I still remember the circus around HQ2 and how so many politicians (most prominently AOC) were dragged in the media and online forums for not bowing down to Amazon and being "anti jobs". Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works.
What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
>> What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
Could you elaborate on the argument here -- are you suggesting that if a job has a potential for future loss, it is just better to not create the job at all? If I was mayor, i'd be happy to take a high-paying job in my locality even if it isn't perpetual. The key would be to tie incentives to actual payroll. Subsidy disappears as soon as the job disappears.
But guaranteeing perpetual jobs is something no organization can do, not even governments.
AOC was against the subsidies. No one is stopping Amazon from creating jobs and then then getting rid of them when they hit a downturn. The issue was the subsidies provided and if companies can be held accountable.
Virginia paid $750M in subsidies for Amazon HQ2 to bring 2500 high paying jobs in 2023 and Amazon did not reach that goal. They'll probably miss the 2024 mark too. What recourse does Virginia have?
The "subsidies" in this case in NYC were a tax rebate over 10 years tied directly to the number of positions created. The Empire program itself was meant to incentivize new offices to open in boroughs other than Manhattan to help distribute the load on transit and other services. Any company opening new office space was eligible, not just Amazon.
The only real "subsidy" in the NYC deal was a land grant where an old plastics factory used to be that required significant environmental clean up. The land is also next to the notorious Queensbridge projects.
Really considering we mostly work in this industry, the amount of ignorance surrounding the deal, its incentive structure, and how it went up in flames is staggering.
Even the talking point about how Amazon opened up new NYC offices anyways is completely innumerate, so far they've created about 1/5th of the positions that they were projected to create under the HQ2 proposal.
So the original proposal was to create 25K jobs over 15+ years, and the fact that they have created "only" 1/5 the jobs in ~5 years with zero subsidies is supposed to be a negative? Especially considering that they are in the middle of layoffs and not even hitting their committed HQ2 goals.
>> So the original proposal was to create 25K jobs over 15+ years, and the fact that they have created "only" 1/5 the jobs in ~5 years with zero subsidies is supposed to be a negative?
How is this obviously not bad!?
Arent most of us technologists here? How is creating 1 job better than creating 5 high paying jobs? Can anyone currently unemployed chime in on whether you prefer having high paying jobs available vs not having them available?
Overall, Amazon did request $152M in April 2023 for the 6939 jobs it created. They didn’t request any money thru COVID and that $152M will be paid late 2026. Amazon has also paused building due to WFH and maybe realizing they don’t need another HQ. Overall, I would say this thing will stall for the next few years. There is an opportunity cost related to other businesses being offered those same subsidies and are growing. Alas, that can’t be measured.
> Amazon has also paused building due to WFH and maybe realizing they don’t need another HQ
Working at AWS I had teammates hired as remote for a team that was distributed across various regions, and we were given a mandate to either "return" to an office (including potentially having to move if one of the ones assigned to the team) or "voluntarily" leave (with no severance). I'm not saying that they didn't realize they didn't need as much real estate overall, but WFH is not the reason because it largely doesn't exist anymore at Amazon.
I think you are both right? amazon did pause or at least slow building due to WFH, during the pandemic. now WFH is over, but they are still doing layoffs. obviously both are sensitive subjects, but it doesn't make sense to immediately resume large construction projects while headcount is trending downward.
there's one more factor being missed here. obviously they won't say so publicly, but there's a case to be made that the entire HQ2 was as much about calling Seattle's bluff as it was about establishing a second company HQ for its own sake. now that that particular piece of legislation has been repealed, there's not as much reason to follow through on the original plan for HQ2. see: https://en.m.wikipedia.org/wiki/Seattle_head_tax
you would have the opportunity to argue whether you were fired for cause (which determines eligibility for unemployment insurance). in general that's hard to win if you just don't show up to your assigned work location, but there may be grounds to argue that mandatory relocation beyond a certain distance constitutes constructive dismissal.
but notice pay and severance are not mandatory for at will employees. the company basically gets to decide whether it's worth paying you not to sue them.
I imagine they'd just stop paying you and not give you any severance, putting the ball in your court to initiate any legal actions to try to force them to pay severance.
Because the rebate was conditional on sustained hiring and not a grant like the political rhetoric would have most believe.
Essentially the state was rebating the corporate tax they would have received in lieu of the income tax revenue obtained from the new positions along with the increased competition for high paying tech roles in the city.
The program was deliberately structured to be revenue neutral in terms of absolute tax revenue while increasing overall tax revenue by increasing state GDP
I'm not sure what you mean by political rhetoric. Are you saying calling it a subsidy would be misleading (?) because it was given on a condition? That seems a bid odd because subsidies often comes with conditions attached.
Person below commented they already went down from 50K jobs promised to 25K and that $750M is still sitting pretty. The terms are also flexible and over 15+ years so they can keep making false promises kicking the can down the road.
Not hard to imagine Amazon got a favorable deal concerning the subsidy stipulations due to all the competing bids for HQ2.
How does that make any sense? 750M / 2500 is 300k. It's just better to do helicopter money - literally just drop money from the skies and I would bet that more would be generated in return.
Assuming that Gemini is right and Virginia keeps 5-6% of your taxable income, individuals should earn at least 5M just for break even. I don't understand this model - can someone help make sense?
Pretty sure they missed a 0. They were meant to bring 25,000 jobs (which itself was scaled back from the 50,000 they had initially promised). Of course the problem with all such deals is that the timeline is always "flexible" (15+ years in this case), and even if the jobs are filled they will go away overnight if the company deems it better for their bottom line. Amazon has already cut 30,000+ corporate jobs in the last year and a half, and in his latest shareholder letter Jassy committed to continued "cost-cutting" across the company (https://www.cnbc.com/2024/04/11/amazon-ceo-andy-jassy-says-c...).
The actual terms of the deal is $22k subsidy per job. At the time of the deal the average salary for those jobs had to be $150k. That average salary requirement goes up each year. Last year it was $157k and next year $159k. The jobs also have to last 5 years in order for Amazon to get the payout. At those terms the state income tax in the salaries will more than pay for the subsidy over 5 years. That doesn’t include the additional tax revenue from the construction of HQ2. Additional tax revenue from service businesses and their employees which support either HQ2 or the employees working there.
300K is a one-time fee, but that high paying job will probably pay state taxes for years to come. Not to mention the extra taxes collected on that person renting, shopping, driving, etc. Amazon HQ2 might get other companies to make a HQ there too. There are benefits, but Amazon can't be held accountable for deals like these.
Well, it could build a sports facility for Ted Leonsis, and hope that that brings in jobs and dollars. But that didn't make it through the legislature.
AOC represents one district in Queens, not Manhattan or the entire city of New York. Her constituents do not benefit from Amazon relocating to Manhattan's West Side. Hudson Yards, where Amazon has rented space, received $6 billion in tax incentives, double the HQ2 package.
Further, most of the incentive programs that comprised Amazon's HQ2 package were pre-existing programs available to anyone, led by $1.2 billion from Excelsior Jobs, $897 million from REAP, both of which are still active programs open to any company meeting their requirements.
>It seems like you're trying to make this way more complex than it is.
>From the perspective of a city:
>Gaining quality high paying jobs without a large subsidy >> Gaining quality high paying jobs while paying a large subsidy.
>That's what was argued and is correct. She knew the city was in a strong negotiation position and it was absurd to provide a subsidy.
Here is the actual equation we ended up with:
Gaining N high paying jobs without a large subsidy << Gaining 5N quality high paying jobs while paying a large subsidy paid if and only if 5N jobs created.
If the company is soliciting significant bribes from the state to create the job, then, er, yeah, arguably the state should _never_ engage in that sort of thing, but if it does then it should absolutely be looking for assurances that it's getting value for money.
I do think it's slightly surprising that the US doesn't really seem to have an equivalent to the EU's concept of "unlawful state aid", which shuts down a lot of this stuff before it starts.
What's crazier still is that Amazon made all state and local governments sign NDAs which stated that the bidding process and any other specifics could not be shared with the public. Officials nationwide read this and went "yup, sounds good!" Quite literally legalized corruption.
>> Jobs are not a commodity that has to be "created" at all. A job is just a demand for labor. Either the demand is there at market rate, or it's not.
You are right, but missing the fact that the commodity can exist in location a vs location b. The argument for subsidies was to push to move the job to a specific location. As a tech worker in the NYC area, this would be awesome. It was an incredibly selfish decision by AoC and others to vanquish most of these jobs.
Also remember all the secondary and tertiary jobs (nannies, restaurants, dog-walkers) which were all lost along with the high paying tech jobs.
1. that organizations leverage and abuse these breaks
2. that its possible for layoffs to not impact the new teams and buildings pretty easily
3. that a single bad quarter shouldn't lead to layoffs esp from a company that literally is the poster child for not tanking share price when facing losses
Its weird to have this subtext or joke that AOC wouldn't understand business cycles. She's not the first or last politician to try and spend money on lasting change.
All it took was a pandemic, almost all offices in the entire United States closing for periods lasting between months and years, the widespread normalization of remote work as a direct consequence, the migration of tech workers away from high-COL metropolitan hubs, and mass layoffs across the entire tech industry.
Corporate tax benefits shouldn't exist. The ones that make the news seem to be a corrupt bargain between corporations (which get huge tax breaks that the locality offering them will never recoup) and politicians (who get to campaign on "bringing jobs" or whatever while happily emptying the public coffers to make it happen).
>> Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works.
I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium. We are now post-pandemic, where office space in major cities sit empty, languishing, and sometimes entire buildings going bankrupt with no equity value left.
Of course Amazon is able to easily rent tons of office space in NYC _now_.
> I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium.
Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning there is no reason to be paying people to move into this premium, high-in-demand product. All the more proof that her and others saying the same thing were correct.
>> Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning more people want it than the amount available. Meaning there is no reason to be paying people to get this premium high in demand product. All the more reason that her and others saying the same thing were correct.
The argument was the subsidies were going to be to build new office space in Long Island City in Queens, where there weren't many jobs. As a former Brooklyner, this seemed like a huge positive to me. Imagine not having to move to the West Coast for FAANG jobs! (Obviously this has substantially changed with the pandemic and FAANG jobs distributing across the coasts post pandemic)
Businesses need to operate somewhere - if local governments stand strong we all win. If your local government caves to the wave of lobbying cocktail parties and PAC money injection, please vote them out.
The costs we levy on businesses to operate in the US are extremely affordable and fair - giving them further discounts and rebates does nothing but enrich investors.
The Rust Belt is proof positive of Big Business operating in a unrestrained environment. NAFTA, the move to China, and its ilk are a direct consequence of federal government overriding the will of the people. If there was any actual power at the local level any imports the got shipped overseas would have been slapped with tariffs. You shouldn't get unrestrained access to the largest market in the west while also ignoring the external costs.
It's a shame that along with the clause against bills of attainder, banning laws that are intended to solely harm a specific individual or group of individuals, the constitution didn't also ban bills of... abtainder (?) banning laws that are intended to solely _benefit_ a specific individual or groups of individuals.
Would be the best antidote to this sort of thing, but is probably untenable to amend at this point.
Sure, its easy for people in NYC and San Francisco to say that nobody should compete for any of these jobs. They are going to get them anyway.
But the moment some other location tries to compete for that economic benefit, well now all of a sudden "their" jobs are being stolen by undeserving locations.
Yup. It's crazy that you can be a business operating in a certain jurisdiction and following all the rules and the government can just decide (based on backroom deals) that your biggest competitor now needs to pay no taxes. Literally legalized corruption. At minimum all such policies need to apply uniformly across the board.
I agree entirely - these sorts of subsidies can be extremely effective at uplifting job markets by, as an example, attracting a large company to build a manufacturing plant in a specific rural area that recently lost their main employer... To NYC even something as large as HQ2 is just a drop in the employment bucket.
> Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen.
1000x this. Every news story about these subsidies eventually becomes "we gave BigCorp a $5 billion tax break and they opened a facility that employs 50 people."
The subsidy was not to bring Amazon to Manhattan, it was to bring Amazon to Queens. The only reasonable places to commute to it is if you lived in NYC or Long Island, so most of the subsidy would have been paid back via taxes by the people working there. This doesn't include the construction jobs, restaurant and bar businesses, and real estate taxes that would be collected in the long term after the subsidy expired. I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much.
> I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much.
If you consider the fact that even before the deal fell apart people began buying up swaths of real estate in the area in preparation of pushing out her current constituents then I think she made the right move.
Her people are the blue collar workers of the district.
The previous rep who was the Democrats top connection to Wall Street didn't even live in the district. he lived in Virginia :talk about not representing their interests.
I was working for Amazon at the time, and lived in Boston. Everyone thought (naively?) that Boston was going to “win” - until Bezos bought a fancy mansion in DC. It was quite embarrassing to watch even still.
I’m still proud of our local government for publicly publishing their proposal, and not offering any major concessions. The proposal was basically “we have what you want, so come get it, we’re not gunna pay you”.
As I recall, the Boston location (Suffolk Downs) would not have been what the typical Amazon HQ worker would have envisioned as being in Boston. OK, there's some public transit but you're basically in a largely blue collar area north of the city. (So somewhat like the NYC proposal in that respect.)
It was even dumber than that. AOC is a federal representative that gave her personal opinion. She has no say on local laws, she can oppose 100% of the laws Mayor Adams and Governor Hochul sign, it doesn't mean they get cancelled, it just means she has a right to her opinion.
The local board that rejected Amazon had a separate set of members that decided to vote however they voted. They are also up for election completely independently, so they would have paid the price if locals disagreed with them (maybe they did, I didnt check)
The dumbest part of that circus is that NYC is probably the last city in the US that needs to "encourage" companies to open up shop and use its real estate.
And it's not like Amazon has brought nearly as many jobs to NYC as they planned to with HQ2.
This isn't necessarily to say that the calculus was wrong here -- New York is perhaps uniquely a place that doesn't really need a huge influx of Amazon jobs. But I think a lot of people misunderstood the HQ2 process as like "this was a unique and rare situation in which a local government applied tax incentives to get a corporation to open a major facility there." It wasn't. That's very routine. What was unique and rare about the HQ2 process was how public it was.
The poor people living in public housing around LIC overwhelmingly favored the project which was going to bring new public spaces, upgrades to schools, and affordable housing. None of that got built and instead the new office lease happened in Hudson Yards where none of the poor LIC residents will benefit at all.
She similarly helped kill a redevelopment in Industry City that included a bunch of affordable housing and light manufacturing jobs. Those jobs didn't go somewhere else in the city.
Wikipedia seems to dispute any notion that the people of LIC are abnormally poor:
> As of 2017, the median household income was $66,382 in Community Board 1[47] and $67,359 in Community Board 2.[48] In 2018, an estimated 18% of Community Board 1 and 20% of Community Board 2 residents lived in poverty, compared to 19% in all of Queens and 20% in all of New York City. The unemployment rate was 8% in Community Board 1 and 5% in Community Board 2, compared to 8% in Queens and 9% in New York City. Rent burden, or the percentage of residents who have difficulty paying their rent, is 47% in Community Board 1 and 51% in Community Board 2, slightly lower than the citywide and boroughwide rates of 53% and 51% respectively. Based on this calculation, as of 2018, northern LIC is considered to be gentrifying, while southern LIC is considered to be high-income relative to the rest of the city and not gentrifying.[43]: 7 [44]: 7
For what it's worth, my sister-in-law lives there (in a $4 million brownstone) and I visit with my wife for New Year's Eve every year. There may or may not be a ton of high-paying jobs literally in Long Island City, but it's on the bank of the East River, a two-minute train ride from Manhattan, maybe ten from Hudson Yards. They're probably better off converting all those old bottling plants to residences rather than office space anyway.
Also, not that she shouldn't care about LIC to whatever extent all people should care about other people, but AOC's district does not include LIC.
walking to work easily beats walking to the 7 and then to work, even if it's a short ride. imo NYC as a whole would greatly benefit from spreading office locations more evenly across the boroughs. if nothing else, it would help smooth one-way peaks for the subway.
that said, I don't really understand the desire to put a major hub in LIC from amazon in the first place. it's a nice place, but the recruitment base for a location in LIC must be a lot lower than in midtown or hells kitchen. that would be a dealbreaker for lots of folks that currently commute from JC, Edison, etc.
It's funny how the biggest complaint from residents of Long Island, Astoria, Downtown Brooklyn, Williamsburg etc. is that their neighborhoods are getting gentrified and unaffordable, and on the other end politicians argue that big corporations need to be paid billions of dollars in incentives to come "save" them.
No one is saying that real estate development is suffering. I pointed out correctly that the original proposal included investment in public amenities and schools that aren't happening.
The vast majority of the proposed Amazon tax breaks were longstanding, pre-existing programs that were available to any company who fulfill the requirements. Most, like REAP and Excelsior, remain available today.
Yeah NYC doesn’t need to offer subsidies because it already has what Amazon wants, lots of highly educated young people who want to work in tech.
Most places don’t already have that (or at least not enough of it) and so it could make sense to offer short term subsidies in exchange for long term industry presence.
Everyone called it when Amazon was shopping HQ2 around and NYC told them to get bent. Completely predictable. Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back.
I used to work in film, although not in the accountancy/deal-making aspect. Film tax breaks are direct discounts on money spent. If you make a film in Georgia, for example, you get a transferable tax credit (20-30%) on money spent in the state. It's a short term deal (productions usually only last a few months), and is immediate in effect. There's no "spend a billion of public money and maybe we'll hire some people" shenanigans like the Foxconn plant in Wisconsin.
I have friends who work in film and have heard about the way the productions play fast and loose with "local hires" that then get reported as jobs created.
The prestige of films being made in their state keep the subsidies rolling in but there are many great "bang for your buck" subsidies states could be making that just aren't sexy.
These studies seem to focus primarily on the direct economic impact of moviemaking, but seem to not deal at all with tourism effects - and these can be significant, from benign tourism like with Star Wars [1] to outright madness like with the Breaking Bad house [2].
Yea that's fair, but I would imagine the tourism effect, although real, happens for a tiny % of overall productions.
Much like incentives for NFL stadiums, it just doesn't seem like the public gets the benefit they are promised in all the glossy announcement spreads
And to be clear I support the government subsidizing the arts like film and I miss when my state had a subsidy and a lot of famous shows/movies were filmed in places I knew. I just haven't seen the data to back up the "impact" claimed.
Having worked in film in the US, I developed a deep hatred of film tax breaks because they work. "Work" in the sense that studios will chase them, and they make it harder for companies outside a tax-advantaged location to compete and make money.
I know of multiple teams where 50% of the team were nominally HQ2/Virginia employees and 50% were distributed around the country last spring.
Folks on these teams speculated that the Return To Hub push was specifically thought of to meet HQ2 incentives.
None of the distributed employees ended up in Virginia. They all found local teams internally or left Amazon. When high performer leaves a team it’s common for others to leave since it breaks the ice. Lots of these teams then lost local talent to companies with less strict in-office requirements.
Markets are gonna communicate information whether you like it or not.
I hope one day we realize businesses tend to care more about increasing profits than increasing jobs...and that sometimes the easiest way to increase profits is to decrease jobs.
I think we in society really need to evaluate this...maybe instead of forcing companies to create jobs, we can think of another way for humans to have money. Some humans make money not from working a job but from ownership, getting dividends from that. What if we could change the way we do or view ownership and people get dividends from that? Haha, maybe I'm just reinventing the stock market, but not all stocks give dividends.
Maybe instead of asking companies to create jobs, we should ask them to give more dividends?
I'm curious to hear your thoughts to this dilemma of us asking conpanies to create jobs and how that might make them less efficient.
There have been many studies to determine the return on investment when governments subsidize private companies. AFAIK the time the ROI was positive was when the subsidy enabled trade to an “outside” partner that would not have happened otherwise. Think international airport or shipping port that created a new trade route. Of course if that trade route already exists in a different form, then you are throwing away money.
You're attempting to mix social policy and business goals. I don't believe they should be mixed. It's not incumbent on business owners to blindly increase the number of jobs they have, and if you encourage them to do so, you're just allowing one company to monopolize the labor market, which has incredibly negative effects.
What I worry about is how to increase the number of small businesses and the number of people working for themselves.
One of the biggest reasons for layoffs is investor pressure to increase shareholder value.
You basically already have to be rich(maybe not HN rich) for dividends to have any real difference in your life. You have to be fantastically rich for your dividend ownership to have any influence on the company.
At the current level and concept of dividends, yes. I guess I was just thinking more broadly on the idea of profit sharing, maybe it involves changing the way we look at ownership. Alaska has a permanent fund that receives money I think from oil and pays each if its citizens a part of that money. In my view, that's as if each Alaskan citizen "owns" a part of the oil industry there and received profit sharing. I think something similar might happen in the UAE.
So I'm curious what a different concept of dividend/profit sharing might look like where it can help those who aren't the medium or super rich.
>Its application last April said the company had hired 6,939 employees for qualifying jobs, out of 8,000 total positions in Arlington. Amazon’s report this year said it had filled 6,644 qualifying jobs and had 7,791 total employees assigned to HQ2.
>Virginia’s incentives for the company are supposed to reward its progress toward a goal of bringing 25,000 new jobs to Arlington by 2030. They are also structured to ensure that the company maintains those new jobs for at least five years.
They have 6 years to fill ~20,000 jobs. Seems pretty doable once they scale up hiring again.
As a New Yorker, these "subsidies for jobs" programs never work. Yet we keep doing them. The last time I ran the numbers, NYS was paying Tesla/Panasonic 110k per year per job, yet the jobs only paid 45k.
As a local resident, I’m quite pleased with the whole thing. The incentives are gated by actual performance… if Amazon doesn’t do stuff, we don’t pay. In the meantime, lots of incentives were in-kind infrastructure improvements that we really needed to do anyway. What Amazon has already built is nice and fits in with the neighborhood.
While it might sound overly cynical, and it probably is, you can place a pretty good even odds bet on "whatever a corporation says to get governmental favor will happen in the opposite direction". Double your stake if that favor is "a tax break"
No, but it does mean that AMZN almost certainly won't get any taxpayer money for this checkpoint(the payments are spread out, but for the jobs of several years ago- they can be paid until late 2026 based off their paperwork filed in back in April 2023, etc.). They didn't even ask for any, actually- they filed a "Progress Report" rather than a formal application for taxpayer money. This is the first time they missed on the hiring numbers agreed to- up until this report they had always been ahead of the agreed upon hiring schedule.
The incentives were tied to the job creation. So if they bring fewer jobs to the area, they get less money from the government, automatically. It was part of the contract
Hq2 itself is about twice the size of the large HQ1 buildings (re:invent, Doppler) but it’s only one(ish) building. Amazon owns like 35% of Seattle downtown real estate
Seattle proper != King County. Amazon is building out big across the lake in Bellevue. It's Seattle's local municipal government that's gone rabidly anti-business more than the county or state as a whole, although Washington is never going to be confused with a purple state anymore after the last 5-10 years.
Amazon is not the only F500 to be divesting headcount within Seattle city limits in favor of elsewhere in the metro area.
I still remember the circus around HQ2 and how so many politicians (most prominently AOC) were dragged in the media and online forums for not bowing down to Amazon and being "anti jobs". Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works.
What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
>> What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
Could you elaborate on the argument here -- are you suggesting that if a job has a potential for future loss, it is just better to not create the job at all? If I was mayor, i'd be happy to take a high-paying job in my locality even if it isn't perpetual. The key would be to tie incentives to actual payroll. Subsidy disappears as soon as the job disappears.
But guaranteeing perpetual jobs is something no organization can do, not even governments.
AOC was against the subsidies. No one is stopping Amazon from creating jobs and then then getting rid of them when they hit a downturn. The issue was the subsidies provided and if companies can be held accountable.
Virginia paid $750M in subsidies for Amazon HQ2 to bring 2500 high paying jobs in 2023 and Amazon did not reach that goal. They'll probably miss the 2024 mark too. What recourse does Virginia have?
The "subsidies" in this case in NYC were a tax rebate over 10 years tied directly to the number of positions created. The Empire program itself was meant to incentivize new offices to open in boroughs other than Manhattan to help distribute the load on transit and other services. Any company opening new office space was eligible, not just Amazon.
The only real "subsidy" in the NYC deal was a land grant where an old plastics factory used to be that required significant environmental clean up. The land is also next to the notorious Queensbridge projects.
Really considering we mostly work in this industry, the amount of ignorance surrounding the deal, its incentive structure, and how it went up in flames is staggering.
Even the talking point about how Amazon opened up new NYC offices anyways is completely innumerate, so far they've created about 1/5th of the positions that they were projected to create under the HQ2 proposal.
So the original proposal was to create 25K jobs over 15+ years, and the fact that they have created "only" 1/5 the jobs in ~5 years with zero subsidies is supposed to be a negative? Especially considering that they are in the middle of layoffs and not even hitting their committed HQ2 goals.
>> So the original proposal was to create 25K jobs over 15+ years, and the fact that they have created "only" 1/5 the jobs in ~5 years with zero subsidies is supposed to be a negative?
How is this obviously not bad!? Arent most of us technologists here? How is creating 1 job better than creating 5 high paying jobs? Can anyone currently unemployed chime in on whether you prefer having high paying jobs available vs not having them available?
Still innumerate I see. 1/5th of the projected rate.
Besides, the program is structured such that they wouldn't get the rebate if they didn't hire so what does it matter?
Spot on. This article is just click bait then and doesn’t mention the subsidy is strictly job based. This article goes into detail:
https://www.washingtonpost.com/dc-md-va/2023/04/13/amazon-hq...
Overall, Amazon did request $152M in April 2023 for the 6939 jobs it created. They didn’t request any money thru COVID and that $152M will be paid late 2026. Amazon has also paused building due to WFH and maybe realizing they don’t need another HQ. Overall, I would say this thing will stall for the next few years. There is an opportunity cost related to other businesses being offered those same subsidies and are growing. Alas, that can’t be measured.
> Amazon has also paused building due to WFH and maybe realizing they don’t need another HQ
Working at AWS I had teammates hired as remote for a team that was distributed across various regions, and we were given a mandate to either "return" to an office (including potentially having to move if one of the ones assigned to the team) or "voluntarily" leave (with no severance). I'm not saying that they didn't realize they didn't need as much real estate overall, but WFH is not the reason because it largely doesn't exist anymore at Amazon.
I think you are both right? amazon did pause or at least slow building due to WFH, during the pandemic. now WFH is over, but they are still doing layoffs. obviously both are sensitive subjects, but it doesn't make sense to immediately resume large construction projects while headcount is trending downward.
there's one more factor being missed here. obviously they won't say so publicly, but there's a case to be made that the entire HQ2 was as much about calling Seattle's bluff as it was about establishing a second company HQ for its own sake. now that that particular piece of legislation has been repealed, there's not as much reason to follow through on the original plan for HQ2. see: https://en.m.wikipedia.org/wiki/Seattle_head_tax
What happens if you just decided not to move? That voluntarily leave would need to become a firing with notice pay and severance.
you would have the opportunity to argue whether you were fired for cause (which determines eligibility for unemployment insurance). in general that's hard to win if you just don't show up to your assigned work location, but there may be grounds to argue that mandatory relocation beyond a certain distance constitutes constructive dismissal.
but notice pay and severance are not mandatory for at will employees. the company basically gets to decide whether it's worth paying you not to sue them.
I imagine they'd just stop paying you and not give you any severance, putting the ball in your court to initiate any legal actions to try to force them to pay severance.
> tax rebate
Why are you putting subsidiy in quote if they got a tax rebate?
Because the rebate was conditional on sustained hiring and not a grant like the political rhetoric would have most believe.
Essentially the state was rebating the corporate tax they would have received in lieu of the income tax revenue obtained from the new positions along with the increased competition for high paying tech roles in the city.
The program was deliberately structured to be revenue neutral in terms of absolute tax revenue while increasing overall tax revenue by increasing state GDP
I'm not sure what you mean by political rhetoric. Are you saying calling it a subsidy would be misleading (?) because it was given on a condition? That seems a bid odd because subsidies often comes with conditions attached.
> Virginia paid $750M in subsidies for Amazon HQ2 to bring 2500 high paying jobs in 2023.
Wrong. Virginia approved up to $750M in subsidies for Amazon should Amazon meet the terms.
> What recourse does Virginia have?
All they have to do is abide by the agreement because Amazon has to make the case each year to receive that year's subsidy.
Person below commented they already went down from 50K jobs promised to 25K and that $750M is still sitting pretty. The terms are also flexible and over 15+ years so they can keep making false promises kicking the can down the road.
Not hard to imagine Amazon got a favorable deal concerning the subsidy stipulations due to all the competing bids for HQ2.
No need to imagine -- the deal is linked in the WP article.
https://d39w7f4ix9f5s9.cloudfront.net/a1/f2/85b7a8db41379e15...
From my reading, it seems pretty reasonable.
(1) Here's what Virginia and Amazon agree to. (2) Here's how it will be measured. (3) Here are the terms around payments.
The VA numbers were always based on 25k jobs.
Minimum 25,000 Phase 1 Jobs ($550M allocated) and 12,850 Phase 2 Jobs ($200M allocated)
How does that make any sense? 750M / 2500 is 300k. It's just better to do helicopter money - literally just drop money from the skies and I would bet that more would be generated in return.
Assuming that Gemini is right and Virginia keeps 5-6% of your taxable income, individuals should earn at least 5M just for break even. I don't understand this model - can someone help make sense?
Pretty sure they missed a 0. They were meant to bring 25,000 jobs (which itself was scaled back from the 50,000 they had initially promised). Of course the problem with all such deals is that the timeline is always "flexible" (15+ years in this case), and even if the jobs are filled they will go away overnight if the company deems it better for their bottom line. Amazon has already cut 30,000+ corporate jobs in the last year and a half, and in his latest shareholder letter Jassy committed to continued "cost-cutting" across the company (https://www.cnbc.com/2024/04/11/amazon-ceo-andy-jassy-says-c...).
The actual terms of the deal is $22k subsidy per job. At the time of the deal the average salary for those jobs had to be $150k. That average salary requirement goes up each year. Last year it was $157k and next year $159k. The jobs also have to last 5 years in order for Amazon to get the payout. At those terms the state income tax in the salaries will more than pay for the subsidy over 5 years. That doesn’t include the additional tax revenue from the construction of HQ2. Additional tax revenue from service businesses and their employees which support either HQ2 or the employees working there.
300K is a one-time fee, but that high paying job will probably pay state taxes for years to come. Not to mention the extra taxes collected on that person renting, shopping, driving, etc. Amazon HQ2 might get other companies to make a HQ there too. There are benefits, but Amazon can't be held accountable for deals like these.
Don't forget all the sweet gentrification. /s
Well, it could build a sports facility for Ted Leonsis, and hope that that brings in jobs and dollars. But that didn't make it through the legislature.
He wanted VA to spend $2B to move the Wizards 8 miles.
> Could you elaborate on the argument here
It seems like you're trying to make this way more complex than it is.
From the perspective of a city:
Gaining quality high paying jobs without a large subsidy >> Gaining quality high paying jobs while paying a large subsidy.
That's what was argued and is correct. She knew the city was in a strong negotiation position and it was absurd to provide a subsidy.
AOC represents one district in Queens, not Manhattan or the entire city of New York. Her constituents do not benefit from Amazon relocating to Manhattan's West Side. Hudson Yards, where Amazon has rented space, received $6 billion in tax incentives, double the HQ2 package.
Further, most of the incentive programs that comprised Amazon's HQ2 package were pre-existing programs available to anyone, led by $1.2 billion from Excelsior Jobs, $897 million from REAP, both of which are still active programs open to any company meeting their requirements.
https://esd.ny.gov/excelsior-jobs-program
https://www.nyc.gov/site/finance/business/business-reap.page
>>> Could you elaborate on the argument here
>It seems like you're trying to make this way more complex than it is.
>From the perspective of a city:
>Gaining quality high paying jobs without a large subsidy >> Gaining quality high paying jobs while paying a large subsidy.
>That's what was argued and is correct. She knew the city was in a strong negotiation position and it was absurd to provide a subsidy.
Here is the actual equation we ended up with:
Gaining N high paying jobs without a large subsidy << Gaining 5N quality high paying jobs while paying a large subsidy paid if and only if 5N jobs created.
If the company is soliciting significant bribes from the state to create the job, then, er, yeah, arguably the state should _never_ engage in that sort of thing, but if it does then it should absolutely be looking for assurances that it's getting value for money.
I do think it's slightly surprising that the US doesn't really seem to have an equivalent to the EU's concept of "unlawful state aid", which shuts down a lot of this stuff before it starts.
What's crazier still is that Amazon made all state and local governments sign NDAs which stated that the bidding process and any other specifics could not be shared with the public. Officials nationwide read this and went "yup, sounds good!" Quite literally legalized corruption.
Jobs are not a commodity that has to be "created" at all. A job is just a demand for labor. Either the demand is there at market rate, or it's not.
>> Jobs are not a commodity that has to be "created" at all. A job is just a demand for labor. Either the demand is there at market rate, or it's not.
You are right, but missing the fact that the commodity can exist in location a vs location b. The argument for subsidies was to push to move the job to a specific location. As a tech worker in the NYC area, this would be awesome. It was an incredibly selfish decision by AoC and others to vanquish most of these jobs.
Also remember all the secondary and tertiary jobs (nannies, restaurants, dog-walkers) which were all lost along with the high paying tech jobs.
I think we should just be proud of her for acknowledging the existence of business cycles.
Are you implying that someone who graduated cum laude with a degree in economics and international relations would not understand business cycles?
I think we should openly admit
1. that organizations leverage and abuse these breaks
2. that its possible for layoffs to not impact the new teams and buildings pretty easily
3. that a single bad quarter shouldn't lead to layoffs esp from a company that literally is the poster child for not tanking share price when facing losses
Its weird to have this subtext or joke that AOC wouldn't understand business cycles. She's not the first or last politician to try and spend money on lasting change.
It's very easy to act righteous in hindsight, but she was skewered by the media for even acknowledging the existence of business cycles.
All it took was a pandemic, almost all offices in the entire United States closing for periods lasting between months and years, the widespread normalization of remote work as a direct consequence, the migration of tech workers away from high-COL metropolitan hubs, and mass layoffs across the entire tech industry.
This scam that is big-tech wasn't going to last anyway. It takes people outside the bubble to see it.
Corporate tax benefits should be tied to the number of payroll they have in that location in the quarter.
Corporate tax benefits shouldn't exist. The ones that make the news seem to be a corrupt bargain between corporations (which get huge tax breaks that the locality offering them will never recoup) and politicians (who get to campaign on "bringing jobs" or whatever while happily emptying the public coffers to make it happen).
From I understand, this is already the case for all these sort of incentive.
It's mentioned in the article, even with exact numbers.
What's the point of discussing this, when people don't read?
>> Since then Amazon has leased a ton of office space in NYC (including a large chunk of Hudson Yards, which is the priciest new development) and is expanding its presence in the city, all without the $6B+ in subsidies that Virginia and other states/cities across the country promised them. Funny how that works.
I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium. We are now post-pandemic, where office space in major cities sit empty, languishing, and sometimes entire buildings going bankrupt with no equity value left.
Of course Amazon is able to easily rent tons of office space in NYC _now_.
> I want to be fair here -- HQ2 was being discussed before the pandemic when office space was at a premium.
Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning there is no reason to be paying people to move into this premium, high-in-demand product. All the more proof that her and others saying the same thing were correct.
>> Which if office space was at a premium, then that means there was way more demand then there was supply. Meaning more people want it than the amount available. Meaning there is no reason to be paying people to get this premium high in demand product. All the more reason that her and others saying the same thing were correct.
The argument was the subsidies were going to be to build new office space in Long Island City in Queens, where there weren't many jobs. As a former Brooklyner, this seemed like a huge positive to me. Imagine not having to move to the West Coast for FAANG jobs! (Obviously this has substantially changed with the pandemic and FAANG jobs distributing across the coasts post pandemic)
The expansion happened in 2019 (https://www.cnbc.com/2019/12/09/amazon-to-lease-space-in-man...).
Businesses need to operate somewhere - if local governments stand strong we all win. If your local government caves to the wave of lobbying cocktail parties and PAC money injection, please vote them out.
The costs we levy on businesses to operate in the US are extremely affordable and fair - giving them further discounts and rebates does nothing but enrich investors.
> Businesses need to operate somewhere - if local governments stand strong we all win.
This is how you end up with the Rust Belt.
>This is how you end up with the Rust Belt.
The Rust Belt is proof positive of Big Business operating in a unrestrained environment. NAFTA, the move to China, and its ilk are a direct consequence of federal government overriding the will of the people. If there was any actual power at the local level any imports the got shipped overseas would have been slapped with tariffs. You shouldn't get unrestrained access to the largest market in the west while also ignoring the external costs.
It's a shame that along with the clause against bills of attainder, banning laws that are intended to solely harm a specific individual or group of individuals, the constitution didn't also ban bills of... abtainder (?) banning laws that are intended to solely _benefit_ a specific individual or groups of individuals.
Would be the best antidote to this sort of thing, but is probably untenable to amend at this point.
> If your local government caves
The local community actually wins.
Sure, its easy for people in NYC and San Francisco to say that nobody should compete for any of these jobs. They are going to get them anyway.
But the moment some other location tries to compete for that economic benefit, well now all of a sudden "their" jobs are being stolen by undeserving locations.
There is no 'stand strong' when the federal system encourages competition.
Maybe that's a good thing. But specifically not with regards to state subsidies.
They shouldn't be competed away at the demands of business, but used with purpose.
Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen.
Yup. It's crazy that you can be a business operating in a certain jurisdiction and following all the rules and the government can just decide (based on backroom deals) that your biggest competitor now needs to pay no taxes. Literally legalized corruption. At minimum all such policies need to apply uniformly across the board.
I agree entirely - these sorts of subsidies can be extremely effective at uplifting job markets by, as an example, attracting a large company to build a manufacturing plant in a specific rural area that recently lost their main employer... To NYC even something as large as HQ2 is just a drop in the employment bucket.
> Subsidies (or anything which quacks like a subsidy) should be regulated so this nonsense doesn't happen.
1000x this. Every news story about these subsidies eventually becomes "we gave BigCorp a $5 billion tax break and they opened a facility that employs 50 people."
..And theoretically that somewhere could be anywhere, even outside of the country.
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I can't vote anyone out, just ignoring all of this remains the optimal strategy for my own sanity.
The subsidy was not to bring Amazon to Manhattan, it was to bring Amazon to Queens. The only reasonable places to commute to it is if you lived in NYC or Long Island, so most of the subsidy would have been paid back via taxes by the people working there. This doesn't include the construction jobs, restaurant and bar businesses, and real estate taxes that would be collected in the long term after the subsidy expired. I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much.
> I do agree that AOC represented NJ, Connecticut, and Amazon's long term interests very well. Her district, not so much.
If you consider the fact that even before the deal fell apart people began buying up swaths of real estate in the area in preparation of pushing out her current constituents then I think she made the right move.
Her people are the blue collar workers of the district.
The previous rep who was the Democrats top connection to Wall Street didn't even live in the district. he lived in Virginia :talk about not representing their interests.
I was working for Amazon at the time, and lived in Boston. Everyone thought (naively?) that Boston was going to “win” - until Bezos bought a fancy mansion in DC. It was quite embarrassing to watch even still.
I’m still proud of our local government for publicly publishing their proposal, and not offering any major concessions. The proposal was basically “we have what you want, so come get it, we’re not gunna pay you”.
As I recall, the Boston location (Suffolk Downs) would not have been what the typical Amazon HQ worker would have envisioned as being in Boston. OK, there's some public transit but you're basically in a largely blue collar area north of the city. (So somewhat like the NYC proposal in that respect.)
It was even dumber than that. AOC is a federal representative that gave her personal opinion. She has no say on local laws, she can oppose 100% of the laws Mayor Adams and Governor Hochul sign, it doesn't mean they get cancelled, it just means she has a right to her opinion.
The local board that rejected Amazon had a separate set of members that decided to vote however they voted. They are also up for election completely independently, so they would have paid the price if locals disagreed with them (maybe they did, I didnt check)
The dumbest part of that circus is that NYC is probably the last city in the US that needs to "encourage" companies to open up shop and use its real estate.
I mean, it's not like NYC didn't give Amazon tax credits for their recent expansions in NYC. For example: https://news.bloombergtax.com/daily-tax-report/amazon-gets-1...
And it's not like Amazon has brought nearly as many jobs to NYC as they planned to with HQ2.
This isn't necessarily to say that the calculus was wrong here -- New York is perhaps uniquely a place that doesn't really need a huge influx of Amazon jobs. But I think a lot of people misunderstood the HQ2 process as like "this was a unique and rare situation in which a local government applied tax incentives to get a corporation to open a major facility there." It wasn't. That's very routine. What was unique and rare about the HQ2 process was how public it was.
NY != NYC
Amazon needs NYC more than NYC needs Amazon.
Amazing that so many supply-and-demand aficionados couldn't see that.
> politicians (most prominently AOC) were dragged
The poor people living in public housing around LIC overwhelmingly favored the project which was going to bring new public spaces, upgrades to schools, and affordable housing. None of that got built and instead the new office lease happened in Hudson Yards where none of the poor LIC residents will benefit at all.
She similarly helped kill a redevelopment in Industry City that included a bunch of affordable housing and light manufacturing jobs. Those jobs didn't go somewhere else in the city.
Wikipedia seems to dispute any notion that the people of LIC are abnormally poor:
> As of 2017, the median household income was $66,382 in Community Board 1[47] and $67,359 in Community Board 2.[48] In 2018, an estimated 18% of Community Board 1 and 20% of Community Board 2 residents lived in poverty, compared to 19% in all of Queens and 20% in all of New York City. The unemployment rate was 8% in Community Board 1 and 5% in Community Board 2, compared to 8% in Queens and 9% in New York City. Rent burden, or the percentage of residents who have difficulty paying their rent, is 47% in Community Board 1 and 51% in Community Board 2, slightly lower than the citywide and boroughwide rates of 53% and 51% respectively. Based on this calculation, as of 2018, northern LIC is considered to be gentrifying, while southern LIC is considered to be high-income relative to the rest of the city and not gentrifying.[43]: 7 [44]: 7
For what it's worth, my sister-in-law lives there (in a $4 million brownstone) and I visit with my wife for New Year's Eve every year. There may or may not be a ton of high-paying jobs literally in Long Island City, but it's on the bank of the East River, a two-minute train ride from Manhattan, maybe ten from Hudson Yards. They're probably better off converting all those old bottling plants to residences rather than office space anyway.
Also, not that she shouldn't care about LIC to whatever extent all people should care about other people, but AOC's district does not include LIC.
walking to work easily beats walking to the 7 and then to work, even if it's a short ride. imo NYC as a whole would greatly benefit from spreading office locations more evenly across the boroughs. if nothing else, it would help smooth one-way peaks for the subway.
that said, I don't really understand the desire to put a major hub in LIC from amazon in the first place. it's a nice place, but the recruitment base for a location in LIC must be a lot lower than in midtown or hells kitchen. that would be a dealbreaker for lots of folks that currently commute from JC, Edison, etc.
> but AOC's district does not include LIC.
Yeah, exactly. My point is that the project included a lot of community upgrades paid for by Amazon that now won't happen at all.
Long Island City is doing just fine.
https://archive.is/gRA45
It's funny how the biggest complaint from residents of Long Island, Astoria, Downtown Brooklyn, Williamsburg etc. is that their neighborhoods are getting gentrified and unaffordable, and on the other end politicians argue that big corporations need to be paid billions of dollars in incentives to come "save" them.
No one is saying that real estate development is suffering. I pointed out correctly that the original proposal included investment in public amenities and schools that aren't happening.
You sure about that?
https://patch.com/new-york/astoria-long-island-city/long-awa...
To my knowledge and based on some additional searching, that old office building is still sitting there and construction hasn't started.
Hudson Yards itself received $6 billion in tax breaks and incentives.
https://www.nytimes.com/2019/03/09/nyregion/hudson-yards-new...
The vast majority of the proposed Amazon tax breaks were longstanding, pre-existing programs that were available to any company who fulfill the requirements. Most, like REAP and Excelsior, remain available today.
https://news.ycombinator.com/item?id=19178187
AOC was right, like she usually is. Regarless, she didn't have any decision making power in this case, only soft power.
Yeah NYC doesn’t need to offer subsidies because it already has what Amazon wants, lots of highly educated young people who want to work in tech.
Most places don’t already have that (or at least not enough of it) and so it could make sense to offer short term subsidies in exchange for long term industry presence.
https://archive.ph/0Tue6
shocked pikachu face
Everyone called it when Amazon was shopping HQ2 around and NYC told them to get bent. Completely predictable. Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back.
> Never make incentive deals with megacorps unless it's for the film industry. They know how to scratch someone's back.
What kind of "back scratching" does the film industry do and why should I like it?
Speaking of "incentive deals with megacorps", how about those sports stadium deals?
At least the govt officials get tickets, right?
I used to work in film, although not in the accountancy/deal-making aspect. Film tax breaks are direct discounts on money spent. If you make a film in Georgia, for example, you get a transferable tax credit (20-30%) on money spent in the state. It's a short term deal (productions usually only last a few months), and is immediate in effect. There's no "spend a billion of public money and maybe we'll hire some people" shenanigans like the Foxconn plant in Wisconsin.
I have friends who work in film and have heard about the way the productions play fast and loose with "local hires" that then get reported as jobs created.
But setting aside all of that research shows little to no impact https://www.nber.org/papers/w25963 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3155407
The prestige of films being made in their state keep the subsidies rolling in but there are many great "bang for your buck" subsidies states could be making that just aren't sexy.
These studies seem to focus primarily on the direct economic impact of moviemaking, but seem to not deal at all with tourism effects - and these can be significant, from benign tourism like with Star Wars [1] to outright madness like with the Breaking Bad house [2].
[1] https://edition.cnn.com/travel/article/star-wars-destination...
[2] https://ew.com/tv/2017/10/13/breaking-bad-house-pizza-throwi...
Yea that's fair, but I would imagine the tourism effect, although real, happens for a tiny % of overall productions.
Much like incentives for NFL stadiums, it just doesn't seem like the public gets the benefit they are promised in all the glossy announcement spreads
And to be clear I support the government subsidizing the arts like film and I miss when my state had a subsidy and a lot of famous shows/movies were filmed in places I knew. I just haven't seen the data to back up the "impact" claimed.
Having worked in film in the US, I developed a deep hatred of film tax breaks because they work. "Work" in the sense that studios will chase them, and they make it harder for companies outside a tax-advantaged location to compete and make money.
Why should my money go to someone who is providing services to a movie company.
I know of multiple teams where 50% of the team were nominally HQ2/Virginia employees and 50% were distributed around the country last spring.
Folks on these teams speculated that the Return To Hub push was specifically thought of to meet HQ2 incentives.
None of the distributed employees ended up in Virginia. They all found local teams internally or left Amazon. When high performer leaves a team it’s common for others to leave since it breaks the ice. Lots of these teams then lost local talent to companies with less strict in-office requirements.
Markets are gonna communicate information whether you like it or not.
I hope one day we realize businesses tend to care more about increasing profits than increasing jobs...and that sometimes the easiest way to increase profits is to decrease jobs.
I think we in society really need to evaluate this...maybe instead of forcing companies to create jobs, we can think of another way for humans to have money. Some humans make money not from working a job but from ownership, getting dividends from that. What if we could change the way we do or view ownership and people get dividends from that? Haha, maybe I'm just reinventing the stock market, but not all stocks give dividends.
Maybe instead of asking companies to create jobs, we should ask them to give more dividends?
I'm curious to hear your thoughts to this dilemma of us asking conpanies to create jobs and how that might make them less efficient.
There have been many studies to determine the return on investment when governments subsidize private companies. AFAIK the time the ROI was positive was when the subsidy enabled trade to an “outside” partner that would not have happened otherwise. Think international airport or shipping port that created a new trade route. Of course if that trade route already exists in a different form, then you are throwing away money.
You're attempting to mix social policy and business goals. I don't believe they should be mixed. It's not incumbent on business owners to blindly increase the number of jobs they have, and if you encourage them to do so, you're just allowing one company to monopolize the labor market, which has incredibly negative effects.
What I worry about is how to increase the number of small businesses and the number of people working for themselves.
>ask them to give more dividends?
One of the biggest reasons for layoffs is investor pressure to increase shareholder value.
You basically already have to be rich(maybe not HN rich) for dividends to have any real difference in your life. You have to be fantastically rich for your dividend ownership to have any influence on the company.
At the current level and concept of dividends, yes. I guess I was just thinking more broadly on the idea of profit sharing, maybe it involves changing the way we look at ownership. Alaska has a permanent fund that receives money I think from oil and pays each if its citizens a part of that money. In my view, that's as if each Alaskan citizen "owns" a part of the oil industry there and received profit sharing. I think something similar might happen in the UAE.
So I'm curious what a different concept of dividend/profit sharing might look like where it can help those who aren't the medium or super rich.
Companies used to sometimes offer direct profit sharing. Stocks became a preferable vehicle over time.
For an alternative model, worker coops would be the most straight forward.
>Its application last April said the company had hired 6,939 employees for qualifying jobs, out of 8,000 total positions in Arlington. Amazon’s report this year said it had filled 6,644 qualifying jobs and had 7,791 total employees assigned to HQ2.
>Virginia’s incentives for the company are supposed to reward its progress toward a goal of bringing 25,000 new jobs to Arlington by 2030. They are also structured to ensure that the company maintains those new jobs for at least five years.
They have 6 years to fill ~20,000 jobs. Seems pretty doable once they scale up hiring again.
As a New Yorker, these "subsidies for jobs" programs never work. Yet we keep doing them. The last time I ran the numbers, NYS was paying Tesla/Panasonic 110k per year per job, yet the jobs only paid 45k.
This one is working out fine for VA since they don't have to pay anything now.
Unless you get guarantees in a contract which Amazon would never give :p
As a local resident, I’m quite pleased with the whole thing. The incentives are gated by actual performance… if Amazon doesn’t do stuff, we don’t pay. In the meantime, lots of incentives were in-kind infrastructure improvements that we really needed to do anyway. What Amazon has already built is nice and fits in with the neighborhood.
Really it’s all a tempest in a teapot.
So glad Amazon picked Virginia to announce their HQ2, causing the already-unsustainable price of housing in NoVA to skyrocket even further.
While it might sound overly cynical, and it probably is, you can place a pretty good even odds bet on "whatever a corporation says to get governmental favor will happen in the opposite direction". Double your stake if that favor is "a tax break"
Does that mean the city/county/state can go after them?
No, but it does mean that AMZN almost certainly won't get any taxpayer money for this checkpoint(the payments are spread out, but for the jobs of several years ago- they can be paid until late 2026 based off their paperwork filed in back in April 2023, etc.). They didn't even ask for any, actually- they filed a "Progress Report" rather than a formal application for taxpayer money. This is the first time they missed on the hiring numbers agreed to- up until this report they had always been ahead of the agreed upon hiring schedule.
The incentives were tied to the job creation. So if they bring fewer jobs to the area, they get less money from the government, automatically. It was part of the contract
Read the article first please.
Still a better deal than Wisconsin got out of Foxconn.
And there is 0 accountability for misleading marketing claims and the people that supported it.
Totally forgot about HQ2 - is it even anywhere close to the size of Seattle HQ at this point?
Hq2 itself is about twice the size of the large HQ1 buildings (re:invent, Doppler) but it’s only one(ish) building. Amazon owns like 35% of Seattle downtown real estate
No matter the number, it is currently shrinking: https://news.theregistryps.com/amazon-opts-not-to-renew-2090..., https://www.businessinsider.com/amazon-expects-save-1-3-bill...
Seattle proper != King County. Amazon is building out big across the lake in Bellevue. It's Seattle's local municipal government that's gone rabidly anti-business more than the county or state as a whole, although Washington is never going to be confused with a purple state anymore after the last 5-10 years.
Amazon is not the only F500 to be divesting headcount within Seattle city limits in favor of elsewhere in the metro area.
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