What's funny is she (and many other critics) specifically called out that all it would take is a single bad quarters for all those HQ jobs to evaporate and they were right.
Could you elaborate on the argument here -- are you suggesting that if a job has a potential for future loss, it is just better to not create the job at all? If I was mayor, i'd be happy to take a high-paying job in my locality even if it isn't perpetual. The key would be to tie incentives to actual payroll. Subsidy disappears as soon as the job disappears.
But guaranteeing perpetual jobs is something no organization can do, not even governments.
1. that organizations leverage and abuse these breaks
2. that its possible for layoffs to not impact the new teams and buildings pretty easily
3. that a single bad quarter shouldn't lead to layoffs esp from a company that literally is the poster child for not tanking share price when facing losses
Its weird to have this subtext or joke that AOC wouldn't understand business cycles. She's not the first or last politician to try and spend money on lasting change.
Virginia paid $750M in subsidies for Amazon HQ2 to bring 2500 high paying jobs in 2023 and Amazon did not reach that goal. They'll probably miss the 2024 mark too. What recourse does Virginia have?
Assuming that Gemini is right and Virginia keeps 5-6% of your taxable income, individuals should earn at least 5M just for break even. I don't understand this model - can someone help make sense?
Wrong. Virginia approved up to $750M in subsidies for Amazon should Amazon meet the terms.
> What recourse does Virginia have?
All they have to do is abide by the agreement because Amazon has to make the case each year to receive that year's subsidy.
Not hard to imagine Amazon got a favorable deal concerning the subsidy stipulations due to all the competing bids for HQ2.
https://d39w7f4ix9f5s9.cloudfront.net/a1/f2/85b7a8db41379e15...
From my reading, it seems pretty reasonable.
(1) Here's what Virginia and Amazon agree to. (2) Here's how it will be measured. (3) Here are the terms around payments.
The only real "subsidy" in the NYC deal was a land grant where an old plastics factory used to be that required significant environmental clean up. The land is also next to the notorious Queensbridge projects.
Really considering we mostly work in this industry, the amount of ignorance surrounding the deal, its incentive structure, and how it went up in flames is staggering.
Even the talking point about how Amazon opened up new NYC offices anyways is completely innumerate, so far they've created about 1/5th of the positions that they were projected to create under the HQ2 proposal.
Besides, the program is structured such that they wouldn't get the rebate if they didn't hire so what does it matter?
https://www.washingtonpost.com/dc-md-va/2023/04/13/amazon-hq...
Overall, Amazon did request $152M in April 2023 for the 6939 jobs it created. They didn’t request any money thru COVID and that $152M will be paid late 2026. Amazon has also paused building due to WFH and maybe realizing they don’t need another HQ. Overall, I would say this thing will stall for the next few years. There is an opportunity cost related to other businesses being offered those same subsidies and are growing. Alas, that can’t be measured.
Working at AWS I had teammates hired as remote for a team that was distributed across various regions, and we were given a mandate to either "return" to an office (including potentially having to move if one of the ones assigned to the team) or "voluntarily" leave (with no severance). I'm not saying that they didn't realize they didn't need as much real estate overall, but WFH is not the reason because it largely doesn't exist anymore at Amazon.
but notice pay and severance are not mandatory for at will employees. the company basically gets to decide whether it's worth paying you not to sue them.
there's one more factor being missed here. obviously they won't say so publicly, but there's a case to be made that the entire HQ2 was as much about calling Seattle's bluff as it was about establishing a second company HQ for its own sake. now that that particular piece of legislation has been repealed, there's not as much reason to follow through on the original plan for HQ2. see: https://en.m.wikipedia.org/wiki/Seattle_head_tax
How is this obviously not bad!? Arent most of us technologists here? How is creating 1 job better than creating 5 high paying jobs? Can anyone currently unemployed chime in on whether you prefer having high paying jobs available vs not having them available?
Why are you putting subsidiy in quote if they got a tax rebate?
Essentially the state was rebating the corporate tax they would have received in lieu of the income tax revenue obtained from the new positions along with the increased competition for high paying tech roles in the city.
The program was deliberately structured to be revenue neutral in terms of absolute tax revenue while increasing overall tax revenue by increasing state GDP
It seems like you're trying to make this way more complex than it is.
From the perspective of a city:
Gaining quality high paying jobs without a large subsidy >> Gaining quality high paying jobs while paying a large subsidy.
That's what was argued and is correct. She knew the city was in a strong negotiation position and it was absurd to provide a subsidy.
Further, most of the incentive programs that comprised Amazon's HQ2 package were pre-existing programs available to anyone, led by $1.2 billion from Excelsior Jobs, $897 million from REAP, both of which are still active programs open to any company meeting their requirements.
https://esd.ny.gov/excelsior-jobs-program
https://www.nyc.gov/site/finance/business/business-reap.page
>It seems like you're trying to make this way more complex than it is.
>From the perspective of a city:
>Gaining quality high paying jobs without a large subsidy >> Gaining quality high paying jobs while paying a large subsidy.
>That's what was argued and is correct. She knew the city was in a strong negotiation position and it was absurd to provide a subsidy.
Here is the actual equation we ended up with:
Gaining N high paying jobs without a large subsidy << Gaining 5N quality high paying jobs while paying a large subsidy paid if and only if 5N jobs created.
I do think it's slightly surprising that the US doesn't really seem to have an equivalent to the EU's concept of "unlawful state aid", which shuts down a lot of this stuff before it starts.
You are right, but missing the fact that the commodity can exist in location a vs location b. The argument for subsidies was to push to move the job to a specific location. As a tech worker in the NYC area, this would be awesome. It was an incredibly selfish decision by AoC and others to vanquish most of these jobs.
Also remember all the secondary and tertiary jobs (nannies, restaurants, dog-walkers) which were all lost along with the high paying tech jobs.
What's the point of discussing this, when people don't read?