospects is all around good. In the case of where I live (within 20 miles of one of the sites) I am thinking 'wow if they locate there people will end up buying used houses where I am and property values will increase and then people will spend money and they will build more restaurants and things will all around be good. So maybe I will stay in this area and not move in that case'.

By the way Amazon has not invented this process. It's currently being done where counties compete against other counties for lesser known prizes. Very common you just never hear about it. In many cases the company moving has no intention of moving either. Welcome to the world of business and how it works.

[dudul]

Why do you think that it will be to no benefit of the local population? I'm uncomfortable with this process too, but isn't it gonna be great for the city that gets chosen?

[varroa]

One can imagine if the bid process is sufficiently competitive & transparent, if HQ2 brings $10b in economic good, cities might bid eachother down asymptotically to offer $10b in incentives, which in net would result in nearly zero economic good for the winning city or the parent country, and transfer all that value to Amazon & it's shareholders.

There's also the concern that negative impacts are being ignored, such as increased demand on infrastructure, ala the Olympics, wherein by most accounts the winning city actually winds up economically worse-off.

[xyzzy_plugh]

I think this sort of thing results in a net loss for the public. Politicians love talking about creating jobs, but not about at what cost. Whatever city wins will be handing out subsidies and tax breaks to the point where only Amazon shareholders benefit.

[noetic_techy]

50,000 new non-McJobs as well as the follow on service jobs is no benefit to the local population? Tell that to all the non-silicon valley mini-tech hubs like Austin, Seattle, Miami, Dallas, etc. If amazons foothold is the seed for a new techhub to emerge, that's a true net boon for that city and its people / culture.

[shrimpx]

It's beneficial in an overall sense, but it sucks for the many individuals and families who will be gentrified out of the city, because they don't have the skill/background/age/race/gender to partake in the new orgy.

[OrwellianChild]

When attempting to counter an un-alloyed good like "50k new high-paid jobs" with potential negatives, can you please be clearer about the alternative outcome you desire? I can't tell from your objection whether you:

1) Support the 50k jobs, but want extra effort to be taken to support existing populations/communities

2) Prohibit the 50k jobs so things can stay the same

3) Let the 50k jobs go elsewhere so they're not a local problem

4) Something else entirely that I'm missing

[biocomputation]

<< skill/background/age/race/gender to partake in the new orgy.

The word for that is injustice.

[jimmywanger]

> often to no benefit of the local population.

Considering they'll be hiring a lot of locals, and property values will most likely rise, and the associated peripheral startups will start flourishing due to Amazon expats, I don't see what your point is.

It's not like they're building a NFL stadium, which is almost always a huge boondoggle. Would you rather have Amazon HQ, a football stadium, or watch your city fade into irrelevance?

[JKCalhoun]

> Something about this just makes my stomach sick...

Ditto. I just don't know what you can do about it though short of some sort of federal law that makes it illegal.