What does ’s HQ2 tax-break grab mean for U.S. cities?

By Greg LeRoy and Ryan Schlegel

Funders have an opportunity to promote a new model of economic development where communities benefit as much as corporations like Amazon.

There’s nothing like an outrageous cor- DOES ANYONE BENEFIT FROM This indicates that the $1.6 billion porate tax-break money grab to bring AMAZON BESIDES AMAZON? in state and local subsidies used to people together. People coast to coast questioned the attract Amazon since 2000 (as Good That’s our takeaway from the year- cost-benefit analysis of HQ2 coming to Jobs First has documented2) was wast- long auction Amazon.com Inc. staged their town. Amazon’s voracious growth ed and could have been better spent for its second headquarters or “HQ2.” – arguably the key factor that drove cit- on public services. Amazon’s transparently ham-hand- ies and states to fall over themselves to Amazon’s complicated impacts on ed quest to secure a multibillion-dollar court HQ2 – is undeniable. local and regional economies are well- tax-break package attracted 238 bids In 2017, the company hired more documented, including the company’s and led the company to choose 2 new new employees every quarter than role in gentrification and homelessness locations: the suburbs of Wash- Facebook employs altogether. in , the poverty wages that force ington, D.C., and , . Yet, the potential benefits of job its warehouse workers to depend on Community leaders in both cities growth don’t accrue to every communi- social safety net programs and a preda- have been quick to question the wisdom ty. The Economic Policy Institute found1 tory, monopolistic business model that of spending billions in public money to that the arrival of an Amazon warehouse trampled local booksellers. attract the company most responsible doesn’t grow overall local employment. According to a report3 from the Insti- for Seattle’s ongoing crisis to places already burdened with their own housing challenges. The Amazon HQ2 circus has brought intense scrutiny to a corporate-domi- nated site-selection process, where lo- cal governments passively grant huge incentive giveaways while demanding too little in return. Communities are organizing to en- sure that HQ2 benefits the 99% as much as it benefits , Amazon’s CEO and the world’s richest person. It’s time that foundations and donors who care about fair housing, homeless- ness, local businesses and good jobs join them to change what economic development could look like. A protest against Amazon business practices at the Seattle Art Museum on May 24, 2012. Photo from www.flickr.com/photos/Backbone_Campaign (CC by-NC-SA 2.0).

Responsive Philanthropy February 2019 9 tute for Local Self Reliance, Amazon un- in the debate require philanthropic business and political leaders to ben- dercuts even its own third-party sellers. resources to counter the avalanche of efit low-income people. Its values are suspect: Action on expensive corporate PR campaigns that Use your voice to advocate polices that Race and the Economy and the Part- will surely come now that Amazon has ensure shared prosperity and question nership for Working Families (PWF) re- selected suburban Virginia and Queens corporate dominance of state and local vealed that Amazon continues to profit as its HQ2 locations. policymaking. from selling white supremacist and Is- The locations (where the company’s lamophobic merchandise.4 And Mijen- growth will play out for a decade or Amazon’s 2 new headquarters could te and others have shown that Amazon more) will also need ongoing support become monuments to high-tech arro- provides crucial support to ICE’s efforts for work on Amazon’s wide-ranging ef- gance that deepen economic and racial to track, detain and deport immigrants.5 fects in many sectors of the economy. inequality in our cities. Or, they could How can funders make a difference? become economic development game- COMMUNITIES IN THE FRONT Here are 4 ways philanthropy can changers: a new model of corporate LINES OF EQUITABLE ECONOMIC step up to support local organizing to accountability and community power DEVELOPMENT combat Amazon’s dominance in the generating broadly shared benefits. The A surge of local organizing from the economic development conversation: moment is ours to seize! n left and right (such as the Koch broth- ers-backed Generation Opportunity’s 1. Look beyond issue silos. Greg LeRoy (@GregLeRoy4) is social media campaign) is demanding “Funders can have the most impact by executive director of Good Jobs First that Amazon must agree to come to the funding multifaceted coalitions that (@goodjobsfirst). Ryan Schlegel (@r_j_ table to negotiate a Community Ben- represent communities and workers schlegel) is the research director of efits Agreement (CBA) to ensure that in- as a whole,” Partnership for Working NCRP (@NCRP). cumbent residents in Queens and sub- Families Executive Director Lauren urban Virginia will benefit from HQ2 Jacobs explains. “The fight over Ama- rather than be its collateral damage. zon’s new campuses is not just about Notes CBAs are contracts between corpo- jobs – it’s about empowering commu- 1. Janelle Jones and Ben Zipperer, “Un- rations and community coalitions that nities to shape their own futures and filled Promises,” Economic Policy Insti- tute, February 1, 2018, https://www. can cover a wide range of safeguards preserve the rich cultures and histo- epi.org/publication/unfulfilled-promises- such as local hiring and procurement, ries that make these cities attractive amazon-warehouses-do-not-generate- affordable housing, public transit, small to tech corporations and gentrifiers.” broad-based-employment-growth/. business development and environ- 2. Visit https://www.goodjobsfirst.org/ mental improvements. 2. Move money to organizations in amazon-tracker. Since the announcement of HQ2, communities that are directly affected 3. Olivia LaVecchia and Stacy Mitchell, numerous coalitions of community by HQ2. Amazon’s Stranglehold, Institute for Lo- groups have popped up across the It’s especially important for funders to cal Self-Reliance (Minneapolis, Portland country to advocate for the well-being support efforts that build the power and Washington, D.C.: November of our communities in negotiations and and amplify the voices of low-income 2016), https://ilsr.org/wp-content/ final selection of the new headquarters. people and especially Black, Latinx, uploads/2016/11/ILSR_AmazonRe- For example, PWF, Jobs with Justice Asian-American and other communi- port_final.pdf. 4. Partnership for Working Families and and 130 other groups issued an open ties of color. Action Center on Race & the Economy, letter to Amazon CEO Jeff Bezos at Delivering Hate, July 2018, https:// ourHQ2wishlist.org enumerating key 3. Identify ways your current grantmak- www.acrecampaigns.org/amazon. community demands, including no tax ing priorities will be impacted by 5. Visit https://mijente.net/notechforice/. dodging and a robust public engage- Amazon’s outsized influence in impact- ment process. ed communities. Examples of relevant issue areas in- 4 WAYS FUNDERS CAN SUPPORT clude housing affordability, food ac- HQ2 COMMUNITIES cess, green development and more. These efforts to put local voices at the center of the conversation and keep 4. Wield your own power beyond community demands front and center grantmaking dollars as community,

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