A Major Rebuke to Corporate Arrogance

February 14th, 2019 by Phil Mattera

New York City’s progressive elected officials, unions and community activists have just delivered what may be the most remarkable rebuke to corporate influence ever seen in the United States. In forcing Amazon.com to drop its plan for a satellite headquarters campus with 25,000 employees, arranged through a deal including some $3 billion in subsidies, progressives have up-ended a decades-old dynamic in which large corporations have used job creation promises to get state and local officials to hand over vast amounts of taxpayer funds to underwrite private business expansion.

Traditionally, opponents of big subsidy deals were accused of being job killers and of ruining the “business climate.” Amazon’s opponents in New York overrode those criticisms with their arguments that the giant retailer did not need or deserve enormous tax breaks and that the city should be devoting its financial resources to more pressing public needs.

Part of what fueled the opposition was Amazon’s reputation as a low-road employer, especially in its distribution centers. The company made no attempt to hide this fact. When asked during a city council meeting whether Amazon would remain neutral during any organizing drives at its facilities, a company executive quickly replied: “No.”

What also helped is that New York’s economy is far from desperate and is much larger than the arenas in which Amazon is used to operating. For many places, the prospect of thousands of jobs could be a matter of survival. That’s why southeastern Wisconsin was willing to offer Foxconn billions in subsidies for a flat-screen plant that probably will never be built.

In New York, 25,000 jobs were seen less as the basis for an economic transformation and more as a recipe for a worsening of the city’s severe housing and transit problems. The side effects of a major project, which in the past were usually an afterthought, in this case took center stage.

More broadly speaking, what probably did Amazon in was its arrogance. It had spent more than a year conducting an elaborate HQ2 competition in which officials from more than 200 localities eagerly participated. Amazon came to view itself as kind of corporate divinity, to which communities were supposed to bow down.

Although Gov. Cuomo and Mayor de Blasio were among those participants, the people of New York were a lot less inclined to play the game. They simply could not understand why a megacorporation controlled by the wealthiest man in the world needed a handout from them in order to expand its operations. By scorning Amazon, New Yorkers are sending a powerful message to all large corporations: you should no longer assume that by dangling dubious promises of job creation you can raid public resources and ignore the social impacts of your expanded operations.  Ask not what our communities can do for you, ask what you can do for us.

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