The Amazon HQ2 conundrum
What should we make of the decision to build new headquarters in New York and D.C.?
The smartest insight and analysis, from all perspectives, rounded up from around the web:
"The most exciting business news story of 2018 ended with a whimper," said Matthew Yglesias at Vox. Amazon's much publicized, yearlong quest for a second headquarters came to a close this week. After a frenzied rivalry that started with 238 contenders, Amazon split its HQ2 between two locations, going with the least surprising choices: New York City and a suburb of Washington, D.C. Locating in places with a large pool of well-educated white-collar workers makes sense for Amazon, but it doesn't do much for the sites Amazon picked. Already-rich cities are "getting richer while their low-income residents actually get poorer," as housing becomes even less affordable and transportation is overburdened. Amazon could have gone to a place where economic opportunities are urgently needed. Now the company's whole search looks like a publicity stunt designed to "entice cities and states to put forward ultra-generous benefits packages" — in exchange for offices that will probably underdeliver on jobs and other economic benefits.
Companies like Amazon need to locate where the employees they want to hire are willing to live, said Josh Barro at New York. "And a lot of Amazon's target hires wouldn't be willing to live in Cleveland. (Sorry, Cleveland.)" Don't look to the tech industry to save all of America's cities. Tech draws the most elite grads, who insist on living in New York, San Francisco, or Washington. There are other industries, though, that can be "rebalanced." Does Bank of America need a big tower in midtown Manhattan, when its headquarters is in North Carolina? "There can be more filmmaking in Atlanta, more aerospace in Wichita, more biotech in the Research Triangle, more advertising in Chicago." And if you're really worried about the effect on the new East Coast hubs, said Karen Weise and J. David Goodman at The New York Times, it could have been a lot worse. If Amazon hadn't picked two locales, it could have brought 50,000 employees to one city. "Picking multiple sites allows it to tap into two pools of talented labor and perhaps avoid being blamed for all of the housing and traffic woes of dominating a single area."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"Why the hell are U.S. cities spending tens of billions of dollars to steal jobs from one another in the first place?" asked Derek Thompson at The Atlantic. New York alone is giving Amazon $1.5 billion in cash and tax credits. Every year, cities and states spend more than $90 billion in tax incentives to lure companies — deals that take funding away from things like schools and infrastructure. Kansas and Missouri spent $500 million fighting to drag Kansas City companies back and forth across the state line, and created zero new jobs. In the end, companies take proffered incentives and often move where they wanted to move anyway, and they don't even keep up their end of the job creation bargain. "In a starkly divided country, corporate pandering is the last bastion of bipartisanship, an activity enjoyed by both Democrats and Republicans at every level of government." Corporate America is getting all the help it doesn't need, and executives like Jeff Bezos don't care about the cost. "They are winning by the rules of a broken game."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
The pros and cons of noncompete agreements
The Explainer The FTC wants to ban companies from binding their employees with noncompete agreements. Who would this benefit, and who would it hurt?
By Peter Weber Published
-
What experts are saying about the economy's surprise contraction
The Explainer The sharpest opinions on the debate from around the web
By Brendan Morrow Published
-
The death of cities was greatly exaggerated
The Explainer Why the pandemic predictions about urban flight were wrong
By David Faris Published
-
The housing crisis is here
The Explainer As the pandemic takes its toll, renters face eviction even as buyers are bidding higher
By The Week Staff Published
-
How to be an ally to marginalized coworkers
The Explainer Show up for your colleagues by showing that you see them and their struggles
By Tonya Russell Published
-
What the stock market knows
The Explainer Publicly traded companies are going to wallop small businesses
By Noah Millman Published
-
Can the government save small businesses?
The Explainer Many are fighting for a fair share of the coronavirus rescue package
By The Week Staff Published
-
How the oil crash could turn into a much bigger economic shock
The Explainer This could be a huge problem for the entire economy
By Jeff Spross Published