Communities Are Paying Amazon to Set Up Shop. It Should Be the Other Way Around.

Janine Jackson: It’s meaningful that Amazon’s head, Jeff Bezos, also owns The Washington PostPaper sometimes has to be folded. remindedTo disclose this relationship to readers as they run stories like “Jeff Bezos Blasts Into Space on Own Rocket: ‘Best Day Ever!’” — buttressed by op-eds like “The Billionaires’ Space Efforts May Seem Tone-Deaf, but They’re Important Milestones.”

The difficult reality is that Bezos doesn’t need to outright own a news outlet to get coverage that undergirds his worldview that, yes, it makes sense for a man to launch himself into space while some of his employees rely on public assistanceto feed themselves and face every day. underhanded obstacleIf they attempt to organize, and for a business that contains these contradictions to be called a wild economic success.

Corporate news media aren’t the first place to look for critical examinations of corporate capitalism, but they do present themselves as watchdogs of the public interest, and especially public spending: the “cost to taxpayers.” If that’s true, a hard look at public subsidies to Amazon should be compelling stuff.

Greg LeRoy, executive Director of Good Jobs FirstThe group behind the #EndAmazonSubsidies campaign. He calls us from Maryland to join us now. Greg LeRoy, Welcome Back to CounterSpin

Greg LeRoy: Thanks, Janine. It was great to be there.

Simply put, how can you explain to people what the #EndAmazonSubsidies campaign aims at?

I think everyone now understands that Amazon is metastasizing. It’s now the No. It’s now the No. 1 retailer by dollar volume in America, having surpassed Walmart just a few years back. It’s massively growing its warehouse network, because pandemic deliveries surged. Hundreds of new warehouses were added during the pandemic.

As if Amazon was ever a small company 20 years ago, and might have needed some help, we’ve passed that Rubicon eons ago, right? This is a very aggressive, very rapidly growing company, with lots of other tentacles that people don’t know very much about, like cloud computingFashion, movies, groceries, and many other things.

But this month marks ten years since the company established a part of its Public Policy department. This was to help the company get tax breaks because it was now in a growth phase and would need to build many warehouses near every major market with lots Prime households. They wanted to be paid to do that. The company has already raked in more than $4.1 Billion dollars, mostly for warehouses and data centers, but mostly warehouses throughout the country. And we think that’s nuts.

It’s money coming from public coffers to support what is not a fledgling, struggling business that requires that kind of lift.

Amazon is a firm believer that tax avoidance is not an accident. It’s always been a conscious part of their model. You’re talking now about moving from tax avoidance to subsidies, but from the get-go, they have not been interested in supporting the state or the community that they function within.

That’s exactly right. And it’s not wrong to think of these economic development incentives or subsidies as another form of tax avoidance, because it means you’re avoiding paying your property taxes for 10 or 20 years. It means you’re not paying sales tax on your new building materials and machinery and equipment. This could mean you get an income tax credit back because you have invested X dollars and hired X people. Many of these deals offer multiple tax breaks that are not the same as what a family would pay.

Then, from the community, the government view, and I saw Kenneth Thomas quoted here reportIn Vice, it’s worth just saying it out loud, that the money that these communities are giving to Amazon, they could have put into education or healthcare or infrastructure or a million other things.

That’s exactly right. Education is, by far, the most expensive local public service and the one that is often the biggest dollar loser. But everything that takes place at the local level — county public health programs, infrastructure, whether or not we’re going to reduce class size or have pre-kindergarten classes — all those things are affected by the amount of money available. And when a big company comes in like Amazon and doesn’t pay much, if anything, toward all the growth that’s being induced, guess who gets socked with lousier public services and higher taxes?

And that’s not even to mention the displacement or the harm to smaller and local businesses who just can’t compete because they’re paying their taxes. They’re not getting the same kind of break, necessarily, that a behemoth like Amazon is able to finagle.

That’s right. We’ve been saying for years, communities and states should not pay Amazon to arrive. It should be the reverse. Amazon should pay for the privilege of arriving, because of the damage it’s going to do to the local economies.

Another aspect of the story ShouldThe secretiveness is what makes reporters swoon. The Chicago Tribune ran a piece by Pat Garofalo from the American Economic Liberties Project about how, for instance, when Amazon got more than $100 million in tax breaks in 2020 from a village in Illinois, they demanded that the trustees wouldn’t disclose that Amazon was behind the deal until the deal was basically a foregone conclusion, so the community didn’t get to weigh in on this massive deal. What’s up with that?

The same thing happens with the other. happened in Fort Wayne, Indiana, right next door, where in the first-phase tax abatement, the council literally didn’t know they were approving a property tax abatement for Amazon. And then on the second bite, by the time the company’s name had come out, they voted it down, but the company stayed anyway, despite a threat.

I think Amazon knows there’s something wrong with this. They’ve gotten more secretive in recent years. We’ve noted that. Our tracker on our website has multiple lines now saying, “amount unknown” or “amount incomplete,” because they were working very aggressively with public officials to try to cover up something. They might feel dirty about it. I can only speculate.

Sunlight is, of course, the best disinfectant. Just a note: Chicago Tribunepiece: Garofalo also mentioned that in the case he was discussing, funds came from disproportionately Black neighborhoods. And that’s another problem with these nondisclosure agreements: Corporations can make different demands of different localities, and some might have to pay more to host a facility than others, but they don’t know that, because it’s all shrouded in secrecy.

Yes, and Amazon’s classic secretive whipsawing of communities against each other, putting public officials in what’s known as a “prisoner’s dilemma” in game theory, where they don’t know who they’re competing against, they don’t know if what the company is telling them is truthful about bids from other places. This is a fantastic situation in the case Pat was referring too. investigationBy WBEZ radio in Chicago and something called the Better Government Association where they really dug in and found very sharp racial disparities between the company’s treatment of different communities.

A storyOn CBS MoneywatchYour work, Good Jobs First, was cited last year as well as the critique of Amazon subsidies. And they had a counter, not much of one, but sort of halfway through the piece, it says, “Amazon defends its use of subsidies, pointing to its hiring record and saying that the tax breaks are available to all companies.” What do you say?

You know, it’s not wrong to say that too many of these tax breaks are available to too many companies. But that’s a big, structural, recurring problem we’ve been screaming about for 20 years. The problem is that once you make any program, such as an abatement or near-automatic program, or a tax incentive financing district or enterprise zone, then no doubt, wealthy companies with armies full of accountants, tax experts, and consultants will be able to grab whatever money is available. That’s the big structural problem with incentives these days.

That doesn’t make it a good thing, you know?

Right. Exactly. That’s an excuse.

And I understand, in a cynical manner, why Amazon or any company wants to scrounge, scrape, withhold in order keep every dime. What I don’t understand is how anyone can make that part of their free enterprise fairy tale, like it’s a better mousetrap, and if you work real hard, you can do it too. That’s the part I object to. Amazon is doing something that only Amazon can do at the moment.

I guess what I’m saying is, I don’t understand why this is presented as an example of capitalism working as it should: You know, someone’s got a great idea, and was able to make it bigger and bigger and bigger. They then launch themselves into space.

Yes, I agree. If you look at the comments on some articles, you will see that there are many people who ask, “What are you belly-aching for?” This is capitalism. It’s what everyone does. However, I think it also suggests that capitalism can be fragile.

I mean, you look at developers who always expect breaks — of many different kinds, not just retail developers — and you ask yourself, if these things just weren’t legal, if they expected to pay full freight for coming in, they would still do it, right? The markets are still there, there is still spending power, and jobs still need to exist, regardless of the project. We’ve allowed companies to just assume they’re not going to pay to arrive. And I think that’s a real weakness in both public policy, but also corporate mentality.

And haven’t there been instances where communities have said, they think Amazon would have located the warehouse there for basic economic reasons even without the subsidy? So it was not just not necessary for it to go into Amazon‘s coffers, they had reasons to locate there outside of that…

We have a lot evidence. We have an interactive story map on our website where we updated it with all the new pandemic warehouses, and the recurring theme is proximity to affluent zip codes with lots of Prime households, although not in the Prime households, because land’s so expensive. There are three or four ramps near the highway, near an airplane, near a railhead, near truck depots, and in a warehouse district near affluent ZIP codes. It’s really predictable where they’re gonna go.

Finally, there are communities that actually work. push back, that don’t see Amazon as a gift from the gods arriving in their town, and who actually resisted and have done so successfully.

And we didn’t even touch on the fact that Amazon is doing this around the world. We’re not just talking about the United States. They’re getting subsidies in every country they can, but also around the world folks are resisting it.

It’s true. These new damnings? findingsBy ReutersThe newest revelations about Indian third-party vendors have been made public letter from five members of Congress to the Department of Justice, asking them to look at Amazon’s potential lying to Congress about their behavior toward third party vendors. You’re right. This is a global story.

All right. We’ve been speaking with Greg LeRoy; he’s executive director at the group Good Jobs First. You can find their work online, including on ending Amazon subsidies. Greg LeRoy, thank-you so much for being with us this week CounterSpin.

Thanks, Janine.