Amazon’s Racial Inequality Prime

Photo by Ruchindra Gunasekara on Unsplash

It is unsurprising that Amazon’s announcement of a new secondary headquarters has created a ripple effect of chaos in over 200 cities across the country. Amazon is one of the 5 wealthiest companies worldwide and its CEO, Jeff Bezos, is the wealthiest person in the world (personally worth over $100 billion). This bounty has city officials using expensive and complex incentive packages in order to place their competitive bids to bring the new HQ2 to their jurisdiction. While these packages will help Amazon continue its domination of retail and takeover of the greater economy, they also have set up a system that will inevitably lead to growing racial and economic inequities in whichever metropolitan area the mega-corporation selects. Amazon takes pride in a business model of providing things quickly. It seems poised here to do the same with racial inequality. One could call it Amazon Racial Inequality Prime.

Perhaps the most often offered Amazon incentive within the varying bids from cities is tax giveaways, which ultimately means further financial crises for communities of color and working-class people. Through irresponsible governance, black and brown communities in each of the final cities Amazon is considering have been systematically underfunded and exploited. Our communities need massive investment in education, housing, and healthcare programs, these programs and services have been struggling under governmental imposed austerity measures for nearly a decade and they need significant resources. This investment cannot be created by waiving property and corporate taxes on multi-million dollar companies. If anything, the very opposite should be required by these cities –instead, an increase in corporate taxes that would help redistribute the wealth Amazon brings to its HQ2 city toward the black and brown residents and neighborhoods that have been in the city long term. The current frame of tax incentives however will again leave black and brown communities on the outskirts while Amazon rakes in profits.

Cities are also offering incentives directly to Amazon employees. Denver has offered both job training grants and in-state tuition to incoming Amazon employees. Amazon employees that will relocate to the new city will make an average of over $100,000 per year, a figure that will put them at the top end of incomes in every city on the list. What about the black and brown folks struggling with tuition costs and in need of job training who make far less than 100k/yr? Given that Amazon’s workforce is overwhelming non-Black and non-Latino, it is safe to assume that this policy will only help to hasten the widening of the racial wealth gap.

Finally, the havoc Amazon will wreak on local infrastructure is massive. For cities already facing mass infrastructure crises such as Chicago, the injection of 50,000 new residents and 8 million square feet of headquarters will only add to the crisis. In addition to this initial challenge, cities are offering Amazon the ability to keep the personal income taxes of its company’s employees. That means that the millions of dollars in potential income for cities that should otherwise go towards investment in infrastructure, teacher pay, and new public housing development, will instead go right back into Amazon’s bank account. Without these deserved funds the city will be on the hook pay for these expensive items itself. This will create a cash crunch for the cities, forcing them to either cut services in local communities, borrow by taking out a string of predatory debt deals from Wall Street, or the most likely scenario, both of these measures will be used to the detriment of local community members.

The truth is none of these negative outcomes need to happen.There is a better way to ensure stability for black and brown folks that cities need to pursue at the dawn of this new age that Amazon has created and save cities from Racial Inequality Prime.Cities must fight back to ensure protections against Racial Inequality Prime in case Amazon does come.

Firstly, cities should demand Amazon commits to a massive local hiring program. In the past, cities have fought for 50% local hiring for projects and this one should be no different. Of this 50%, there should be specific allocations for communities and populations that have been historically disenfranchised inside of each of these cities. Black, immigrant, and LGBTQ people have been excluded from our nation’s economy since its inception, it is time we demand corporations guilty of perpetuating this process give back. Many cities have offered up millions in job training funds, eliminating the excuse that people from marginalized communities cannot work for Amazon due to a lack of skills.

Secondly, cities should enact strong rent control and anti-speculation laws. Amazon has made rent in Seattle skyrocket and any HQ2 city can expect the same with 50,000 new wealthy employees moving in. To prevent pushing out current residents, cities need strong rent control laws and a commitment to stop housing from being used solely as a speculative investment. Cities should look at laws that lock rent levels in and penalize people who buy large swaths of houses that they do not occupy.

Thirdly, cities should make sure that infrastructure investments are not simply in the main core near Amazon projects, but throughout the entire city, starting first with those black and brown communities that have historically been on the losing end of of infrastructure investments. In addition to providing services that these communities should have had for years already, it will encourage more even investment in the city and help prevent the tale of two cities from happening as intensely and quickly.

Finally, and perhaps most importantly, there were 238 proposals from municipalities submitted to Amazon. That means 237 places will not win the Amazon headquarters but did just lay out a framework for how much money they have to invest. In many of these cities, community leaders and activists have been calling for an infusion of funding for infrastructure and social services for years. The hundreds of millions local governments offered to Amazon prove that these cities are not broke. It’s clear they are willing to make these types of investment for a mega billionaire like Jeff Bezos, why not for their own urban residents. That’s bad politics, and it perpetuates racist economics. However, with crisis comes opportunity.

The HQ2 bids that were submitted tip the hands of these cities. Every city where Amazon does not go, people should be at their city halls and state houses demanding the millions of dollars their officials were willing to give-away to Amazon be invested back into their communities. Local officials need to be asked - if our city had money to help Amazon with a job training program, why not start one right now in a black community? The need is there. If the city sees economic benefit in tax waivers, why not waive taxes on homeowners facing tax foreclosure who have lived in the city for decades and contribute to the community in countless ways? If your city was willing to allow Amazon to keep its employees income taxes, shouldn’t they be willing to put an equivalent amount of money into education and healthcare? Instead of the $10 million in cash set aside to lure Amazon, how about a new $10 million program for citizens returning from time in prison, or programs for immigrants in the city? The possibilities are endless.

No matter where Amazon selects, they have created a new danger in the world that will develop faster than ever before — Racial Inequality Prime. Without proper protections, trouble will be at our doorstep before we know it.

Breaking Down The System

ACRE staff tackle a topic of interest in a simple, easy to read format

ACRE: Action Center on Race and the Economy

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The Action Center on Race & the Economy (ACRE) is a campaign hub for organizations working at the intersection of racial justice and Wall Street accountability.

Breaking Down The System

ACRE staff tackle a topic of interest in a simple, easy to read format

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