Amazon HQ2 won’t help New York’s massive inequality problem

In New York City, the rich are getting richer and the poor are getting poorer. The next big thing that could make income inequality worse? Amazon’s announcement that Long Island City will be the site of its next headquarters.

The corporation, which is worth one trillion dollars, is slated to receive $1.7 billion in public subsidies and another $500 million in capital grants from New York State and New York City in exchange for creating 25,000 jobs over the next decade, which will have an average salary of $150,000. The amount that Amazon, the city, and the state are pledging for workforce development? An initial investment of $15 million, which is less than one percent of the overall public subsidy.

Amazon receiving money hand over fist while income disparity worsens and the housing crisis accelerates won’t help—and could exacerbate—the city’s inequality problem.

Amazon plans to locate its Long Island City headquarters near the East River waterfront between 46th avenue and 44th road. A few blocks north are the Queensbridge Houses, the country’s largest public housing development, where the median income for a family of four is $15,800 and 60 percent of households rely on food stamps. And the New York Times noted in a recent piece that many of the new companies that have settled in Long Island City have neglected to hire people from within the community.

In a press conference announcing the HQ2 news, Mayor Bill de Blasio acknowledged the disparity between Long Island City’s rapidly gentrifying enclaves and its areas of poverty, but, puzzlingly, framed it in rose-tinted buzzspeak instead of identifying the challenge: extreme income inequality.

In an agreement with the New York State Urban Development Corporation, the New York City Economic Development Corporation, and New York City Hall, Amazon promised a number of public commitments including infrastructure funding; workforce development initiatives; internship programs; and hiring women, minority-owned businesses, and local residents.

However, there are few specifics about the exact investments and how they’ll directly benefit New Yorkers.

Beginning in 2020, New York City, New York state, and Amazon will each initially spend $5 million over a period of 10 years—for a total of $15 million—for initiatives like technology training programs “targeting non-traditional demographics including NYCHA residents, combined with Company recruiting and interviewing efforts directed to students graduating from such programs.”

Amazon plans to hold internships and “career exploration” activities for public high school students including “career days, mock interviews, site visits, and other work-based learning opportunities.” Meanwhile, Amazon is also promising “additional programming and training that are reflective of the company’s talent attraction and retention goals in New York City, including the implementation of programs with City and State colleges”

For three years, starting in 2020, Amazon will hold or participate in semi-annual job fairs and resume workshops at the Queensbridge Houses to promote employment opportunities. The agreement does not mention specifics about what the job fairs and resume workshops will entail. After the three-year period, Amazon says it will “collaborate in good faith to determine additional measures to support NYCHA tenants.”

While these initiatives might sound good on paper, what’s troubling is how little is going into training and education for the types of jobs Amazon is forecasted to hire compared to the amount of public subsidies the company will receive. The agreement projects 25,000 new jobs with an average salary over $150,000 per year (it seems unlikely that many of these jobs are entry level). For each job created, Amazon will receive $48,000 worth of tax breaks.

Local politicians and advocacy groups have responded strongly to the amount of public subsidies promised to Amazon and to the opaque negotiations.

“I don’t understand why a company as rich as Amazon would need nearly $2 billion in public money for its expansion plans at a time when New York desperately needs money for affordable housing, transportation, infrastructure and education,” City Council speaker Cory Johnson said in a written statement. “I will always advocate for economic development and jobs in New York, but when the process is done behind closed doors, with zero community input and nearly $2 billion in subsidies to a global behemoth, I am going to be skeptical.”

On Twitter, newly elected congressional representative Alexandria Ocasio-Coretez pointed out that there is little information about the quality of jobs, the range of salaries to be offered, benefits, and ability for employees to collectively bargain.

Jonathan Westin, executive director of New York Communities for Change, which advocates for low-income New Yorkers, criticized Gov. Andrew Cuomo and de Blasio for neglecting public infrastructure, like the subway system and housing, and expressed concern that Amazon will accelerate gentrification, the housing crisis, and loss of small businesses.

“Public resources should be invested in local communities and in public assets, not in a massive corporation like Amazon that will do more harm than good,” Westin said in a written statement. “When tech and e-commerce companies like Amazon receive public subsidies, low-income people of color and public housing residents rarely get hired.”

City Council member Jimmy Van Bramer and State Senator Michael Gianaris issued a joint statement against Amazon, which read: “offering massive corporate welfare from scarce public resources to one of the wealthiest corporations in the world at a time of great need in our state is just wrong.”

In a statement opposing Amazon’s HQ2, the Association for Neighborhood Housing and Development pointed out that some of the concessions listed in the agreement were already planned and that a community-oriented plan created without the community’s input could be harmful. “The promised job growth and supposed positive impact of Amazon’s expansion to New York don’t outweigh the major infrastructural, housing, and equity challenges it is sure to bring,” the Association wrote. “A deal created to fund one of the largest mega-projects in New York City’s history without any public process, input, or deliberation not only disempowers the very communities that will be most impacted, but entirely erases their agency and their voices.”

Amazon should pay its employees out of its own pockets, not from taxpayers. Public money would be better spent helping the 345,000 unemployed and 1.6 million underemployed New Yorkers get the education and training they want and deserve. While Amazon is hosting its resume workshops, it may likely end up hiring people who already have the skills and expertise they need. As the gap gets wider, it becomes harder to catch up—and at some point, it will become impossible to do so.