Almost three months after Amazon announced it would build a new headquarter in New York City, the trillion-dollar company announced on Feb. 14 that it would pull out of its previous commitment. Amazon’s announcement of a new headquarter began a competitive bidding war among cities last year, with the Big Apple winning with a package of government subsidies and tax cuts that, according to the New York Times, would amount to nearly $3 billion. Although the company promised to bring an estimated 25,000 jobs to the area, as conveyed through multiple press reports, Amazon faced immediate backlash for its decision. Such resistance succeeded in pressuring the company to back down from its deal, scoring a resounding victory against excessive corporate pampering and ineffective municipal subsidy systems.
The problem with the Amazon subsidy plan and others like it lie in their redundancies. Companies such as Amazon who seek urban subsidies often do so after committing to their destination of choice. As a result, urban government subsidies represent billion-dollar payments to companies for convincing them of a decision that has already been made. Amazon is no exception to this trend. In a move separate to its new headquarters, Amazon previously announced that it would expand its pre-existing distribution center in New York City, with technology review website CNET reporting that the move would bring around 2,000 high paying office jobs. This demonstrates the media’s and retail company’s interest into expanding in New York City, a capital of media and retail, regardless of billions of government money.
Companies such as Amazon should not need financial incentives to expand. Currently their outrageous demands for billions of dollars seem more like the temper tantrums of a toddler rather than the dignified negotiations of an international corporate powerhouse. Even when businesses get their way with such childish means, they often fail to uphold their moral obligations to local areas that have spent months planning for their arrival. Time and time again, companies such as Amazon seem to have no shame in backing out of New York headquarter plans, taking no responsibility for their role in disrupting the future plans of countless working class citizens.
This corporate trend of misdoing has transcended local and state boundaries. It has become a national financial crisis. According to The Atlantic, American cities spent over $90 billion to subsidize companies in 2018, which was more than the federal government spent on education or transportation in the same year. However, urban subsidies such as New York’s appeasement of Amazon do not create additional jobs, but simply shuffle them around the US. In this sense, despite tens of billions of municipal government spending, the overarching US economy will experience no additional growth or job creation that would not have happened if such spending did not exist. At this point, it is the responsibility of the federal government, by which the Constitution bestows the responsibility to regulate interstate commerce, to put an end to this wasteful spending. Although outlawing all subsidies outright may be logistically impossible, regulations must be put in place to check this growing recklessness. Cities must be allowed to reinvest this money to improve the lives of working class citizens instead of slaving themselves for profit greedy corporations.
Amazon’s deal with New York was unsound at best and dangerous at worst, and the agreement’s defeat was a victory for the people. Amazon’s demise in New York was a step in the right direction, but much more will be needed to bring down the flawed system of corporate incentives in American cities. The fight for change will undoubtedly be long and arduous, but nevertheless the federal government and individual cities must collaborate to reject wasteful and excessive corporate handouts.