Such numbers are nonsensically large—there’s no way to make them stick. But in 2017, Bezos demonstrated what they mean. That was the year the company conducted a nationwide sweepstakes to choose a location for its second headquarters, or HQ2, as it was called. Seattle was already a company town: Amazon had more than 40,000 employees there, and as much of the city’s office space as the next forty largest employers combined. It was time to take over a new city.
The spectacle was about more than financial benefits; the company sought to flex its power over elected officials. Amazon had engaged in these displays before, such as when it threatened to move jobs out of Seattle after the city council passed a law that would’ve taxed large employers for each employee earning over $150,000 to fund homelessness-outreach services. Indeed, New York had its winning status revoked after a coalition of working-class organizations, left-leaning politicians, and pissed-off residents made too much noise about the downsides of hosting HQ2. The point is to beg on one’s knees; ingratitude is disqualifying.
But the contest was also about Amazon’s life-blood: data. The company learned exactly what each location was willing to give up. It received a precise picture of the strengths, weaknesses, and points of resistance in each corner of the nation. How many NDAs would Alabama officials sign? What did Boston’s elected officials think the region’s future looks like? How many young people in Columbus were entering the workforce each year? How low would Orlando go? The HQ2 affair was a national demonstration of fealty to a private corporation by publicly elected officials. Sure, everyone already knew Amazon was powerful, but this was different: a corporate entity told politicians to jump, and they asked “How high?” How did this happen?
Alec MacGillis’s Fulfillment: Winning and Losing in One-Click America goes a long way toward answering that question. MacGillis, a reporter for ProPublica, investigates the country left in Amazon’s wake, crisscrossing the United States from what he calls the winning cities to those regions on the losing side. His contention is that corporate concentration creates geographic bifurcation. Places like Boston, New York, Washington, DC, the Bay Area, and Seattle win the lottery, attracting an influx of well-heeled residents. Capital divests from other areas—midsize cities in the Midwest, much of the Rust Belt—leaving them hollowed out. Low-wage jobs and drug addictions replace union benefits. But the division is internal to the winning regions too. Poor residents within the lucky cities suffer. Desperation reigns, expectations are lowered, and elected officials become increasingly willing to give Amazon anything in exchange for the promise of jobs.
Using the tech giant as a focal point allows MacGillis to show that this state of affairs was a choice, not an inevitability. It’s not that “good jobs left”; the transformation of work was engineered. Fulfillment meticulously documents how that process plays out, with the fate of millions haggled over by a handful of people in tucked-away conference rooms.
When Amazon wanted to build two new warehouses in 2015, it reached out to JobsOhio, a private nonprofit created by then-governor John Kasich to oversee negotiations over tax incentives with companies. “Every month,” writes MacGillis, “a board called the Ohio Tax Credit Authority approved the incentives negotiated by Jobs-Ohio.” On July 27, 2015, it was Amazon’s turn to meet with the tax board. The company promised two thousand full-time jobs. In exchange, it wanted a fifteen-year tax credit worth $17 million in addition to a $1.5 million cash grant from the state liquor-monopoly profits controlled by JobsOhio. The result? “The board approved the credit 4-0.”
Surveying Amazon’s operations in the state, MacGillis writes that “the company had, in a sense, segmented its workforce into classes and spread them across the map: there were its engineering and software-developer towns, there were the data-center towns, and there were the warehouse towns.” Amazon chose the Columbus area as its location for Amazon Web Services US East, and picked three towns north of the city for its centers. Hilliard, Dublin, and New Albany were “the right sort of exurban communities to target: wealthy enough to support good schools for employees’ kids, but also sufficiently insecure in their civic infrastructure and identity to be easy marks.” The company secured its standard extractions: a fifteen-year exemption from property taxes—worth around $5 million for each data center—accelerated building permits, and waived fees. It required the community to sign NDAs before negotiations could even begin. Dublin threw in sixty-eight acres of farmland for free, and a guarantee that the company did not have to contract with union labor.
The warehouses, by contrast, are south and east of the city, areas poorer than those in the north. The sites in Obetz and Etna are near I-270 and “close enough to the struggling towns of southern and eastern Ohio to be in plausible reach of a long commute for those desperate enough to undertake it.” Amazon’s warehouses come with the standard suite of exemptions—even though ambulances and fire trucks are often called to the locations, which one investigation showed have twice the rate of serious injuries as other warehouses, the company does its best to avoid paying taxes for emergency services.
Tax avoidance is foundational to the company’s empire. MacGillis enumerates a long, damning list of the company’s schemes:
There was the initial decision to settle in Seattle to avoid assessing sales tax in big states such as California. There was the decision to hold off as long as possible on opening warehouses in many large states to avoid the sales taxes there. Amazon employees scattered around the country often carried misleading business cards, so that the company couldn’t be accused of operating in a given state and thus forced to pay taxes there. In 2010, the company went so far as to close its only warehouse in Texas and drop plans for additional ones when state officials pushed Amazon to pay nearly $270 million in back sales taxes there, forcing the state to waive the back taxes. By 2017, the company had even created a secret internal goal of securing $1 billion per year in local tax subsidies.This is predictable behavior for a company run by a man whose focus has always been on getting as rich as possible. But the government’s support for this cause testifies to its class character. A capitalist state takes its cues from executives. When a region has mostly low-paying work and little in the way of a social-welfare net, it’ll beg employers for jobs with a higher wage (even if that wage is below the industry average, as is true of Amazon’s warehouses). There is no neutrality, only officials groveling at Bezos’s feet, deferring to his fake-business-card-carrying minions. Working-class immiseration is the direct result.
by Alex Press, Bookforum | Read more:
Image: Farrar, Straus and Giroux
