The Jobs That Starve Cities
So, Amazon officially pulled out of their HQ2 project in Long Island City today, to my great relief, but I see a number of contrasting reactions that hold up the lost tax revenue bill (offset by the $3BB subsidy they struck with the city), and—more importantly—the loss of the 25,000 jobs that project promised to the local economy. To explain why I’m still extremely pro-Amazon-hitting-the-road, let’s model the effect of those 25,000 jobs on the city of New York, and in order to do that, it is useful to look at their most recent racial diversity report (and since it’s tough to find on their website, let’s use Recode’s industry charts). On the surface, the numbers look rosy: Amazon’s overall workforce is 21% black and 13% latinx. When you look at two dimensions of their report that represent the higher-paid cohort of their employees, though, it gets shadier: 5% of management is latinx, with the same proportion for black managers. In engineering, just 2.6% of engineers at the company are black, and 3.5% latinx. Where do the rest of the people of color work? Disproportionately in the warehouse and helper jobs, where workplace safety and compensation are, in the words of Winnie Byanyima in her widely-shared comments at Davos, at best undignified and at worst inexcusable.
New York’s EDC has reported that only half of the jobs Amazon planned to bring to New York were in the engineering class. Has Amazon demonstrated a commitment to paying fair wages for all their employees, or are they simply trying to compete in an engineering salary arms race with the other major tech companies—all of whom pay at levels hilariously in excess of the local median wage (and, for what it’s worth, well above historic averages for engineers throughout the industry)? What effect do twelve and a half thousand experienced (and, as demonstrated above, largely white) engineers actually have on Queens and the local economy? They drive up rents and other associated costs of living, pushing out recent immigrants and people of color. Some of those residents might be hired for the Amazonian underclass, sure, but the increased costs of living would drive many to move farther out—often to different municipalities entirely. We’ve seen this before, in San Francisco. How has the social safety net, bolstered by all these new taxes, swooped in to save those who don’t work for an enormous tech company in the Bay Area? In many ways, it simply doesn’t. If you can’t afford to live in a city, what good are the additional taxes paid to that city?
We’ve seen this before in other ways, too—here in New York. As it stands today, the middle and lower class segments of New York’s population, made up disproportionately of people of color, are stuck between a shrinking stock of rent-stabilized apartments and a cost of living that has skyrocketed. In fact, between the years 2010 and 2017, the median income in NYC (again, in most cases sharply less than an Amazon engineer stands to make) increased by just 1.8% annually, while rents on average increased by 3.9% on average; more tellingly, rents in the bottom 20% of the market have gone up 4.9% year over year in the same period. What does this mean? We’re already living in a world in which low-paid workers are being pushed out of the city by rising salaries in the top 20% of the population (see also: the whitest). If this is the practice the city hopes to use to increase revenues and compete, then the game is rigged. I cannot get behind offering three billion dollars in tax subsidies to a company that has no demonstrable interest in treating their employees and the communities they live in with dignity, and I have no interest in living in a city whose vitality is being starved out by five companies with no local history. New York has already suffered thirty years of indignities at the hand of carpet-bagging multinationals and corrupt politicians—why not stop today?
