Amazon’s HQ2 Spectacle Should Be Illegal
Some back of the envelope math. Amazon is receiving $1.525 billion in incentives from NY state and city, conditional on creating 25,000 jobs (https://www.nytimes.com/2018/11/13/nyregion/amazon-long-isla...). That's $61,000 per job, paid out over 10 years.From a purely fiscal point of view, do we expect these jobs to generate $6100 a year in additional tax revenue for the state and city? That would be the "breakeven point". This could come in the form of additional state and city income taxes, consumption that is taxed, etc. Payscale says the average Amazon software engineer makes around $109k (https://www.payscale.com/research/US/Employer=Amazon.com_Inc...).If we believed that Amazon is actually creating 25,000 NEW jobs, as well as jobs that otherwise would not exist, it seems pretty reasonable to say that the state and city come out ahead net-net. However, I have trouble believing that the "knowledge workers" who will join Amazon would otherwise have been unemployed and underpaid. Factor in the various negative externalities of increased commercial and residential rents for others, potential traffic/congestion issues etc., and it seems like Amazon got a sweetheart deal.