Sarah Holder is a staff writer at CityLab covering local policy, housing, labor, and technology.
Amazon has said each HQ2 site will result in 25,000 jobs. Will the working-class benefit? Will Amazon train locals for future employment?
“Only New Yorkers could complain about getting 25,000 new jobs,” comedian Colin Jost laughed on a recent episode of Saturday Night Live. “All the cities who lost out must be like, ‘shut up, you whiny bitches.’” The joke obviously referenced Amazon’s announcement that starting in 2019, the company will begin to grow two 25,000-employee offices; one in Long Island City, Queens, and another in Northern Virginia. (It will also put a 5,000-employee office in Nashville, Tennessee.)
The New Yorkers who are fighting Amazon’s move aren’t job haters, they’ll tell you, even the ones that stood in the rain outside State Assemblywoman Catherine Nolan’s office last week, yelling “New York is not for sale.” Nor are Washingtonians and Virginians, even those who’ve opposed the project at Arlington county council meetings. The growing number of vocal Amazon NIMBYs are mostly not-shutting-up about everything else they fear a tech giant could mean for their neighborhoods—sky-high housing prices, clogged public transit, and squandered taxpayer money. Those factors have been projected to be anything from extreme to negligible in the already-booming cities, depending on who you ask.
But the impact of the burst of jobs itself is murkier still. “When we talk about bringing jobs to the community, we need to dig deep,” wrote New York’s U.S. Congresswoman-elect Alexandria Ocasio-Cortez on Twitter, days after the deal was announced. “Has the company promised to hire in the existing community? What's the quality of jobs + how many are promised? Are these jobs low-wage or high wage? Are there benefits? Can people collectively bargain?”
New York City Mayor Bill de Blasio says they’ll be “new” and “good-paying.” Amazon says they’ll be salaried at an average of $150,000, and little else. Community organizers say they’ll be out of reach for the people that need them most. “We know Amazon will be contributing to gentrification of communities,” said Maritza Silva-Farrell, the executive director of The Alliance for a Greater New York. “As well as the gentrification of jobs.”
While Amazon didn’t comment on the distribution of the salaries nor the range of positions (even when CityLab requested comment), evidence from their first HQ in Seattle shows that many of the roles they hire for are high-level administrative and software engineering ones—meant for people with an advanced coding background, and usually a bachelor’s degree.
That’s bolstered by the company’s insistence that it chose the regions for the strong tech talent pipelines that surround: It can poach students from Cornell University’s tech satellite campus on Roosevelt Island, adjacent to Long Island City; and soon, from a billion-dollar Virginia Tech “Innovation” campus planned for Amazon’s newly-branded hometown, National Landing. It can skim from the 25,000-strong workforce at the Pentagon, which Amazon could soon tie as the largest employer in Crystal City. And it could also reshuffle hires from the thousands of workers it already employs in Northern Virginia and Washington. Besides its staff in Seattle and the Bay Area, Amazon has more workers there than anywhere else in the country.
But a corporate headquarters can’t operate on the labor of techies alone. It needs service workers, and administrative assistants, and IT specialists to keep the place running. Stephen Fuller, director of the Institute for Research on the Washington Region’s Economic Future, predicted in the Washingtonian that support staff could end up being a large quotient of the headquarters, creating thousands of “pretty good jobs,” ranging from security to equipment servicing and building management.
At a presentation for Queens residents late last month, the New York City Economic Development Corporation said that only half of the Amazon jobs would be tech-related, according to the Washington Business Journal; and the Virginia Economic Development Partnership has said the Virginia jobs will be similarly distributed.
“When we talk about the tech sector it’s important to think more broadly,” said Elizabeth Lindsey, the executive director of Byte Back, a D.C.-based non-profit that trains underserved communities in the district with tech and computer skills. “Not everyone wants to be a software engineer.”
Other labor activists note, though, that the non-managerial or tech jobs Amazon has a history of providing aren’t ones the community should glorify. Although Amazon recently announced it would raise all workers’ wages to at least $15 per hour, many warehouse workers have been reported to depend on SNAP benefits for food; and some are forced to wear wrist trackers so their bathroom breaks aren’t too long. Other service-level hiring in the tech industry is often contracted out through third parties.
“[Amazon is] not going to hire janitors and custodial staff themselves,” said Roshan Abraham, the Steering Committee leader of progressive organizing group Our Revolution Arlington. Those contract jobs don’t offer benefits, and Amazon itself has “no real obligation towards them.” Amazon would not comment on whether it would use a third-party contractor for new HQ hiring.
“Amazon is infamous for treating low-wage workers like disposable labor,” said Angeles Solis, the director of worker organizing at the non-profit advocacy organization Make the Road NY. “Our membership and communities are outraged that Amazon sees especially a working immigrant community like Queens as a source for that disposable labor.”
Amazon’s choice to locate in two “superstar cities” has been criticized as a missed opportunity to invest in somewhere needier: New York already hosts the most corporate headquarters (and the accompanying revenue) of any city in the country, and the D.C. region isn’t far behind. “This is an inevitability of how tech works,” said Mark Muro, Senior Fellow and Policy Director at the Brookings Institute Metropolitan Policy Program. “Leave tech to its own devices, and its location decisions will serve to pile onto the places it is already.”
But the choice, however strategic, has another consequence. Both immediate regions already rank high on employment metrics: Arlington has a 2 percent unemployment rate, the lowest of any jurisdiction in Virginia; and Long Island City’s is 4.6 percent, lower than New York City’s and only slightly above the 4.1 percent national rate. In a tight labor market like this, there are fewer unemployed workers for Amazon to choose from within the communities themselves.
“A lot of people talk about ‘Oh, it’s going to hire locally,’” said Abraham. “There’s not enough people to hire locally.” Instead, he fears, they’ll be flown in from out of state, eating up housing as they come.
Of course, any company moving into a city creates a hiring domino effect of sorts. The company doesn’t just make a binary choice between hiring an unemployed local resident or an unemployed migrant, says Timothy J. Bartik, an economist at the W. E. Upjohn Institute who has done research on regional economics and labor demand. It could also hire a local resident who would otherwise be employed, creating a local vacancy—which is in turn, filled either by a migrant or a local. “The vacancy chain only stops when a non-employed local resident gets a job or an in-migrant gets a job,” he says.
Besides direct hires, one to two local employment opportunities could be created for one Amazon job, based on a projected “job multiplier effect,” as a growing economy of start-ups—and cafés to feed their labor—follow its lead.
In practice, according to Bartik’s research on the average company’s impact on the communities that lure them with incentives, about two-thirds of the jobs created by incentive-baited companies are filled by local residents in the short-term. But after a couple of decades, 85 percent of the jobs are filled by migrants who move in to fill them. All told, only 15 percent truly boost local employment.
“That has positive effects on internal tax revenue, local spending, and job growth—especially for those in lower income brackets,” CityLab reported on the research in March. “[B]ut since these community benefits are often paired with a jump in population … they all but even each other out.” More people means more taxpayers and a healthier economy, but it also means strained public services.
In the agreements with Virginia and New York, Amazon seemed to account for more jobs than the initial 25,000: In Virginia’s agreement, the company estimated that, after a second hiring phase, a total of 37,850 could be created; and New York’s also indicated a potential for 40,000 total new jobs within 15 years of entering the city.
But that high local hiring estimate doesn’t account for the jobs’ equitable distribution. D.C., for example, already has a thriving professional and technical employment base, says Martha Ross, a fellow in the Brookings Institution’s Metropolitan Policy Program, with a multiplier effect of its own. Over the last eight years, the District has increased its population by 16 percent, D.C. city-council member Jack Evans said at Washington D.C.’s Economic Partnership annual meeting this week, and the number of people who both work and live in the district has grown by 27 percent.
But, Ross says, associated bakeries, restaurants, copy centers, and gyms aren’t employing enough workers from D.C.’s lower-income areas. “What I would predict is there might be some improvement on the margins, but we’d see the same pattern play out,” she said. “This employment boom—there will be a group of people who are not participating in it.”
Ensuring that people of all socioeconomic levels benefit is important because the low unemployment rates at the city level mask the poverty within and beyond. Crystal City’s neighbor Washington, D.C. has an unemployment rate of 5.6 percent, and while the city’s homelessness rate is dropping, there are almost 7,000 on the streets on a given night. Long Island City hosts the Queensbridge Houses, the largest public housing development in the nation, according to the New York Times, primarily home to most of the area’s small population of blacks and some Hispanic residents, and, with a median household income of $15,843. About 63,000 homeless residents sleep on New York City streets each night.
For them, says Silva-Farrell, Amazon jobs will help more than hurt. “They say they want to open an HQ in Long Island City because they believe we can create those jobs,” she said. “The question is, jobs for whom?”
“We built this city”
In October of last year, economic equality organizing groups in many of the cities on Amazon’s HQ2 shortlist (including New York, Maryland, and Washington, D.C., but not Northern Virginia) wrote an open letter to Jeff Bezos, laying out a list of demands for an HQ2.
“We love jobs, we love technology, and we love convenience,” they wrote. “But … we built these cities, and we want to make sure they remain ours.” Among their demands was an agreement to create “safe, family-sustaining” construction, logistics, and permanent campus positions. They asked for Amazon to create mentorship programs; to give employees the right to form unions; to limit the use of temp agencies; and to meet local hiring quotas.
Jeff Bezos never responded. He wasn’t expected to. But after offering the company close to $3 billion—much of it contingent on meeting high hiring benchmarks—the cities Amazon will soon call home could engage in future negotiations that would hold Amazon to similar hiring expectations.
Creating local jobs, for instance, doesn’t have to be a pipe dream: it could be a demand. In Dallas’ (losing) proposal for an HQ2, the city offered up to $100 million in cash grants if 25 to 40 percent of Amazon hires were Dallas residents. In New York and Virginia’s bids, no such incentive was offered.
But the most important part of linking people with good jobs is training them to fill them, says Catherine Bracy, the executive director and co-founder of the Tech Equity Collaborative, a Silicon Valley organizing group. Cities have to ask, “Do people have the skills to compete in the 21st century economy?” And, if not, “are there the social supports that can help them get through the transition?” In other words: how strong is your workforce development program, and how can you make it stronger?
New York’s agreement nodded to that priority. Together, the state, the city, and the company have pledged $15 million total towards workforce development starting in 2020; $5 million of it will be from Amazon. Over the next ten years, the agreement reads, the “Company will collaborate with the Public Parties … to develop workforce development initiatives that will impact thousands of students and workers,” which “may include” things like tech training programs targeting “non-traditional” demographics, including New York City Housing Authority residents. Amazon will send representatives to jobs fairs and resume workshops in the Queensbridge Houses starting in 2020. (They're only held to the contract for three years, though—after that, it’s up to the company to continue the partnership.)
The programming also “may include” partnerships with city technology training programs, and third-party organizations like Pursuit, which trains high-need New Yorkers (including public housing residents) with technical skills. “With Amazon coming here to Queens, Pursuit’s job here is to try to bring the community to Amazon,” says Jukay Hsu, Pursuit’s Founder & CEO.
New York City council speaker Corey Johnson, who has been vocally opposed to the Amazon deal, has expressed faith in Pursuit but not in Amazon. “Speaker Johnson hopes that Pursuit’s proposed partnership with Amazon proves fruitful in terms of bringing jobs to low-income residents of Long Island City and Queensbridge Houses,” the spokesperson said. “But [he] remains concerned about the entire Amazon deal in terms of its lack of public input and level of subsidy.”
Despite its personal commitments to workforce training, Amazon’s impending entrance has already meant that a developing plan to increase space for tech education in the city has squealed to a halt, at least for now. The waterfront property Amazon will occupy was once slated to become the Long Island City Innovation Center, which, based on initial plans, would have included: 22,500 square feet of pre-built incubator spaces; 10,000 square feet for an Arts and Technology Accelerator; 10,000 square feet of classroom space for workforce development and career training; and a 600-seat public school.
“The LICIC project is currently on hold until we are informed by the State about how they plan to proceed,” said Ingrid Young, a senior Project Manager at the Mayor’s Office of Environmental Coordination in an email. “We are currently anticipating that a new proposal might include all of the non-residential components of LICIC project,” including the school and the incubator. In agreements, Amazon also indicated that it would help the city build a public school.
And Hsu told CityLab that Pursuit will have space on Amazon’s new campus to develop a training center for some of the organization’s students. With an Amazon in town, “there will be a lot of new jobs, and new companies,” said Hsu. “We want to make sure the promises here are meaningfully delivered."
That’s the thing: Jobs, in a vacuum, are good, and the Amazon jobs could be great. But if there’s anything the infuriating race for Amazon HQ2—now Amazon HQ2 and 3—has taught the country, it should be that corporations don’t always behave predictably, or with an eye toward maximizing benevolence. Especially if they haven’t been asked.
Who knows if the 25,000 jobs will even materialize, says Tom Stringer, a site-selection expert. “The business world could change. Who knows what’s going to happen with tariffs; with terrorism?” he said. “I would never let a client commit to creating those kinds of jobs: It’s too uncertain; way too uncertain.”