Facebook's Data Center Fluff
A snazzy new public relations push can't cover up the truth.
This is Boondoggle, the newsletter about corporations ripping off our states and cities. If you’re not currently a subscriber, please click the green button below to sign up. Thanks!
Facebook last week rolled out a new website dedicated to the awesomeness of its data centers, the large facilities it builds to house all the data it collects from you, me, and everyone else it surveils on the internet.
I’m not kidding. Facebook built and published an entire website extolling the virtues of its data centers on local economies.
It has pages explaining the supposed positive economic impact the centers create and detailing the public programs Facebook runs in areas around data centers. The rollout earned Facebook a nice puff piece in the data center trade press, which is something that actually exists.
There’s even a frequently asked questions section, with Facebook explaining how it chooses where to locate its data centers. Missing, of course: Any discussion whatsoever that Facebook’s data centers are subsidized by taxpayers to the tune of hundreds of millions of dollars.
And that’s by design: Facebook and other tech corporations such as Amazon and Google are facing increasing scrutiny over their data centers, on everything from the subsidies that taxpayers plow into them to the natural resources they hoover up and the labor they exploit. Facebook’s site is the first salvo in the public relations pushback.
So here are the facts about Facebook and data centers that were left out: Facebook has received $785,491,326 in disclosed state and local subsidies, the vast bulk of which has been for its data centers. That includes a $355 million deal with Georgia, and $150 million packages from Utah and Texas. It’s currently planning an expansion in Oregon, where it’s already received $41 million and will surely be eligible for more under that state’s lucrative data center subsidy program.
These data centers are strategically located near power sources, customers, and infrastructure such as highways, as well as where there is less of a chance they’ll be knocked offline by a natural disaster such as an earthquake. So the case that they need to be subsidized at all is pretty weak; locales are probably “incentivizing” activity that was likely to happen anyway, particularly in a place like Oregon or Illinois where there is already a concentration of data centers.
But even if that weren't the case, it’s unclear states and cities paying for these centers are buying much worth having. Data centers create very few jobs — somewhere around 30-50 per facility — and many of those jobs are low-pay, no-benefit positions or are contracted out to problematic employers. Yes, there’s a short-term construction jolt associated with them, but the point of economic development policy isn’t to rent some jobs for a few months, it’s to build sustainable economic activity.
Data centers also put a strain on local resources. For example, there was local opposition to a Facebook data center in Mesa, Arizona, given the center’s considerable water needs in an area experiencing a drought. Data centers also use massive amounts of power, which can ultimately cause costs to rise for others in the community if Facebook doesn’t pay adequate rates, which is a concern around one Facebook data center in New Mexico.
There’s also the simple fact that subsidizing data centers disadvantages smaller firms that may want to try to challenge larger corporations online, since the state is paying for the dominant players’ necessary infrastructure. Every dollar that goes into a data center subsidy is one less that can be spent on broader public services or supporting smaller businesses and entrepreneurs.
Finally, there’s the insult that much of this is done under cover of secrecy. Here’s just one example, as Forbes recently reported: “In one 2018 agreement with a small coalition of counties outside of Atlanta, Facebook negotiated a $71 million tax abatement package in exchange for a project that would generate 100 permanent jobs, according to documents provided to Forbes. Only after the incentives had been secured did Facebook announce itself publicly.”
So Facebook is now trying to burnish its image, insisting that secretive, resource-draining projects that taxpayers sink huge sums into are actually great for local communities.
This is very much like another tactic I covered: Big tech corporations making a show of “investing” in affordable housing initiatives — and earning lots of glowing press for doing so — despite those “donations” coming nowhere close to the amount the corporations receive from taxpayers, and also not providing enough actual housing to offset their effects on local real estate and rental markets.
Why is Facebook doing this right at this second though? It certainly seems to me like all the scrutiny they’re facing is getting to Facebook’s executives. (And I can’t recommend enough The Wall Street Journal’s recent series on the social media giant and all the ways its screwing up the world.)
A tried and true corporate method to push back on damaging narratives at the national level is to make the firm seem indispensable at the local level, tied to nice things in the community that supposedly wouldn’t exist without corporate beneficence. Going all out on local “benefits” gives members of Congress and statehouses the jitters about doing anything that might throw off the status quo.
What needed to counteract Facebook’s narrative is for folks like you who took the time to read to the end of this newsletter item to write or call your state, local, and federal representatives and let them know you’re interested in reining in Facebook’s power, not letting it sweet-talk its way into your community. There’s only so much a snazzy new website can do in the face of real public pressure.
ONE MORE THING: Local officials in a section of Alexandria, Virginia, known as Arlandria, believe it is going to take $100 million to preserve housing affordability in the area. That’s a lot, which makes sense, since a substantial number of residents are about to experience housing-related cost pressures due to Amazon’s HQ2 being built nearby.
If only Virginia had decided to spend the money it plowed into subsidizing the problem into fixing it instead, since HQ2 was probably coming no matter what.
Thanks for reading this edition of Boondoggle. If you liked it, please take a moment to click the little heart under the headline or below. And forward it to friends, family, or neighbors using the green buttons. Every click and share really helps.
If you don’t subscribe already and you’d like to sign up, just click below.
Finally, if you’d like to pick up a copy of my book, The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, go here.
— Pat Garofalo