There was a great Bloomberg Decrypted podcast a couple weeks ago weighing the costs and benefits for a small town in offering a multi-million dollar subsidy for thousands of low-skill Amazon warehouse jobs. Is it really worth subsidizing at all when the government will have to fund various welfare programs to cover the difference between the ~$10.00/hr paid and a livable wage? But since towns compete and prestige is awarded to politicians who win deals, towns race each other to near zero expected value.

https://www.bloomberg.com/news/articles/2017-03-14/your-tax-...

But they already have to pay welfare for those people, right? Or is Amazon bringing new low income residents?

Exactly. It's $10/hr less that has to be covered than before. Plus the ware house drives local commercial traffic, workers have to eat, etc.

So they weren't eating before?

No the point is that even at $10/hour it's better than the same people not working at all.

Do you disagree?

The New York Times also did a big piece showing that these deals were almost always bad ones. The thing is that politicians have a simply ideological commitment to not intervene more directly.

The politicians do intervene directly

>cities compete to offer the biggest tax

So it would be actually better if they did less intervening, by not offering tax breaks to Amazon.

When I say "intervene directly" I mean more like directly employing people.

Makes me wonder if political deals to bring in military-industrial complex jobs at military bases and arms manufacturing plants and the like are any better. They at least provide better compensation to the workers, right?

Towns like to attract military bases because they bring in a large population that is employed requires no loca services (since it's handled by the armed forces), usually well behaved which spends its income locally. Bases also bring 100s of civilian jobs and support local businesses.

Yeah, but military Keynesianism also involves a lot of the taxpayer dollars lining the pockets of arms manufacturers and contributes to belligerent foreign policy. It's worth asking whether the same money could be used to employ people to do something other than building more F-35s.

You're thinking large-scale, not small-scale. Locally, building more F-35s is good for the local economy and keeps people employed, and the negative effects are minimal if any. Nationally, it's a different picture. Why would local politicians care about things on a national scale, rather than what's good in the short term for their little town where they're trying to get re-elected?

Military bases also pay no local taxes so they don't increase their tax revenue.

They pay certain taxes e.g sales taxes, they pay salaries to civilians that work on base and they do not really use any of the local services that are tax funded, police, fire department, medical and social services all provided by the DOD.

No, the federal government does not pay state or local sales tax. Bases also open and operate large sales tax free stores for service member and family use (base exchanges).

Military housing, as long as owned directly by the federal government, doesn't pay property taxes and the residents do use local police, fire dept, and schools as well as drive on local roads. Any local or state services are fully available to to them just as any other resident. I've also personally seen both local and state police respond to emergencies at the base.

Service members can also elect to file income taxes in the state they lived in when they were called to active duty rather than their duty station location.

I'm not saying military bases don't add to the local economy, they do, just not anything like a civilian operation of a similar size.

>Bases also open and operate large sales tax free stores for service member and family use (base exchanges).

Those aren't accessible to all the civilian workers and contractors who work on-base.

>Military housing, as long as owned directly by the federal government, doesn't pay property taxes

Civilian workers and contractors are not military, and don't use this housing. They live off-base, and pay property taxes and sales taxes. With the generous paychecks they get (relative to the locals who work at Walmart), they can afford to buy or build much larger houses and nicer cars, so they pay a LOT more in property taxes.

>I'm not saying military bases don't add to the local economy, they do, just not anything like a civilian operation of a similar size.

No, what you're really saying is that you have no clue at all what goes on on a military base, and you have some ignorant idea that everyone there is in the military when in fact it's usually a small minority of people on-base who are active-duty military.

It's certainly not the most efficient way to generate employment but these guys know where their bread is buttered.

Mother Jones did a major piece on this several years ago.

http://www.motherjones.com/politics/2012/02/mac-mcclelland-f...

I guess I'm curious how you came to the conclusion they're major employers where their warehouses are. As far as I can tell each warehouse is about 1,000 full-time jobs. If I look at a list of warehouse locations:

https://en.wikipedia.org/wiki/List_of_Amazon.com_locations

They're pretty much universally a rounding error for total population and jobs in their respective metro areas.

That's tens of millions of dollars in salaries injected into the local economy from one employer, not to mention the other additions like local taxes and utility spending. 1000 jobs is significant.

Wait, WHAT? The average Amazon warehouse worker makes $13/hr. That's ~$27,000/yr BEFORE taxes. In other words: any employee making that salary and actually trying to raise a family is collecting more from the government than they're paying in. They aren't contributing anything to the local economy, they're draining it just like Walmart.

How does an Amazon warehouse drain money from a local economy? Purchases at Wal-mart export your money outside of a local economy, but the presence of an Amazon warehouse doesn't really change the number of purchases you'll be making at Amazon in your town.

So we wait until 990 of those jobs are lost to automation ... then we order pitchforks from Amazon ?

Then Amazon can locate its facilities even farther from population centers where there is no municipal or even county government to speak of.

1,000 full time employees is pretty big these days. The highly touted Carrier deal amounted to maybe 700 jobs. Elizabeth Warren made an announcement about the big new Amazon distribution center in Fall River. It's supposedly Amazon's biggest, and I recall it was about 1,000 jobs. So they are doing more with the same headcount.

1,000 jobs is about what the American economy creates every two hours. Politicians tout these deals because they know that most voters are clueless about the magnitudes involved.

You can't​ directly compare 1000 jobs in the entirety of the US and 1000 jobs in a small town with nothing else going on.

I can when national-level politicians are devoting time to them and then bragging about it.

That's true but my point was that jobs are no longer created in fleets of tens of thousands at one throw. Even the largest distribution facility of the world's eighth largest retailer has 1,000 jobs in a facility that probably operates two or three shifts weekdays and weekends. That's a very lean crew on each shift.

It's about name recognition, not job count. Amazon is seen as a cutting edge, high-tech employer. It looks goods when politicians say "Welcoming $COOL_COMPANY_X into our area!", it helps people feel important. It doesn't really matter whether they're bring 50 jobs or 5000; what matters is people can say "Yeah, Amazon is just up the street".

Fall River is also extremely economically depressed. I thought that was a typical case but the list of locations suggests maybe that's not entirely true.

Pretty smart on Amazon's part. Locate in depressed areas: the work doesn't require any real skills, the wages, working hours and conditions can be poor because there's no other real competition for employment, and dispite all that the local politicans love you for being an improvement on what they had before.

It's a tried and true formula.

Massachusetts isn't as big a boomtown as some areas, but population grew about 4% in a region better known for losing population. Fall River isn't as much a backwater as it used to be.

Do you mean Fall River? I'm certainly not arguing that Massachusetts, as a whole, is economically depressed.

Fall River may get commuter rail. Then cheap rents will be over there and in New Bedford, which are both on the ocean. To get really economically depressed areas, you have to go to Springfield, which is still our meth lab capital.

The whole state is a backwater. The part inside 495 just happens to be dying more slowly because they've got higher education medical and some tech industry.

Hopefully you're right (for the employee's sake). But given the Bezos/Trump feud, if I were Bezos I'd be very cautious about giving the feds any valid reason (with lots of precedence) to shut down any warehouses for an investigation.

That's why this is done by the Feds rather than local cops. They don't have to care about local employment.