Hosting Amazon's New Headquarters: Burden or Benefit?

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  September 15, 2017

Hosting Amazon's New Headquarters: Burden or Benefit?

Cities across the U.S. are in a bidding war to host Amazon's $5 billion investment, but Seattle journalist Richard Silverstein cautions that having Amazon as a neighbor isn't a 'honeymoon romance'
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Richard Silverstein is an independent journalist who writes the Tikun Olam blog, which explores Jewish-Muslim relations and the Israeli-Arab conflict.


Sharmini Peries: It's The Real News Network. I'm Sharmini Peries, coming to you from Baltimore. Amazon corporate, now based in Seattle, Washington. It's looking for a second headquarter, and many cities are vying for that honor of hosting the $5 billion investment. Amazon is planning to hire 50,000 people in the new chosen location. It's like bidding for the Olympics. Many cities are making great efforts to convince Amazon to choose them, however, is hosting Amazon all that it is cut out to be? Is it beneficial for those who are living in the city?

To understand this better we are going to speak to someone living in Seattle where it is now headquartered, and that is Richard Silverstein. He is a blogger at Tikkun Olam and contributes to press news, among many other established publications. Thank you so much for joining us today, Richard.

Richard Silverstein: Thanks for having me. Appreciate it.

Sharmini Peries: Richard, this July we learned that Amazon crossed the $50 billion mark in terms of its value, making it one of the largest corporations in the world. Now, it has also bought Whole Foods and other companies. Is this the reason for its expansion into another city?

Richard Silverstein: Yes, I think so. We have 25,000 Amazon employees in Seattle itself, and we have 350,000 employees around the world. Amazon currently holds 20% of all the office space in Seattle. So, it really can't do this expansion in Seattle without irreparably damaging the city and its infrastructure. So, it's looking for another location in the United States, and I might add that what it's primarily looking for is a huge tax giveaway from whatever tax jurisdiction wins this bid.

There are cities like Denver and Baltimore where you're based, and several others that are really in the top of the running here, but what I want citizens and leaders of any community that is going to bid to recognize is that there are many drawbacks to having Amazon as a neighbor. They include a decline in affordability in your town, an astronomical rise in the cost of real estate, both commercial and residential. Traffic will be a huge snafu. We have some of the worst traffic in the United States, and if you're going to add 50,000 new employees coming from outside of that community into the community, you're going to have huge increases in traffic levels.

Also, the traditions and the heritage of that city are going to change as well. In Seattle, we have more open holes and construction rigs than we do actual extant office buildings. Everywhere you go, there's one or two open holes where there's going to be a 40 story condo or office tower going up. This really irreparably changes the complexion of the city.

Sharmini Peries: All right, and not to mention number of flights coming in and out, of course polluting the environment. We'll get to that in a minute, but can you tell us, what are the incentives, not only for the city, but the state it's being hosted in as well? In terms of people paying taxes and of course, the development sector is quite happy about this, in terms of real estate development sector and so on. But what are the advantages for hosting Amazon for the city and the state?

Richard Silverstein: That's a good point. We can't just argue that there are negatives, obviously. It is going to provide 50,000 very well-paying jobs. The average salary for an Amazon employee is about $100,000, so you can imagine that there are almost every major city in the United States would love to have this as a star in the firmament, and Amazon is a high prestige company. So, any city that won Amazon would add a major international employer to its list of companies that are located there.

It would also raise the salary for all employees in the region. This would obviously help people both rich and poor in those communities. It would also, however, raise wages for even the smallest businesses in those communities. So, small businesses would have to, they would be feeling that impact as well.

Sharmini Peries: What are the other downsides?

Richard Silverstein: Well, Amazon in its request for proposal from these communities has asked for communities that have a major international airport. You can imagine these employees are going to travel all over the world and this is going to create huge burdens, not just on airports. It's going to be burdens on infrastructure, you're going to have huge levels of construction, real estate. I mean, residential and commercial. That puts a huge burden on all sorts of environmental issues in communities from sewer lines to water treatment, to waste treatment.

It will also really have an impact on the beauty of these communities because the entire skyline is going to change, but on the other hand, we have to add that Amazon does, when it comes into communities, engages with the local universities, it has technological relationships with universities, so there are these benefits that I mentioned, but I really don't want people to think that this is really a honeymoon romance.

These communities are going to have to consider giving away hundreds of millions of dollars in tax incentives to this company, and Amazon drives a very hard bargain. It will give nothing away for free, and it will take as much as it can from these communities, so they have to be very tough in their negotiating position if they don't want to be taken by this very savvy and very aggressive company.

Sharmini Peries: What can you tell us about Amazon workers? In the sense that of course this is a great incentive, a job incentive for the city, and of course the state as well. But how is Amazon treating their employees and are their employees happy working for Amazon?

Richard Silverstein: Well, it's a mixed bag. There was a scandal recently here in Seattle with a female former employee writing an exposé about her bad treatment on the part of her supervisors, and the ways in which women employees, and this is an issue in all of Silicon Valley, how women employees are given short shrift and not respected. Demands are placed on them that are not placed on male employees, they're treated more like secretaries, even when they're computer engineers.

Many female employees at Amazon joined in with those criticisms and Jeff Bezos himself was forced to eat crow and to apologize for the way that this particular woman was treated. That being said, obviously these are very good paying jobs and people are very happy to take them. People will be coming from all over the United States, moving into whatever community is this new headquarters, so they're high paying jobs for very skilled, very highly educated people, with computer engineering degrees from the major universities around the country. So, as I said, it's a mixed bag overall.

Sharmini Peries: Right. Richard, finally, off queue here in terms of the topic we're discussing right now, you have recently also written about the mayor of Seattle, and the sexual abuse case he's involved in, in your blog, and given that you write about this in your blog, give us a sense of what's going on in that case and what happened.

Richard Silverstein: We have a gay mayor, Ed Murray, who championed the gay marriage proposal in the legislature, and that was his road to success politically and how he eventually became mayor. He was charged with sexual abuse years ago when he was a young person, of minors, and paying for sex with male foster children that he fostered. He denied the charges and he continued in office, and then subsequently more victims have come forward. Yesterday, he resigned immediately, today is his last day in office.

We're now having a mayoral election. I should mention, go back, Ed Murray is basically a corporate Democrat. He would be considered very liberal in some cities, but in Seattle he's sort of a moderate. But very corporate, very much supported by the developers who are benefiting so much by Amazon's development. We have two major candidates. One is also a corporate Democrat who was endorsed by Murray and stood by him until one hour before he announced his resignation.

She is Jenny Durkan and she's a former U.S. Attorney, and we have a genuine progressive city planner, Cary Moon, who is running on a slow growth or controlled-growth platform. She has the support of many of the progressives in Seattle, and by the way, Seattle has the only elected socialist representative on our City Council, Kshama Sawant. We have two other feminist progressives on our City Council, so the question is whether Seattle is going to continue being in the pocket of developers, by electing a corporate Democrat, or whether we are going to go more in the Burlington model that elected Bernie Sanders, and perhaps have a true resurgence of progressivism in the Pacific Northwest, and of which I hope that is going to be the choice that our people do when the election comes in November.

Sharmini Peries: All right, Richard. I thank you so much for joining us, and thank you for that additional piece of information of what's going on in Seattle. Thank you so much.

Richard S.: Thank you so much for having me. I appreciate it.

Sharmini Peries: And thank you for joining us here on The Real News Network.


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