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Different take on Amazon HQ2s: Tough questions on company's social responsibilities

 

What's not to like when a company announces locations for a mega expansion creating at least 50,000 jobs?

That, of course, is what Amazon announced this week when it revealed its plans to locate its "second headquarters" in New York City, New York and Arlington, Virginia, receiving some $3 billion in incentives from governments in those states. 

The plan received plaudits from many sources, not the least of which came from political leaders and business executives in those regions.

New York Governor Andrew Cuomo: "My view is 25,000 jobs [at the New York City location] is a big transformative step" in diversifying the state's economy and reaching its goal of making New York a tech center "Gov. Cuomo takes aim at critics of Amazon deal" . Earlier, he predicted that the state would recoup nine times the amount it has agreed to provide Amazon through tax revenue.

New York City Mayor Bill de Blasio and business leaders also said the deal will solidify the city's prominence in the tech industry and enrich the local economy."

 

So what's not to like about private-public cooperation that apparently has such upside? 

Well, there's this ...

In New York City, likely neighbors at the building site, largely via their elected representatives, had plenty to say in opposition: "Amazon HQ2 deal protested by Queens Politicians" :

"Why is Amazon entitled to $3 billion tax dollars? Why can Google bring 20,000 jobs here without public subsidy?"

On a national scale, an analysis by James B. Stewart in today's New York Times "Why Amazon Chose the Wrong Locations for its HQ2" :

"... neither New York City nor Washington [region] needed Amazon. They're already thriving and bustling with well-educated millennials ... 'Labor force' ranked third on Amazon's list of criteria, but in the end, it seemed to be determinative [even beyond the financial incentives]."

Stewart visits the heart of a politically (and geographically) divided America, quoting a corporate site selection expert: "Amazon's choice 'only reaffirms and cements the idea that we have two countries right now, the coast and the interior ... Picking one of those ["interior"] cities  would have been transformative  ... there are great places to live in America that don't offer ocean views and cost $3,000-a-square-foot."

And to the perhaps philosophical question of "what does a company owe its hometown(s) and country?" , Stewart: "It's not Amazon's obligation to help heal the growing divide between red and blue America... At the same time, the company... might have considered that Amazon's success has hollowed out aging downtowns and shopping centers across America, and that having at least one headquarters away from the coasts might have generated considerable political good will."

More in the-business-in-society trenches, this observation in a Times  report, by Ben Casselman:

"Economists have long criticized [site selection] tax incentives as inefficient and unnecessary, arguing that they pit cities and states against each other and leave less money for education and public works that ultimately do more to lift local economies and improve livelihoods. Research has shown that incentives play at most a small role in corporate decisions, meaning governments often end up paying businesses to do what they would have done anyway."

Finally, this on how such site-selection business decisions are playing out in Europe vs the UK as the Brexit debate approaches climax:

Sarah O'Connor in the Financial Times -

"... leaving the EU will probably make Britain more vulnerable to corporate blackmail as it tries to retain and attract jobs.

 "Companies should resist the temptation. It might be in the interests of shareholders in the narrow sense, but it is time to widen the lens.

"By treating people's jobs as bargaining chips, and their hometowns as dots on a corporate map, companies are instilling a sense of insecurity in people that is eroding their support for capitalism and globalization. It will come back to bite them in the end."

 

Widening the lens, indeed.

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