Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate and visiting fellow at Florida International University.
Amazon announced a new $15 minimum wage for its workers. Now it should be a better corporate citizen to the host of its new HQ2.
Amazon stepped up for its workers earlier this week, announcing Tuesday that it plans to raise its minimum wage to $15 an hour for its U.S. employees. Now, it’s time for the company to step up for cities as well, saying no to taxpayer-funded incentives for its much-ballyhooed HQ2 and pledging to function as a model corporate citizen for its hometown of Seattle, and in the countless towns that house its facilities.
As of November 1, the new $15 hourly minimum will go into effect for Amazon’s 250,000 full-time and 100,000 seasonal employees. And it is urging the federal government to do the same, hiking its long-standing and far-too-low minimum of $7.25 an hour.
"We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," said Jeff Bezos, Amazon's founder and CEO.
Indeed, it appears that pressure from their critics—from workers, unions, political progressives, and the media—paid off. Senator Bernie Sanders, who brought national attention to the $15 minimum wage movement during his 2016 presidential campaign, introduced the cleverly titled Stop BEZOS Act (or the Stop Bad Employers by Zeroing Out Subsidies Act) last month, slamming Amazon and other low-wage employers, and calling for the government to tax these corporations for every dollar in public assistance, like food stamps or public healthcare, that their underpaid workers need to make ends meet.
"I want to give credit where credit is due," said Sanders. “What Mr. Bezos has done today is not only enormously important for Amazon's hundreds of thousands of employees, it could well be, and I think it will be, a shot heard around the world.”
Similar pressure has also been mounting on the company about the way it deals with communities. Amazon has been criticized for the way it avoids state and local taxes since the very beginning. Local government officials in Seattle sought to levy a tax on wages to get Amazon to do more to solve the problems of housing affordability and inequality in the city. A coalition made up of labor groups, local progressives, and even government conservatives, has criticized the large-scale incentives being bandied about for its HQ2. I even penned a petition earlier this year, endorsed by several dozen leading urbanists and economists, and signed by over 16,000 people, asking HQ2 cities to stop throwing away tax-payer dollars on egregious tax giveaways and monetary incentives for corporations. Others weighed in here at CityLab on what can be done to limit wasteful incentives in the escalating competition for the company’s HQ2.
Thus far, such pressure has not been enough. Perhaps it’s because the mayors of HQ2 cities have been unable to step up. Or perhaps it’s because this local effort is too fragmented. Or, perhaps, things would change if high-profile progressives like Sanders increased pressure on this front.
But the reality is that Amazon itself has much to gain by coupling its efforts to do better by both its workers and America’s towns. The risk to its reputation for being viewed as a bad corporate citizen far outweigh the amount of money such efforts would cost. The kind of money discussed here in terms of higher taxes in Seattle or of foregoing incentives is simply a rounding error for a trillion-dollar company, and pales in companion to the wage hike it just gave to its workers.
Writing in the Financial Times last October, I called on Amazon to pledge to be a better community citizen by supporting three key pillars. It just accomplished the first one, ensuring workers are paid a family-supporting wage, by raising its minimum wage to more than twice the federal minimum. But it has done little on the other two: helping create nearby affordable housing for employees and residents, and investing in community assets like transit and schools by rejecting incentives. If Amazon accomplished the other two pillars, it would pay its fair share of taxes and partner with communities on these critical issues directly impacting its own workers.
Imagine the goodwill Amazon would generate in cities across the country if, when announcing its HQ2 city, it pledged to turn back any incentives to the taxpayers and pay its full share of local and state taxes. By working with its original hometown of Seattle, its new HQ city, the HQ finalists, and the many towns across the country that house its warehouses, logistics centers, tech hubs and office facilities, Amazon could address the mounting problems of affordable housing, homelessness, transit, low-wage work, and more that could drastically benefit the quality of life for its workers.
My Atlantic colleague Derek Thompson called the company’s move to lift the minimum wage “a moral and strategic masterstroke.’’ It can double up on its masterstroke by showing the way on how to be a better, more-connected corporate citizen, and help spur stronger, more inclusive communities across the nation.
CityLab editorial fellow Claire Tran provided research and editorial assistance for this article.