Presumably there are ways to estimate the economic effects of 50,000 jobs + tax breaks. Is there a reason they're not mentioned?
Here is a fun question:, are these grass roots anti-amazon campaigns being boosted/funded by the few remaining cities in the running as a means to sabotage the other cities bids, from the inside?? The campaign leaders may not even know the real answer to that. Thats what I would do if I were Chicago!
Rather than trying to account for the supply chain pull as you noted, I wish cities and states would standardize upon an open source formatting and presentation of the data in their accounting systems. Many competing analyses of costs to various jurisdictions can then arise from private citizens and organizations, and then we can pit them against each other historically to converge upon a small set of models that are consistently predictive. We can even then gather insightful analyses from weaving together accounting and GIS datasets, for example, that weren't possible before without creating entire new bureaucracies.
With more accurate cost management accounting models, we can then more reliably challenge organizations petitioning for specific tax concessions: we can reasonably accurately model the influx of X thousand employees to have $Y impact upon the cost accounting structure over Z years. NPV of that cost is $N. If spread out over F forecasted years of the concession you are proposing, at equivalent long-term bond rate of your corporation of P% at your longest-projected credit quality, then that comes to $T total cost to the jurisdiction over the time period.
Then the per-employee per-$10,000 wage-adjusted cost burden to the jurisdiction on a per-unit basis becomes a calculated, known amount. Tilt the unit measure towards favoring lots of employees at moderate wages instead of a few employees at extremely high wages to incentivize high monetary velocity in the local economy, lest the extremely high wages of a few employees get translated away into capital gains-structured instruments. Compare that to existing employment data, and you know if the jurisdiction is over-paying or not for the concessions. And now the jurisdictions have a metric against which to demand a surety bond: with any future adjustments to wage and/or employee count, if it falls below a certain threshhold, the jurisdiction can collect upon a proportional amount in the surety bond for non-performance. Benefits dollars don't count, because the jurisdiction is only interested in the localized monetary velocity impact upon the localized economy that comes from wages.
I have a background in data engineering and don't really know where I'd get started. But if you could figure out a way to throw differently schema'd data at an algorithm and have it try to create a universal schema, you'd be wealthy.
There would be a ton of challenges, but the problem you described seems like a societally valuable one to solve.
For some kinds of data like account numbers, phone numbers, names, and addresses, it is possible to envision some kind of algo. But that's not where the interesting action happens. After working with lots of application developers over the years, I've learned they cram the damndest bits of information into databases, and it's dangerous to make assumptions about how they use the data (whether temporally, structurally, computationally, *etc.). Sometimes with absolutely no rhyme or reason to what or why, either; the rationale and logic is embedded entirely in front of the database within the application code.
Without access to that code, even process re-engineering teams are flummoxed at just understanding a schema, not to speak of porting it. So I find it challenging to envision a scenario where inspecting only the data can yield better results; by the time we're restricting ourselves to only the data, and only at a snapshot in time, we've lost too many bits of information, and the resolution of the solution is too coarse-grained to be universally useful. As we add more inspection time, more fine-grained snapshots, and more kinds of data however, resolution goes up; the real question becomes just how much is needed to generate a MVP.
Taxes, Incentives, and Economic Growth: Assessing the Impact of Pro-business Taxes on U.S. State Economies Soledad Artiz Prillaman and Kenneth J. Meier The Journal of Politics 2014 76:2, 364-379
> The empirical effect of business tax policy on economic development clearly diverges from economic theory. In a majority of cases, the impact of business taxation is negligible at best. Controlling for other factors, business-targeted tax cuts either have no effect or result in economic decline.
The full paper is available via Sci-Hub's latest incarnation.
For a company that does 177.87B in sales each year?
I think they would pick the structurally best city regardless. They just also want gravy from it first.
That assumes the promised benefits will actually materialize. I don't have any cites handy, but my understanding is that they usually don't. The company gets money from unsophisticated local leaders based on big promises, and the state or city is left holding the bag if those don't materialize.
Here's an example of another, similar deal that further along:
https://www.realclearmarkets.com/articles/2017/12/26/wiscons...
> The state legislative bureau estimated it would take 25 years – until 2043 – until the Wisconsin government received enough in additional tax revenues to match the initial $3 billion investment. At $4 billion-plus, the break-even point will recede even further into the future.
> The Foxconn giveaway already adds up to a lot of money – close to $1800 per Wisconsin household, even in parts of the state that won’t benefit directly from the plant.
> How many jobs will the deal actually create? The notion of 13,000 jobs is actually a goal, not a guarantee. The legislative bureau acknowledged that some estimates place the probable payroll as low as 3,000. The agency tasked with holding Foxconn accountable has a history of failing to verify job-creation claims and rewarding companies that fall short of quotas, according to state audits. How long will the jobs actually last? Foxconn has launched an extensive commitment to automation and robotics, eliminating tens of thousands of jobs in China with the introduction of specially-designed “Foxbots” – with the stated goal of eliminating almost their entire global workforce.
I'm fine with arguments for or against HQ2; I was commenting more on the sheer amount of hand waving in these articles.
Also it's not like the opposition to it is unreasonable, it probably will benefit the community but it would've been a lot better if Amazon didn't get the tax bonuses and since they were going to build the second HQ somewhere anyway. You have municipalities paying 5b$ for Amazon to do something it was going to do anyway so while the individual location is better off the system as a whole just lost 5b$ in taxes. This really plays into the current trend where Americans feel like these corporations really have outsized power in the US politically and use it to get what they want (e.g. taxes, laws, favorible labor contracts) and as average citizens we have little recourse to do anything about it.
Why couldn't it?
I would seriously doubt that any city would be offering this if they didn't believe that it would be net positive for their area. Between increases in property values (thereby increased taxes), number of high-income earners, and new spending from these people, they are likely to benefit from this arrangement in the longer term.
Amazon asking for competition between the various cities isn't hunger games because pillage Atlanta to increase their odds of being picked. It isn't this zero-sum game that these people want to make it out to be.
I would. What's good for a "city" is not necessarily good for the residents of that city. These are two totally different entities with their own wants and needs, that are not guaranteed to act in the others best interest. In fact, occasionally the incentives are so misaligned as to be polar opposites. For example :
> Between increases in property values (thereby increased taxes)
Increased property value is never just a "good" thing. It's an explicit tradeoff. More expensive property is "good" for the municipality government (their incomes rise), but generally bad for most actual humans (their expenses directly increase as a result of this, doubly so if they aren't wealthy enough to already own property).
> number of high-income earners, and new spending from these people,
Again, this is not a good thing, it's an explicit tradeoff. This is good for high-income earners (who can use each other to push their own careers forward), but is explicitly bad for everyone other resident, who can't.
If a bunch of "high earners" enter your market, and you yourself are not a high earner, your income remains mostly flat, but literally every cost you have has gone up significantly. (Housing, Transportation, Education, Medical, Daycare, etc). You are now competing against high-income people for almost everything, but with little-to-none of the money they have. You will loose, every time.
The idea of high-income earners driving up costs for everyone may be true as well. I don't have enough background other than anecdotal evidence to say one way or another though. Looking at price increases and any benefit changes to low income earners / low income migration from the area would be an interesting study once Amazon HQ2 gets off the ground.
Good job government, working against your citizens' best interest.
The assumption that political leaders invariably make decisions that are the best for the general public is not one borne out by evidence.
> It isn't this zero-sum game
Amazon is going to expand, right? Without a doubt, and regardless of what cities do, Amazon will expand. Therefore, cities offering tax breaks is just a transfer from the general public to the shareholders of Amazon. It's not zero-sum, it's negative sum, as far as the public is concerned. It's monopoly rent.
Look how much the the original community of Silicon Valley have benefited with increased property taxes.
And there is no grantee Amazon will stay in the area once the government subsidies run out.
If the HQ is going to employ thousands of workers when its built, and will require a massive construction operation to build, you're looking at a fairly large windfall for the state. Is it $5B worth? The article doesn't delve into the details.
Will tax revenues increase? Surely. Will infrastructure and housing be strained? Undoubtedly (Not everyone wants their local community turned into Seattle). Will there be a windfall? No one has proven that.
Amazon hasn't made the case its presence is a net benefit to the city it selects, and cities are arguably pragmatic for turning them away.