The victory of activists and local politicians in beating back one of Amazon’s two “HQ2” headquarters, which was supposed to be built in Long Island City, Queens, has opened up a new rift in the already fractured political establishment in New York State. In an interview last week, Democratic Governor Andrew Cuomo spoke out on the issue for the first time since his office released a statement of regret after Amazon announced its decision to abandon the plan. Cuomo, whose administration had promised the industrial giant three billion dollars in subsidies from state coffers, had routinely equated the estimated 25,000 jobs that would be on offer at the non-unionized corporation’s new campus to a government jobs program.
“What happened is the greatest tragedy I have seen since I have been in government,” he said in an interview with WAMC. His anger, however, was almost uniformly directed towards members of his own party, specifically to Senate Democrats who had helped mobilize opposition to the deal. “Many of them are new to government,” he said. “They are making the transition from understanding politics to government.”
It was characteristic of the governor’s singular response to the controversy surrounding the deal that he blamed lawmakers for, he said, improperly framing the issue as one of local concern, as opposed to one of statewide significance. The new campus, he would say while still basking in the glow of Amazon’s initial decision, would generate tens of billions of dollars in tax revenue over the course of the next thirty years. The concerns of current Long Island City residents were, it seemed, immaterial compared to these sweet-sounding results.
Among the many problems that residents foresaw as following on the heels of the new headquarters was a further increase in the cost of housing, in a city already beset by rapidly increasing costs. Local activists also pointed to gentrification and increased stress on city infrastructure and traffic as other likely downsides to the construction of new corporate campus in the neighborhood. A coalition of community organizers was early on the wave of pushback, sending a letter to New York City mayor Bill de Blasio urging him to prevent the city from handing over subsidies to Amazon in order to aid its massive plans.
In their attempts to generate as much public support as possible, Amazon and its supporters in the New York political establishment hammered home the figure of 25,000 jobs paying an average of 150,000 dollars. News outlets across the board likewise picked up on this figure and hammered it home without criticism. In an op-ed for Al Jazeera, author Larry Beinhart rightly demonstrated that, at a company like Amazon with a tier of ridiculously high-paying executive positions and a sea of poorly paid warehouse jobs, the idea of an average salary can be deliberately misleading. The majority of Amazon workers make just over 28,000 dollars a year. Even if Amazon intended to stick to its promised average, says Beinhart, the ultimate median salary of employees would be much more indicative of the reality of the situation.
Like Cuomo, Amazon blamed local and state politicians for the decision to abandon its plans for a new corporate headquarters. Having framed its project as a gift to the city of New York, the company sought to steer public ire towards left wing politicians for opposing it. “For Amazon, the decision to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term,” it wrote in its statement.
The controversy and Cuomo’s continued kowtowing to Amazon come in the midst of the news that the trillion-dollar company will pay a total of zero dollars in federal taxes for 2018, despite having earned more than 232 billion dollars in revenue. Perhaps unsurprisingly, 2018 will be the second tax-free year in a row for the company. Think of that: each of Amazon’s warehouse workers, who make up the majority of the company’s employees and generally make less than 30,000 dollars a year for fulltime work, will pay more to the IRS than the company they work for.
Despite this, Republicans and Democrats alike seem much more concerned with the audacity of a grassroots resistance movement in New York City than with curtailing the self-evident insanity of a tax code that promotes this kind of corporate swindling. The only real support has come from the left-most edge of the Democratic party and a handful of politicians who recognize the pushback from their constituencies. According to Steve Rattner, a former advisor to President Obama, Alexandria Ocasio-Cortez’s statement of solidarity with local resistance to Amazon was “the most economically ignorant statement” he had ever read. The above context for such outrage, however, begs the question of how seriously we should take the economic sophistication of people who have helped to encourage the current atmosphere of corporate free-for-all.
After all, Amazon is simply taking advantage of the deliberately lax rules written in Congress and reinforced by administration after administration. “I get the frustration out there, but it’s not like they’re doing anything illegal,” said Brian Yarbrough, a senior analyst at Edward Jones. “It’s how the tax law works.”
At the helm of all this is Amazon’s founder and CEO Jeff Bezos, otherwise known as the world’s richest person, who has at the same time found himself at the center of a scandal involving his mistress and threats from the National Enquirer to release less-than-flattering private photos of the multi-billionaire. While pundits and commentators affiliated with both major parties have been busily defending Mr. Bezos’s right to privacy, and in doing so weirdly equating the story to the secretive and invasive practices of the NSA and other federal agencies, it would perhaps be productive to remember the much more meaningful and material story playing out in New York, and the larger crisis of corporate excess and abuse of which it is a symptom.