November 7, 2016
The ABA and Civic Economics update their “Amazon and Empty Storefronts” study
by Julia Fleischaker
The American Booksellers Association and Civic Economics have issued an update to their “Amazon and Empty Storefronts” report from February, and it shows a problem getting worse, not better. As David Grogan at Bookselling This Week points out, the original report contradicted popular opinion of Amazon as a jobs creator good for the national economy, and the updated statistics underscore those findings.
“The updated study again shows that—whether it’s in dollars lost in sales and property tax revenue, far fewer retail storefronts serving local communities, or significant job losses—Amazon has a massive, overall negative impact on the American economy,” said ABA CEO Oren Teicher. “We need to come to grips with the fact that every American consumer is paying a high price for Amazon’s growth.”
The update, amended to include 2015 data, shows Amazon’s soaring sales, which are great for the company, are bad for states and municipalities.
The original study showed that from 2014 to 2015 Amazon sales jumped by 26 percent from $44.1 billion to $55.6 billion. In 2014, Amazon sales produced a net national loss of more than $1 billion in revenue lost to state and local governments. Just one year later, the update shows that overall revenue losses jumped by 18 percent to $1.2 billion.
The study looked at two indicators to get the results. Determining Amazon’s sales per state allowed for a calculation of how much sales tax was going uncollected. (Almost half of all states collect no sales tax from Amazon sales, and many others only collect partial sales tax.) Civic Economics also looked at Land Use data, those empty storefronts of the study’s title. The organization posted their Essential Findings on their website, and it isn’t pretty.
ESSENTIAL NATIONAL FINDINGS 2015
In 2015, Amazon sold $55.6 billion worth of retail goods nationwide, all while avoiding $704 million in sales taxes. The cost of lost sales taxes falls equally on state and local governments.
These sales are the equivalent of 39,000 retail storefronts or 133 million square feet of commercial space, which might have paid $528 million in property taxes.
A total of more than $1.2 billion in revenue is lost to state and local governments.
Amazon also operated 75 million square feet of distribution space, employing roughly 111,000 workers.
Even counting all the jobs in Amazon distribution centers, Amazon sales produced a net loss of 222,000 retail jobs nationwide.
Grogan quotes Teicher saying that the new numbers “bear out that the deleterious effect of this retail dominance has only grown. The figures in the updated study, especially when compared to last year’s numbers, should make it clear to both state and local policymakers that supporting healthy local economies is a far better prescription for long-term economic growth.”
Julia Fleischaker is the director of marketing and publicity at Melville House.