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AOC Was Right About Amazon's HQ2
Her critics have it all wrong.
Ever since Amazon backed out of putting part of its second headquarters in Queens, New York, a bunch of dudes (and it’s almost always literally dudes) have been blaming Democratic Rep. Alexandria Ocasio-Cortez for the deal’s demise. The latest is very rich Republican donor Stephen Ross (yes, the Trump-loving Equinox guy):
Q: Was that a mistake when AOC and her supporters, I guess, essentially made the case that Amazon wasn’t going to put its second headquarters here?
ROSS: Tremendously. I mean, who is she really representing? Herself, I think, and her own agenda and her popularity. She’s become, in a very short time, a very powerful person. I think she’s taking us in totally the wrong direction. I think if you ask the people in Queens and New York City, you know, her being against Amazon was probably something that was very detrimental to them and the city. But she wants to be out there, she wants to be up front to take us in a direction that I don’t think America, you know, is ready for or ever will be.
This line of criticism is always dosed with sexism. An entire community of activists and local lawmakers organized against the deal to bring Amazon’s HQ2, as it’s known, to Queens. At least a couple of presidential candidates were also opposed.
All of that gets erased, though, in favor of blaming HQ2’s collapse on the young woman of color who doesn’t even represent the district where the headquarters would have been. She gets labeled a “villain” and portrayed as a self-serving media-monger.
But to be clear, on the merits, AOC and the other HQ2 detractors were right then and are still right today.
To review, Amazon initiated a nation-wide auction in which America’s governors, mayors, and state legislators embarrassed themselves by pledging to throw gobs of money and other stuff at a huge corporation for the promise of some new tech jobs. Many cities, to this day, won’t disclose what they offered CEO Jeff Bezos and co.
After a year-long reality television show-style contest, Amazon decided to split HQ2 between the New York City and Washington, D.C., metro areas, two places that are very much in its interest to have a major presence, with or without subsidies.
But subsidies it would receive, anyway: $3 billion in New York and another roughly $775 million in Virginia.
On a grand scale, New York and every other city never should have played Amazon’s game. Cities shouldn’t be competing on who can toss the most money at a big corporation in the hopes that some benefits trickle down; they should be competing on having the best schools, infrastructure, and quality of life for workers. Criticizing the very existence of this state-versus-state-versus-city competition is spot on.
And then there are the details of the HQ2 package, specifically. A constant nitpick thrown at AOC is that it’s unfair to cite $3 billion as taxpayer money out the door, which could have instead paid for education and subways and whatnot, because some portion of that money would only have been granted if HQ2 actually created new jobs.
That critique is misguided in a couple of ways.
First, it yadda yaddas past the half a billion dollars that would have been spent on infrastructure and reimbursing Amazon for capital costs. That’s quite literally $500 million to Amazon’s benefit that could have been spent on anything else.
More importantly, Amazon’s backers act as if all the promises Amazon made about future jobs and economic growth in the area were ironclad and absolute, and would inevitably benefit local workers.
However, some portion of the jobs created would have gone to workers at other companies, meaning they were just shuffled around, or to existing Amazon employees who relocated. Some portion of the money generated would leak out of the community back to Amazon’s headquarters or Jeff Bezos’ tax haven.
Plus, a willingness to subsidize Amazon means a willingness to forego at least some amount of future revenue for those jobs specifically, compared to other jobs at other companies that have to pay full freight. That gives a competitive edge to Amazon over other local businesses, and means some of the jobs created would be offset by job losses elsewhere as competitors go under or expand more slowly.
Proponents of New York’s HQ2 deal act like it was a proposition without downsides. But as Northern Virginia is making clear, that isn’t true. In the D.C. suburbs where Amazon is headed, home prices have skyrocketed, meaning thousands of families are set to be displaced. Amazon is making the area’s home affordability crisis demonstrably worse, and no one is set to do anything real about it.
When Ocasio-Cortez criticized the effect HQ2 might have on surrounding neighborhoods, it’s exactly this sort of blunt force gentrification she presumably had in mind. And future revenue that would have come from those jobs, but instead was forgone due to tax breaks, can’t be spent mitigating those negative effects.
But the most damning bit of evidence in AOC’s favor is the simple fact that, despite losing out on the oodles of tax breaks that would have come along with HQ2, Amazon is looking to expand in New York City anyway. There are constant headlines to that effect. It’s simply not necessary to subsidize Amazon in the Big Apple. It wants to be there for good business reasons.
Yes, I know those proposed expansions are not in the same location where HQ2 would have been, but, as explained, there’s no guarantee future Amazon workers would have come from there either or that the money would have stayed in that part of the city.
The issue here isn’t just whether Amazon would bring benefits to New York City: It’s who those benefits would, well, benefit, and who has to deal with the negative effects of a major corporation reshaping the local economy. It’s about building a community that is attractive not just to CEOs and corporate boards, but workers and their families. It’s about making investments in broad-based economic growth, not one specific company that can break promises, change plans, or push residents out by making their communities too expensive to live in if you don’t make a six-figure tech salary.
So the sexist response to AOC’s case against Amazon isn’t just sexist. It’s wrong. Now if only Northern Virginia would come to the same conclusion.
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