Cutting Off Our Nose to Spite Our Face: Amazon's Pullout Will Be Bad For The Very Workers That Opponents Of The Deal Claim To Care About
Nothing to celebrate. (Drew Angerer / Getty Images)
When Amazon announced its plans to build half of its second headquarters in New York City, it was a proof of our city’s ability to shape the future of work and a potentially transformative move that could further diversify and strengthen our growing economy. After all, Amazon was coming to the most progressive, union-friendly city and high-tax state in the country. New York was showing the world that strong unions, smart regulation and progressive taxation are not an impediment to growth — in fact it’s what helps to drive equitable growth at a time of massive economic inequality.
And yet, despite strong public support for the project, including from communities of color that would have benefited from the thousands of good union jobs spurred by the development, opposition from a few progressive organizations — many of which I have historically considered allies — created enough controversy to make Amazon abandon the project.
Opponents were quick to declare victory. Let’s examine what, exactly, they have achieved.
One critique of the Amazon deal was that the tax incentives were overly generous. Of course they were! We should have a conversation about how to ban this kind of incentives at the federal level so states and cities can resist the impulse to poach jobs and investment from their neighbors. The European Union already does it, why can’t we do it in America?
It’s astonishing that progressive organizers and federal elected officials complaining about overly generous tax breaks have barely lifted a finger to solve this problem the only way it can actually be solved. When my progressive friends are ready to have that fight, count me in.
But let’s look at the reality we have to face in the current scenario and compare the incentives offered by many other states and more importantly in relation to the taxes Amazon was actually on the hook to pay to New York.
Maryland was offering a $8.5 billion incentive package! In New York, the vast majority of the $3 billion in total subsidies was “performance-based” — meaning Amazon would get back from the city and the state a portion of the tax revenue it generated. Some of my progressive friends liked to carp about the city and state “giving” billions to Amazon instead of spending those funds on affordable housing or fixing the MTA. That was just a blatant mischaracterization.
The reality is that the tax incentives for Amazon were not taken from existing funds that could have been spent on other priorities but rather were structured to be a small fraction of the tax revenue the company would pay or generate to the city and state — with the majority of that new revenue available for precisely the priorities activists are clamoring for. But it’s easier to muster righteous indignation when you ignore the facts, so here we are.
In the meantime, Amazon’s opponents can claim that they “saved” some $3 billion in corporate welfare — but at the cost of about $25 billion in revenue for New York City in the coming decades. To put it in context, this is more money than the millionaires’ tax, a major progressive priority, would generate over the same period of time. Instead that money has just been flushed down the toilet — or technically given to the state of Virginia (though Virginia’s taxes are considerably lower, so locating there means that less of the company’s considerable wealth would be taxed and redistributed through public investments than would have had they stayed in NYC). Victory?
Let’s turn to the criticism that Amazon is anti-union. That’s true. Here’s a newsflash: that’s also true of pretty much every private sector employer in America, including the ones that have unions. You’d be hard pressed to find any large employers that actually prefer to have their workers represented by a union or that are even indifferent on the subject. Power isn’t something that corporations give to their workers, it’s something workers take from their employers by joining together and organizing.
Companies like Amazon always resist unionization of their own employees. Breaking that resistance typically requires sustained organizing of workers combined with political pressure and other tactics that eventually cause the employer to recognize a union. 32BJ has been engaged in just such an effort to organize airport workers up and down the East Coast. Roughly 15,000 employees who work for companies that contract with major airlines for jobs like aircraft cleaner and baggage handlers and security.
Do you think the airlines welcomed this campaign? Absolutely not. We fought hard. For years. And we won.
Currently we represent thousands of those workers; we’ve made by far the biggest inroads in the New York-area airports. And our union was able to secure a commitment from Amazon that would have created thousands of permanent family-sustaining jobs with good wages and benefits for cleaners and security guards at HQ2.
There is a reason for that: New York City is where the labor movement already has the most density and the most political power. If there is any place where it would be possible to leverage the labor movement’s existing power to crack open the door to collective bargaining for Amazon workers, it is here.
Now that Amazon has decided to shift its operations entirely to Virginia, we will of course continue to stand shoulder to shoulder with union brothers and sisters to fight for Amazon workers’ right to organize. But it’s an understatement to say that we have lost the home-field advantage. In New York City, 25% of all workers are union members. In Virginia, barely 4% are. In New York City the minimum wage is $15 per hour. In Virginia, it’s less than half that — just $7.25 per hour.
In New York, unions and progressive allies have helped win progressive workplace policies like paid family leave and paid sick days for workers at all but the smallest businesses. Just a few weeks after Amazon announced its plan to bring HQ2 to Queens, Mayor de Blasio announced his plan to pass legislation guaranteeing workers two weeks of paid vacation, a first in the country should it pass. In Virginia, where unions have far less political power and Republicans still control both chambers of the legislature, these benefits and protections are a distant fantasy.
Does Amazon’s decision to leave Long Island City for expanded operations in Virginia and Tennessee help Amazon workers seeking to organize? Not one bit. Does it hurt those efforts? Probably.
So, mission accomplished?
What exactly do Amazon’s opponents have to celebrate? Ending the race to the bottom of corporate welfare? Nope. Blocking Amazon’s development of facial recognition software — or ICE’s use of it? Nope. Better working conditions or union representation for Amazon workers? Nope. They have succeeded in eliminating billions of dollars in revenue to make desperately needed investments in public transit and affordable housing harder not easier. They have succeeded in eliminating more than 25,000 jobs, about 40% of which don’t require a college degree, that New York City residents need and want.
The good news is that an emboldened activist-left has shown that it knows how to win. The bad news is that it also shows catastrophically bad judgment about what to fight for in the first place.
Figueroa is president of 32BJ Service Employees International Union.