With places like Ulster County happy to add one job at a time in building a more prosperous, forward-looking labor force, the remaining 20 urban competitors for Amazon’s second world corporate headquarters (HQ2) are playing an entirely different game. At stake is a five-billion-dollar project in which the fast-growing tech giant is likely to create up to 50,000 direct jobs with average annual total compensation per job exceeding $100,000.
The indirect economic impact of HQ2 will be enormous. Amazon says it will announce its final site selection this year.
Even accumulated over time and in a state the size of New York, 50,000 good jobs affords a huge economic boost. As of December 2017, there were 63,600 non-farm jobs in Ulster County.
Amazon HQ2 involves the highest stakes in the 2018 site-selection derby. Metropolitan areas and the states they’re in are competing fiercely to persuade Amazon of their suitability. The narrowing of the field from 238 cities to 20 eliminated the three upstate New York competitors (Buffalo-Rochester, Syracuse-Utica and the Capital Region), forcing governor Andrew Cuomo, known for his metaphorically professed equal love for all his geographic children, to focus New York State’s efforts on the single downstate Amazon application.
In its initial application, New York City didn’t offer greater tax breaks to Amazon than the incentives it offered others. “We win it based on the talent of our workers and the incredible diversity of industries in this town,” New York City mayor Bill de Blasio said in October. “These are the strengths you can’t buy with tax breaks.”
It is hard to imagine the famously competitive Cuomo being unwilling to sweeten the pot further. In New Jersey’s application, governor Chris Christie offered seven billion dollars in subsidies and incentives to get HQ2 to locate in Newark. Surviving the cut, Newark is still in the running.
New York City is offering Amazon a choice among four locations: Hudson Yards on the West Side of Manhattan, a downtown site at the World Trade Center, Long Island City in nearby Queens, and Brooklyn’s Tech Triangle (Dumbo, downtown Brooklyn and the Navy yards). State involvement may add sites on Long Island and the Hudson Valley.
Ten of the continent’s most populous metro areas, including New York, Los Angeles, Chicago, Dallas, Washington, Toronto. Philadelphia, Miami, Boston and Atlanta, made the break into the list of 20 cities still in the running for HQ2. Three contiguous smaller areas, Newark next to New York City, and Montgomery County and northern Virginia next to Washington, D.C. were also on the list.
Denver has about the same population as Seattle, If some of the metro areas on the list are more populous than Amazon’s HQ1 hometown, others are smaller. The other six surviving contenders are lower in population but still considerable in assets: Pittsburgh, Columbus, Austin, Indianapolis, Nashville and Raleigh.
Amazon’s RFP (Request For Proposals) was broad and open-ended, written to sound like the huge and innovative enterprise was willing to be persuaded of the virtues of contenders for its presence. There’s little way of knowing whether the weight of the various factors in the RFP are now the same as the ones employed getting to this point. Site-location and infrastructure offerings could now become more important considerations. Or not. Ditto for geography, depth of human skills, capacity for long-term growth and sustainability.
Wanna make a deal? “Amazon welcomes the opportunity to engage with you in the creation of an incentive package, real-estate opportunities and cost structure to encourage the company’s location of the project in your state/province,” the RFP concludes. Amazon may select one or more proposals and negotiate with the parties submitting such proposals before making an award decision, or it may select no proposals and enter into no agreement.
Amazon, which has been expanding very rapidly, announced last October that it had 542,000 employees. (Ten years ago it had 20,000.) Of the new total, some 40,000 work in its hometown headquarters city of Seattle.
The company’s warehouses and distribution centers throughout the world are not known for their high wages. HQ1 and HQ2, the knowledge hubs of the Amazon empire, will employ the bulk of the company’s high-paying administrative, technical and professional workers. Amazon is making its contribution to the growing economic inequality between the high-paying largest metropolitan areas and the rest of America.
If you Google “Nomadland,” a recent searingly critical description of work in an Amazon warehouse in Texas by writer Jess Bruder, you’ll find in first position an offer of the book new for $17.67 and used for $16.50 from — guess where — Amazon.
Amazon is not unfamiliar with New York City. Its website, which advertises 17,000 positions worldwide, is currently seeking 298 full-time and four part-time Gotham workers (among them 73 software developers, 65 solutions architects, 55 sales, advertising and account managers, 26 people in business development, and twelve technical managers). As of this time, Amazon has about 1800 Big Apple employees.
In September it committed to a 359,000-square-foot Manhattan lease where it expects to hire 2000 workers for its advertising staff and to get $20 million in state tax credits. “We’re excited to expand our presence in New York. We have always found great talent here,” Paul Kotas, Amazon’s senior vice president of worldwide advertising, told CNBC.
Amazon is the second-largest American company behind Walmart in terms of number of employees. There are 20 Amazon-owned Whole Foods markets in New York State and at least one more in development. Amazon expects to have 2250 employees at a fulfillment center it has leased on Staten Island. Amazon also has a fashion studio in Brooklyn and two bookstores in Manhattan.
The company has promised to create 6000 new jobs in New York State by next year.
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