October 4, 2017
From sea to shining sea: Amazon to open a second North American headquarters
by Simon Reichley
Amazon is planning on opening a second headquarters sometime in the next few years. According to a press release, the new digs will be called HQ2 (BOOOOORING), and the location will be determined through a “public process,” specified in an open RFP (Request For Proposals) hosted on their website.
Cities all over the country are falling over themselves to submit proposals “creative” enough to lure Amazon to their noble burgs. This is, as has been pointed out by Hamilton Nolan at Splinter News, a total fucking nightmare and a perfect example of the “grotesque power imbalance between private and public capital in America.” Which is to say, very 2017.
Kevin Schofield has a useful and seemingly well-informed breakdown of Amazon’s thinking at his Seattle City Council blog, SCC Insight, which largely supports Nolan’s thesis; Amazon has to expand their operations no matter what, and that they probably already have a couple of peach cities already picked out. The RFP is just a disgusting spectacle that aims to trick desperate municipalities into making unreasonable and irresponsible concessions to a party that is not actually exerting any leverage. As Schofield says:
Amazon’s business challenge is, in one sense, very simple: they are trying to sustain a 20-25% annual increase in sales. That is a huge growth rate, and they need to make a large number of investments to try to grow that much… In 2013, Amazon’s 22% growth meant increasing sales by $13.3 billion. This year, they will need to increase sales by $30 billion in order to have that same 22% growth. Rite Aid’s annual sales are about $30 billion — that’s how much Amazon needs to grow. The Whole Foods acquisition will cover about half of that; they will need to grow another Whole Foods over the course of the year.
He goes on to say that, even considering the productivity gains Amazon is making through automation and mechanization, the one thing they absolutely have to do in order to maintain this insane rate of growth is hire new people, which is becoming increasingly difficult in Seattle for a number of reasons. Adding a second headquarters isn’t something Amazon decided on out of civic virtue, it’s a business imperative, and, as Nolan points out, cities should be exercising what leverage they have in this situation (educated, diverse workforces, low costs of living, cultural institutions, etc. — all of which will help Amazon attract workers). They should be the ones forcing concessions, from Amazon.
Of course, in a just universe, where public servants acted in the public interest, we’d have already nationalized Amazon, and this wouldn’t be a problem.
In our universe, we have to deal with the allegedly progressive mayor of New York City, joking about how much he loves brick and mortar shopping in the same breath that he utters the words “God bless Amazon.” Schofield’s analysis makes it seem very unlikely that Amazon will relocate to New York, largely because of the exceptionally high cost of living here, and the decrepit infrastructure that makes it so fun (hey!). But Amir Khafagy notes in The Indypendent that “Big” Bill DeBlasio’s pursuit of an Amazon residence, even if doomed to failure, reveals a willingness to outright destroy one of the city’s oldest working class neighborhoods in order to bring out-of-state managment and talent to yet another mouldering waterfront.
All of this comes in a year that has seen Amazon open a handful of bookstores across the five boroughs and a large administrative center in Manhattan, and announce the imment landing of a ginormous fulfillment center in Staten Island. Every time, we hear the same shills screaming “Joooooooobs!” at the top of their lungs, eyes rolled back in their heads, spittle flying everywhere. But we know for a fact that Amazon is bad for small business, bad for workers, and bad for local, federal, and continental revenue. Sadly, that’s probably not enough to overcome the company’s disastrous thirst for growth, and local governments’ desperate thirst for job-creation.
Simon Reichley is the rights and operations manager at Melville House.