February 15, 2019

No matter what Amazon does, there are consequences: proposed Queens HQ is canceled

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Photo of Long Island City by King of Hearts licensed under CC BY-SA 3.0

Announced Thursday afternoon, Amazon has decided it will not open a campus in Long Island City, Queens. Not now, not ever. Many see this as a direct win for the grassroots organizing done by labor activists, unions, and small business owners from the area. But for Amazon and New York legislators, the end result is a messy one, full of blame.

John Maher at Publishers Weekly posted part of Amazon’s “lengthy” statement addressing their decision:

After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.

While both state governor Andrew Cuomo and New York City major Bill de Blasio are upset with Amazon’s seemingly spontaneous decision, the two had very different reactions to the announcement.

For Cuomo, its clear the fault falls on the “small group [of] politicians [who] put their own narrow political interests above their community,” as well as grassroots labor organizers, for halting his plan to “diversify our economy away from real estate and Wall Street.”

De Blasio’s reaction, on the other hand, directs the fault on Amazon’s obstinacy in working with the city.

You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.

On top of the $3 billion incentive the state and city would’ve given Amazon for building a campus in Long Island City, Amazon reportedly is paying no federal tax for 2018. The tech giant has finally reached immense profitability and yet some of our politicians and legislators believe funneling more money to Amazon will somehow help citizens and labor in the long run.

Well, my friends, this is not so. Just before Thursday’s announcement, the American Booksellers Association (ABA) posted a summary about a recent report which details the financial impact of Amazon’s ever-growing tentacles into the heart of America’s economy. The “Prime Numbers: Amazon and American Communities” surveys the nationwide impact of Amazon’s retail history, and the “as-yet-unrecognized loss and stagnation for America’s cities, towns, and local communities.”

It continues:

Reviewing the most recent four years of Amazon’s U.S. retail sales, Prime Numbers documents that in 2018 alone Amazon and its third-party vendors sold $189 billion of retail goods. The report’s analysis reveals that the nationwide results of those sales were:

  • 540 million square feet of displaced retail space,
  • 900,000 displaced retail jobs, and
  • $5.5 billion to $7.0 billion in uncollected sales tax.

For the period of 2014–2018, the cumulative loss in uncollected sales tax is estimated to be as high as $22.5 billion.

The writers of Prime Numbers further elucidate the economic advantage of having small businesses crowd “Main Streets” throughout the country.In particular, revenue generated by indie bookstores has a far more tangible impact in any local community, with an average of 28 percent of that revenue recirculating back into the economy. With Amazon’s use of Marketplace vendors, local communities see only 4 percent of the revenue come back.

 

 

Alex Primiani is the associate director of publicity at Melville House.

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