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The New York Hustle of Amazon’s Second Headquarters

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Re: The New York Hustle of Amazon’s Second Headquarters

#61

For the nation as a whole it's a bad deal, in a prisoner's dilemma if everyone cooperates the payoff matrix is globally optimal. But for New York City it's a good deal, and those claiming otherwise refuse to look at the math and instead want to go with how the deal makes them feel. $150,000 x 25,000 = $3.75B/year. At NYS + NYC effective tax rate of around 9.25% at that income level that's around 350MM in income tax a…

What is with all these posts that just assume that 25,000 new humans are going to be plopped down in NYC? Has Amazon come out and said that they’re going to be relocating 25,000 employees here? If not, then I suspect a solid majority of those hired will already be living and working in the greater NYC area. In those instances, any gain in income tax revenue will be meager.

Do you think 25,000 positions are going to disappear from the rest of the local economy?

New York City's population growth from 2010-2017, without Amazon, averages out to 64k/year [0]. Adding 25,000 humans to New York is an entirely ordinary and expected occurrence that's been playing out every 4.5 months, not some sort of outrageous hypothetical.

[0] https://www1.nyc.gov/site/planning

Re: The New York Hustle of Amazon’s Second Headquarters

#62

For the nation as a whole it's a bad deal, in a prisoner's dilemma if everyone cooperates the payoff matrix is globally optimal. But for New York City it's a good deal, and those claiming otherwise refuse to look at the math and instead want to go with how the deal makes them feel. $150,000 x 25,000 = $3.75B/year. At NYS + NYC effective tax rate of around 9.25% at that income level that's around 350MM in income tax a…

What is with all these posts that just assume that 25,000 new humans are going to be plopped down in NYC? Has Amazon come out and said that they’re going to be relocating 25,000 employees here? If not, then I suspect a solid majority of those hired will already be living and working in the greater NYC area. In those instances, any gain in income tax revenue will be meager.

It’s 25k new jobs though. Not replacing existing. So the relocation aspect doesn’t really matter.

Re: The New York Hustle of Amazon’s Second Headquarters

#63
post #31

Earlier quoted context omitted.

And yet I just heard that the MTA is raising prices again this year. How many Fortune 100 companies need to move here before we get a working subway system?

To be fair, you do have a working subway system. If you didn't, no one would care that they raised prices. You guys have the best subway system in the US if we're being honest here. That's part of the reason why you get things like Amazon's HQ2 instead of anyone else.

Having lived in both NYC and Boston for decades, I'm tempted to say the T is better than the subway, but I really just hate crowded trains in general and the T train I took was always empty because I reverse commuted.

I am a happy suburb driver now :p

Re: The New York Hustle of Amazon’s Second Headquarters

#64

For the nation as a whole it's a bad deal, in a prisoner's dilemma if everyone cooperates the payoff matrix is globally optimal. But for New York City it's a good deal, and those claiming otherwise refuse to look at the math and instead want to go with how the deal makes them feel. $150,000 x 25,000 = $3.75B/year. At NYS + NYC effective tax rate of around 9.25% at that income level that's around 350MM in income tax a…

What is with all these posts that just assume that 25,000 new humans are going to be plopped down in NYC? Has Amazon come out and said that they’re going to be relocating 25,000 employees here? If not, then I suspect a solid majority of those hired will already be living and working in the greater NYC area. In those instances, any gain in income tax revenue will be meager.

Any time a new job is created somewhere, regardless of whether or not it is filled by someone who was already local or not, the total number of available jobs + filled jobs goes up, as long as positions are backfilled. Positions usually are backfilled.

So even if every person that works at Amazon NYC already lived in NYC, they will have left 25,000 other jobs that are now available.

There are a few ways in which these previous jobs get backfilled:

1) More people moving around locally. This will generally increase the pressure for local businesses to keep their employees happier, to prevent the attrition. This will generally increase the pressure for the businesses looking to hire to also compete. The easiest way both parties do this is increasing salary - which increase tax revenue. Other ways are other employee perks, which might not directly result in more tax revenue, but should result in increased QoL for the employees.

2) People moving into the city. People move to where the jobs are. People moving directly increases tax revenues, because they're increasing the tax base. If they're not moving in large enough quantities to fill all the open positions, then again, companies have to do something to increase their attractiveness. Since this is usually increasing pay, when it gets high enough to attract someone to move it then is an even larger effect.

3) People coming of age for work that already lived there/graduating college there/etc. They might already reside in the city, but weren't part of the workforce. They'll need jobs, and again, a market that is competing for employees is one where employers have to differentiate themselves.

NYC doesn't need the Amazon jobs to be filled by people moving to the city for it to be an economic win. They just need to have properly balanced tax incentives/breaks vs. the benefit achieved from these factors. I'm not an expert so I don't know if they've successfully done that, but there's no reason to think that this being successful is dependent on Amazon directly bringing in people from out of city/out of state.

As long as this is allowed nationally, cities and companies are being rational actors in trying to make these sort of deals. It doesn't mean that they always work out (See: Wisconsin, Foxconn, as mentioned repeatedly), but it is certainly possible for a deal to be created that is mutually beneficial to the company and the locale.

Re: The New York Hustle of Amazon’s Second Headquarters

#65
Being from New York and having followed this situation closely, I can say that this entire fiasco serves as a good example on how the politicians we elect _ought to_ protect their constituents from predatory corporate power.

However, this is not the case. Its mere political theatre as De Blasio and Cuomo pose for the cameras, as what matters is not the actual success they have achieved for the city in terms of job creation, but the _perceived_ success. That's how politics works. Otherwise some kind of protocol would exist to enforce, track and hold to account the job creation promises alleged by corporations or federal economic policies (NAFTA anyone?). How convenient that it does not exist. How convenient that we forget that as a private enterprise, Amazon has no obligations to the public.

The old tired adage "socialism for the rich, capitalism for the poor" sounds about right. Supporters of Amazon can work out all the math they want to try to convince others (and mainly themselves) of any public benefit. When taxpayer dollars are diverted to corporate welfare, that's when we, the public, get those austerity policies that we love so much. All in exchange for the 25k high-paying jobs not applicable to the working and middle class folks who in addition, will no longer be able to afford living there and will be forced out.

Re: The New York Hustle of Amazon’s Second Headquarters

#66
post #3

Has anyone seen specifics on how they'll be held accountable? They've made promises for x jobs with $y average salaries, but if they don't meet that, then what? https://ny.curbed.com/2018/11/16/18098589/amazon-hq2-nyc-que... suggests that nearly $1.3 billion is not tied to any amount of job creation at all.

That article is an example of people not understanding what this deal is. Amazon is not receiving $3B in public dollars, they are receiving $3B in tax breaks. They are shifting a small % of that via PILOT and some other funding Amazon has agreed to. I don't understand how people think this is in any way a bad deal for NY.

Tax breaks have a value, some might even say a cost.

Re: The New York Hustle of Amazon’s Second Headquarters

#67

Eh. Everyone is acting like $3B is some massive some of money. The State of New York recently sealed a budget for ~$168B and and the economy of the state itself is somewhere around $1.2T. Hell, Amazon itself has a market cap of nearly 800B. As of 2017, "[m]ore people are leaving the New York region than any other major metropolitan area in the country": https://nypost.com/2017/04/01/people-are-fleeing-new-york-at...…

The tide of people leaving because NYC is becoming completely un-afforable if you make less than 60k a year.

The median household income is $59k. It’s not unreasonable that a large metropolis cost above average, given the higher population, while declining, still represents high demand for housing and local amenities.

Re: The New York Hustle of Amazon’s Second Headquarters

#68

Earlier quoted context omitted.

Still, it's a game that should be stopped. The federal government should stop things like this from happening, as it extracts value from local governments and gives it to corporations

It does NOT extract local value... it reduces Amazon's tax burden in exchange for high paying, highly taxed jobs. There's no money being paid to Amazon.

The state should appoint companies past a certain size a board member. It is not like taxes are unnecessary.

Re: The New York Hustle of Amazon’s Second Headquarters

#69

Earlier quoted context omitted.

And yet I just heard that the MTA is raising prices again this year. How many Fortune 100 companies need to move here before we get a working subway system?

The MTA's problems have far more to do with inefficiency, mismanagement, and corruption than they do with a lack of money. A big part of the problem is that it doesn't have an accountable governance structure. The current MTA board is made up of appointees of: the governor, the mayor, and the county executives of Nassau, Suffolk, Westchester, Rockland, Putnam, and Orange counties. There needs to be one elected offici…

Huh, I just looked it up, I guess the Mayor represents the five burroughs but you'd think Kings, Queens, Manhattan, the Bronx, and Staten Island would have representatives that represent them alone if Nassau, Rockland, Putnam, and Orange counties do.

Bizarre.

Re: The New York Hustle of Amazon’s Second Headquarters

#70
post #65

Being from New York and having followed this situation closely, I can say that this entire fiasco serves as a good example on how the politicians we elect _ought to_ protect their constituents from predatory corporate power. However, this is not the case. Its mere political theatre as De Blasio and Cuomo pose for the cameras, as what matters is not the actual success they have achieved for the city in terms of job cr…

Isn't NAFTA pretty much very favorable to the US?

I agree with your sentiment that corporate welfare sucks and would have been much happier with the tax breaks being distributed to startups somehow, however, you're talking about LIC, where home prices already average above one million dollars.

Gentrification in LIC started a long time ago. These 25,000 people, many of whom will be hired from within the already vast tech talent pool, probably aren't going to drive prices up very much.

I think it really underestimates just how big NYC is to think such a thing.

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