The Problem With Amazon

Over the past year, Amazon CEO Jeff Bezos has been planning to build a second headquarters in a domestic city in the U.S. This building will be dubbed HQ2 and comes at an interesting time. Large corporations are trying to take advantage of the lower taxes and regulations under the current administration, and Amazon is one of, if not the fastest growing American companies. E-commerce has exploded in the last decade, putting traditional malls and retailers on life support. Noticeably, the long standing toy company Toys R’ Us recently went out of business, and I would venture to guess that had something to do with online retailers. Now, e-commerce in general should not be shied away from, but there are some concerning developments with the company of Amazon, specifically this bidding process.

Many have hailed it as a great example of corporate-civic engagement, and while investments in infrastructure and jobs are always welcome, the circumstances surrounding the bid have left many like myself concerned that Amazon is overstepping its bounds. The way the process works is the executive branch (typically the mayor’s office) of a city’s municipal government makes an offer to Amazon that they will fulfill when Bezos officially agrees to construct HQ2 in that city. Almost every large city in the United States is participating, including Philadelphia. The bids some of the cities have put forth are to say the least, extraordinary. Newark, New Jersey put forth a bid for $7 billion in tax incentives over the next decade. New York City and Philadelphia offer huge construction plans. The Mayor of New York City made the claim that the building should be in NYC because the city is the center of world commerce.  One of the most ambitious bids came from Dallas, Texas where in addition to a construction plan, the bid will include a $15 billion bullet train system with a station on the HQ2 site.

Now, my issue with these bids is that they are overblown for what the cities will be getting. While amazon touts that HQ2 will bring 50k new jobs to the city, this number probably includes a large number of temporary construction workers, and is most likely inflated. There are a lot of risks to winning this bid, and any potential fallout would have severe economic impact on the people living in that city, similar to what happens to cities that host the olympics. Additionally, while Amazon has prospered significantly, and Jeff Bezos is now the world’s first centibillionaire, there have been widespread reports of amazon workers not making enough money to live without government assistance and horror stories about warehouse conditions. I think we need to seriously reevaluate the support we give to Amazon as a country, and we need to hold companies like this accountable for their moral failures.

Sources: Forbes; TIME