Georgia officials trying to attract 50,000 jobs and Amazon’s second headquarters to Atlanta should feel queasy about a mess brewing in Seattle.
It highlights the hardball tactics of the remarkable company in which we’d be deeply financially invested. And it points to extra precautions we should take if we are to get Amazon’s HQ2.
Politically left-of-left Seattle is where Amazon has HQ1. It’s also where Seattle politicians are contemplating enacting a head tax, charging big companies based on the number of employees they have.
Contrast that with Georgia. We treat jobs creation as a good thing and often give businesses tax breaks for new ones.
Amazon hates Seattle’s idea. So do many other employers.
Recommended for you
Recommended for you
Recommended for you
But it’s Amazon’s response that should concern Georgians, even people like me who hope Amazon gets big in Atlanta.
As it awaits Seattle City Council’s vote on the new tax, Amazon is pausing plans for a new 17-story office tower. It is also considering subleasing out an unfinished skyscraper that it had planned to occupy. Combined, the projects were supposed to house 7,000 additional Amazon employees.
Amazon taking a break from its feverish growth in Seattle is like Starbucks saying it will stop serving coffee. Or Chick-fil-A disallowing employee politeness.
Council members who support the tax change say there are limited funding alternatives for additional affordable housing and homeless services, which are sharp pain points there.
“It seems only fair that as so many struggle to make their way through a tax system that’s rigged in favor of large corporations, that we ask those same corporations to financially contribute to the public health and housing solutions designed to address those consequences,” four council members said in a press release.
But some of the effort has looked like a swipe at Amazon, which already has 45,000 employees in the city proper and is its largest employer.
The company, which has often been blamed for much of Seattle’s worsening traffic and increasing cost of living, apparently would have to pay more than a fourth of the new levy’s revenue in the first year. One local councilwoman, a member of a Socialist party, highlighted a “Tax Amazon” campaign and later described Amazon’s pause as “attempted extortion.”
Amazon’s harrumphing is understandable.
It’s also a heavy handed threat that should remind Georgia and other states yearning for Amazon’s HQ2 project what they’d be dealing with.
Back in the day, Amazon used jobs to threaten or cajole states trying to force it to collect sales taxes on local online purchases. Hold off on making Amazon collect the taxes, and the company would create local jobs. Try to make the Amazon fulfill its responsibilities, and the company would kill employment plans.
In wrestling, this particular move is called a headlock. It’s unpleasant to be squished in one.
Which is why Georgia and local governments should demand extra-stringent, no-weaseling-out clauses if it does a deal with Amazon to put its second headquarters here.
Because we don’t want to dish out extra hefty tax breaks and government incentives and then a few years later watch Amazon pitch a hissy fit and march off with its many marbles.
Local politicians generally have embraced business, but it’s conceivable they’d do something in the future that would get Amazon’s algorithms in a wad.
Georgia’s recruitment goodies typically require beneficiaries to create an agreed upon number of jobs within a set period of time. I’m told the state checks to see if they comply and it can claw back incentives if employers meet 80 percent or less of the goals.
Georgia should take even more precautions with Amazon, a company that could conceivably pick up and move office workers fairly quickly.
For starters, mandate that Amazon retain the local Amazon jobs for a minimum number of years.
That’s not just my idea.
I and Atlanta Journal-Constitution reporter Scott Trubey recently dug around Seattle to learn might be in store for Atlanta if it gets HQ2. We’ll share more of what we found in the coming weeks.
For now, though, I’ll highlight something I heard from Ada Healey, an Atlanta native who leads a big Seattle real estate project that includes much of Amazon’s headquarters campus.
Healey is big on the net benefits of Amazon. I asked what Atlanta should responsibly seek from the company.
“If there are going to be material incentives, you have to negotiate for a really long-term commitment,” she said. She cited number of jobs, corporate investment, maybe even commitments to hire a certain percentage of Georgia college graduates.
And what, I asked, would Amazon want from us, beyond things like top talent and incentives?
“They want to be wanted,” she said.
One of Earth’s most disruptive businesses of the last 20 years often hasn’t felt the love in its home city.
Amazon, we’ll probably love you in Atlanta.
Just as soon as we get the prenup squared away.