Your entire post just described, by definition, a race to the bottom.
Obviously the US is winning that race relative to other developed countries, but I'm staggered you think it's a good thing.
It's absurd to think Amazon is doing NY a favor by bringing more than $0.
That's like if I walk into McDonald's looking for a job and they say to me "Well, you currently earn nothing, so you should be mighty thankful we'll pay you even $1/hr".
There are laws against paying people $1/hr for a very good reason - because if they could corporations would do that to maximize profits. All the employees would suffer. The corporation would make more money.
Which is exactly what's happening with Amazon/NY.
You are right that NY will get more money now that if Amazon had not come, but that's also true that my life would be better getting $1/hr than $0/hr.
But is that a good thing? Do we want people to get paid $1/hr? Does that make for a happy and healthy society? Of course it doesn't, and letting Amazon pay less than they should is exactly the same, and has the same outcomes.
I agree, though in this context we tend to term that "competition". In this case we are watching competition between states and localities to improve themselves and their tax bases. This strikes at the heart of how interstate commerce works and what the rights of the States are.
Sections of the country competing with one another and taking various approaches to the same problems trying to find better solutions and proving them in practice is kinda fundamental to the American Experiment...
Securing infrastructure investments with large corporations is the kind of thing that States are concerned with, and they are supposed to compete for the affection and attention of businesses. Tax code is one of the few levers they can pull in that pursuit.
And I'm really happy when there is competition between Apple and one of their suppliers.
What is really sick about what you're talking about, is that it's competition between trillion-dollar Amazon and regular ordinary tax payers.
When Amazon get the upper hand, they get more money, while the tax payers get crappier schools and government programs.
You are literally talking about a corporation taking ('negotiating') bread from hungry people like it's a good thing.
As GP stated, the alternative is that NY doesn't get Amazon's HQ, and gets 0% of $0.
>You are literally talking about a corporation taking ('negotiating') bread from hungry people like it's a good thing.
If you're going to make such an argument, you might as well claim that they should pay 99% in tax, because any lower a tax rate would be "taking bread from hungry people". Of course, this would be stupid: you'd make more money in year 1, the business would go under, and you're now making squat, and all the poor folks go hungry once more (plus the additional of everyone who just got fired). The percentage is not what matters here.
You could argue instead that the overall country is worse off, but the US is a one that encourages state-level competition, and thats how it goes (ideally, states should be efficient with their limited funds, and taxes should be as low as possible to support their various infrastructures; state-competition encourages this, in the same fashion as any other part of the US economy).
And yet lots of companies pay people more than the minimum wage, for some reason. Doesn't that by itself disprove the "race to the bottom" narrative you are suggesting?
A company can't simply dictate how much it pays you, any more than you can dictate how much it pays you. It's a market - in the best case scenario, both sides have lots of alternatives, and the price you get paid is the best that both of you can do (lowest for them, highest for you).
That's a pretty bad comparison. Why would I take the $1 job? I got way more currently. The only reason I would do it is because I'm trapped and I NEED this $1 to live.
Does NYC is trapped right now? Does they NEED that $1 to live? Not at all, they are perfectly fine, they are the definition of not needing that $1.
So it's more like, you are making 75$/h, Amazon is looking for some part time employee and you do happen to have a few hours left in your week that can fit that. They want to know what you can do for them for theses few hours and you accept after a few rounds of negotiation. It's a 2 ways street, Amazon give to the city and the city give to Amazon. What Amazon offer has a value to the city but what the city offer to Amazon has a value too.
There's no regulation for wage increase, is it? There's only a minimum, because it's when you are at the bottom that it can be abused. Once you are not at the bottom, you can negotiate as much as you want. It's the same here.
The big question is how can we make sure we don't abuse that minimum, but that's a whole other issue.
I grew up in Seattle. I know what Amazon will do, but again, your $1 analogy needs a citation. This is beyond hyperbole.
Every negotiation is "race to the bottom" for the side that is paying - they want to pay as little as possible. However, there is the natural bottom for it - as soon as the deal costs more than it brings in - in fact, as soon as the deal costs more that what it brings in, including reasonable profit - the side that is dissatisfied would refuse to make a deal. What would be the point?
> It's absurd to think Amazon is doing NY a favor by bringing more than $0.
Why is it absurd? If Amazon is doing NY a disfavor, why NY wants it? Do they hate themselves? Are they gluttons for punishment? Were they forced into the deal by a secret Amazon ninja army? No, I don't think so - I think they want the deal because the think the deal is good for them. Of course, you know better, but I think for most people your argument is not exactly obvious. Or correct.
> they say to me "Well, you currently earn nothing, so you should be mighty thankful we'll pay you even $1/hr".
They can. And you can say "go fish, I won't work for $1". And then they'd say "well, how about $10 - would you work for $10?" And you'd say "now you're talking!"
> The corporation would make more money.
No they won't - people wouldn't work for them, and corporation rarely are able to make money when having no employees. That's why only about 2% of the workforce earns minimum wage. One would expect the greedy corporations to pay absolute minimum, right? But they pay way more. You'd have to find a theory that accounts for that. I have one, but looks like you do not.
> Do we want people to get paid $1/hr?
We want people to get paid whatever they can get paid. As we can see, it's in about 98% of cases more than both $1 and minimum wage.
> and letting Amazon pay less than they should is exactly the same, and has the same outcomes.
No it does not. I welcome you to consider why business-to-business transaction is different from person-to-employer relationship (hint: people can go hungry and sick, but corporations rarely die from not being able to locate headquarters in New York). It's a business transaction, one that NY made voluntarily, and one that they expect would be very profitable for them. Of course, as everything in life, they might be wrong - sometimes business transactions go bad - but declaring this transaction is wrong because you could've gotten everything and more for free makes no sense. You couldn't have gotten it for free, and dreaming about it doesn't make current transaction destructive for society, quite the opposite - it brings jobs and investment.
> When a trillion dollar company gets to pay less that they're supposed to, it makes society worse, not better.
That's where you went wrong. A trillion dollar company is not supposed to pay anything to New York. The minimum NY was getting is $0. That's the starting point. Amazon is free to locate HQ in any other place and NY gets $0 from it. Now, NY can negotiate and get more than $0 - or not, and get $0. It's not like Amazon has already build headquarters and paid taxes and then NY decided to give them back a lot of money just out of the blue. It's like Amazon said "I can bring this much money to the table, but what you can do for us so that we choose you? Lower taxes? Better regulations? Something else?" and NYC considered how much Amazon brings to the table and how much they can do to make NYC their choice and they negotiated.
Now you may want to say "if lower taxes makes the city or state competitive and improves outcomes, how comes not everybody gets low taxes?" Good question. Probably the same reason not everybody gets paid six-figure salaries. Some companies (or people) have more economic clout than others and can demand better compensation in exchange for good their bring to the table. If the city (or employer) doesn't want the goods, they are free to refuse the deal.