December 14, 2018

Breakingviews: Amazon HQ2 meets NIMBY 2.0

by Breakingviews.

Every new arrival in New York City has a story to tell, whether it’s a sidewalk mugging or a fleecing by apartment brokers. Amazon is getting a bit of both. One month after picking New York for half of its second headquarters, the $810 billion e-commerce giant is already getting bashed by local politicians and unions.

Jeff Bezos’s firm stands to get as much as $3 billion in tax credits and grants for building its facility in the city. Most of those are offered under existing state and city programs and require the firm to meet or exceed its planned hiring of 25,000 workers. Yet many City Council members are fuming. At a hearing on Wednesday, they demanded to know why one of the world’s most-valuable companies needed such largesse.

Unlike Apple, which simply announced a $1 billion investment in a new Texas campus on Thursday, Amazon made itself a target with its year-long beauty contest for the so-called HQ2. Besides, the company has tended to get its way. Bezos was attracted to Seattle by Washington state’s low tax rates, and for years the company avoided collecting sales tax in states where it had no physical presence. In June Amazon successfully lobbied to nix the city’s plan for a homelessness tax. Three months later Bezos said he would donate $2 billion to combat destitution and build schools.

Fortunately the enmity toward Amazon in New York is the kind that can be soothed with money, and the company has plenty. Its annual earnings are expected to double in two years, to a little over $20 billion. Giving back some or even all of its tax perks would help. It might also hand a symbolic victory to local politicians angry because they had no say in a deal negotiated by Mayor Bill de Blasio and state Governor Andrew Cuomo.

As Amazon’s scale grows, so will the cost of buying off opposition – simply because everyone knows the company can afford it. Bezos raised Amazon’s minimum wage in the United States to $15 an hour last month. Workers from Staten Island to Portugal have protested publicly about working conditions. As New York’s unofficial poet laureate Lou Reed said: “Little Joe never once gave it away, everybody had to pay and pay.”

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