Shortly after Amazon — a company worth more than $500 billion — announced last year it would be building a second headquarters, dubbed HQ2, it was deluged with hundreds of bids by municipalities and state governments offering all sorts of taxpayer giveaways to reel the company in.
The bidding war served as a sort of absurd reality show, as cities competed to win the affection of Amazon tycoon Jeff Bezos. Only instead of a “Bachelor”-esque rose ceremony, Amazon in mid-January released a shortlist of 20 cities and regions among which it will now pick one to establish HQ2.
Those cities are now lining up to intensify their roles in the bidding process, as Amazon has promised it will use the next few months to “dive deeper” into the offers each location has made. New Jersey for example, has proposed spending $7 billion in incentives to draw Amazon to Newark. Chicago’s multibillion-dollar bid includes an offer of free land worth up to $100 million.
But what if the remaining 20 cities decided to stop racing to the bottom — offering all sorts of subsidies and other giveaways to the company to lure it to their locations — and instead collectively bargained with the company?
Richard Florida, a University of Toronto professor who studies urban policy, suggested on Twitter that the competing cities form a non-aggression pact and tell Amazon they are not going to continue to beg the company for HQ2 with incentives and giveaways:
2. Such a mayor could enlist other progressive mayors like Bill Peduto in Pittsburgh, Muriel Bowser in DC, Baraka in Newark & others in a No Incentive/ Mutual Non-Aggression Pact to compete on the merits. Murphy in NJ is signalling he would walk away from Christie's $$$.— Richard Florida (@Richard_Florida) January 19, 2018
Florida expanded on his proposal in a CNN column written over the weekend. “The truly progressive thing to do is to forge a pact to not give Amazon a penny in tax incentives or other handouts, thereby forcing the company to make its decision based on merit,” he wrote.
Rep. Ro Khanna, D-Calif., a rising critic of Amazon and other monopolistic companies, agreed with the idea broached by Florida.
“The cities should not compete against each other in a race to the bottom. It’s absurd for the taxpayers to offer subsidies to one of the richest companies in the world,” he said in a statement to The Intercept. “Instead, perhaps the cities should band together and bargain collectively on issues such as wages, jobs, infrastructure improvements, and the environment. This would prevent Amazon from simply going to the city that offers the most tax breaks.”
Khanna also called for increasing federal investment as one way to reduce the pressures of further bidding wars for technology jobs.
“The bidding process with Amazon shows why we need the federal government to help support cities and communities across America for 21st century jobs,” he said. “Right now, cities have been left to fend for themselves and are desperate to attract any tech jobs. If the federal government were to support fiber and broadband in cities, an expansion of universities, strong credentialing and apprenticeship programs, and state of the art infrastructure, then they would not be as reliant on the whims of any given company.”
Rep. Keith Ellison, D-Minn., has also offered a dissent to the process. “Something is deeply wrong with our economy & democracy when local government offer up their tax base to a corporation worth over $500 billion,” he wrote on Twitter.
Tax breaks to Amazon promised by New Jersey: $7 billion. Tax breaks promised by Illinois: $2 billion. Something is deeply wrong with our economy & democracy when local governments offer up their tax base to a corporation worth over $500 billion. https://t.co/csnETiF5zT— Rep. Keith Ellison (@keithellison) January 18, 2018
Most public officials have been shy to criticize the Amazon bidding process. Some, such as Sen. Cory Booker, D-N.J., have actively promoted the incentive packages.