This week, word leaked that Amazon may be close to finalizing a deal to set up a major operation in Long Island City, Queens. The news, which was embraced with peak sycophancy by Gov. Andrew Cuomo — he literally offered to change his name to “Amazon Cuomo” to make it happen — came with a slap in the face to New York and every other state that bid for this deal.
For the past year, Amazon has been promoting a cruel tournament, asking cities to compete for the privilege of hosting a second headquarters outside Seattle — what the company called “HQ2.” The winner was promised tens of thousands of jobs and the tempting vision of becoming a tech hub to rival San Francisco. Hundreds of cities prostrated themselves before Amazon, offering the company tax breaks and subsidies along with valuable data, such as infrastructure plans, to which no other company had access.
But as details of the reported deal trickle out, it seems clear that this whole tournament has been a sham. There is no HQ2. Instead, Amazon is expected to announce a fairly routine expansion, adding new satellites in Queens and in Northern Virginia. The countless hours spent courting Amazon were undoubtedly valuable for Amazon: the company gained free media coverage and untold amounts of economic data from each bidding city. But it has been a terrible waste for those cities and states whose public servants labored to win a prize that would never materialize. Even for the biggest Amazon boosters, such casual dishonesty should be cause for consternation. It’s like getting a marriage offer along with a confession of infidelity.
The tactic is all too familiar to the merchants who rely on Amazon’s platform. Amazon starts these relationships by inflating expectations. Then, it uses its bargaining power to demand highly favorable terms, including requiring merchants to share sales data that they would normally never share with an outside company. Amazon extracts as much value and data as possible and shrugs off the initial visions, indifferent to whether these merchants go out of business. After making them dependent, Amazon sets all the terms of engagement, and the merchant is left with a terrible choice: quit Amazon and lose their business, or agree to a serf-like relationship. Most agree to serfdom.
If Amazon indeed locates a substantial part of its business in New York, serfdom is the style of “partnership” the city should expect. Despite the familiar promises, Amazon is not a good partner. Not for the cities it occupies, not for the merchants who depend on it, not for the workers it employs. The company does not seek partnership; it seeks control. Seattle’s experience shows that becoming dependent on Amazon did not lead to broader wealth; it has pushed up home prices and pushed down wages. Amazon also threw its political weight around in the city, spending millions in a brutal campaign to resist corporate taxes in Seattle.
Unfortunately, New York has a long history of playing the fool in corporate relationships. Our state already ranks last in the nation in returns on billions of dollars in corporate giveaways. Its economic development programs are the most expensive in the country, amounting to 76 percent of the state’s gross tax revenue. In 2015, Mr. Cuomo gave away $8.25 billion to corporations — as much as the next three states combined.
If Mr. Cuomo gets his way, New York State will reward a mega-corporation that specializes in extracting money out of local neighborhoods. For every job Amazon may create today, hundreds of jobs at small businesses could be lost.
It would be a special insult in New York City to sell out to a company so closely identified with squashing small merchants, stifling workers’ rights and undermining the publishing and ideas industry.
New York City is the heart and soul of the truly independent small business: idiosyncratic merchants that are rooted in their communities, making life rich, beautiful and chaotic for all New Yorkers. They include not only retail businesses, but also the dreamers who make things and sell them, such as CW Pencil Enterprise, which sells curated pencils in Manhattan; Pintrill, a Brooklyn-based company that creates and trades small pins, and Shine Electronics, an electronic store that buys and resells used cellphones, with its headquarters in Long Island City. No company has done more to decimate the power of these small businesses than Amazon has.
New York has a long, strong history of union power, and Amazon has a long history of union busting. In a 45-minute video leaked by Gizmodo, Amazon’s anti-union tactics were revealed, as Whole Foods team leaders were instructed in how to quell unionization after Amazon bought the company.
Finally, Amazon has abused its power as gatekeeper of ideas in our culture. As Franklin Foer details in his book World Without Mind, when Hachette, the publisher, dared to challenge some of Amazon’s contract demands in 2014, shipments to Amazon customers of books published by Hachette were delayed by weeks. Publishers are frightened to speak out against Amazon for fear that it will harm book sales. For New York to prostrate itself in front of a company trying to control the flow of ideas in America would be an insult to our commitment to open, diverse debate.
At this point, it looks like Mr. Cuomo wants to rush into a deal with Amazon before there is any scrutiny, but New York can and should say no, at least until we know a lot more. The public should see correspondences between the Cuomo administration and Amazon to learn what promises have been made. The State Senate should demand a full study to examine the impact of any proposed deal on transportation and the cost of housing. We should hold hearings on Amazon’s union-busting practices.
In other words, Mr. Cuomo and the rest of New York’s public officials should fulfill their civic duty and reveal exactly what Amazon is promising, before entering into a relationship that will compromise the dignity and livelihoods of the people of our state.
Ron Kim (@rontkim) represents parts of Queens in the New York State Assembly. Zephyr Teachout (@ZephyrTeachout), an associate professor of law at Fordham, is the author of “Corruption in America: From Benjamin Franklin’s Snuff Box to Citizens United.”