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Amazon’s pending layoffs prompt look at its $5.1 billion in state and local subsidies, including $732 million here

Thursday, Nov 17, 2022 - Posted by Isabel Miller

* The Alton Telegraph with lawmaker reaction

Amazon could relieve 10,000 employees of their jobs as soon as this week, according to a report by the New York Times.

Cuts could come in areas such as devices, retail and human resources, the report says. However, the total layoff number reportedly remains fluid, yet the Times piece says 10,000 would represent 3% of the corporate employees and less than 1% of the global workforce. […]

Amazon has 14 fulfillment facilities in Illinois alone, and two in Missouri (both in the St. Louis area), according to an August 2022 report by Tinuiti. The St. Louis region of Missouri and Illinois has four total fulfillment centers. The facility in Edwardsville, Illinois made national news near the end of 2021 after it was destroyed by a December tornado — six people were killed.

Illinois State Senator Steve McClure, who represents the 50th district, which includes northern parts of St. Louis’ Metro East, said he finds the announcement odd as the busy Christmas season approaches.

“I’m just hopeful that it’s not going to affect the state of Illinois because what an awful time to lose a job, right before the holidays,” he said Monday. “Maybe it’s a sign of issues with the larger economy? Obviously, there are issues with inflation and everything else right now, but certainly, it’s troubling.”

The cuts are mostly corporate staff, according to the WSJ

* According to Good Jobs First, since 2016 Amazon has been handed $731,973,199 in state and (mostly) local subsidies in Illinois alone. WBEZ reported in 2020 that Amazon’s warehouses came with high taxpayer assistance

The Condor pitchman, developer Mark Goode, promised a new, $150 million warehouse that would bring 800 jobs to the cash-strapped, predominantly African American suburb 20 miles south of Chicago. But there was a catch. Several catches.

First, trustees had to keep the identity of the company behind the project a secret, at least until the deal was sealed. Second, they had to promise more than $100 million in future tax revenues to help pay for it.

And third, they had to ram through a vote on the deal to meet the project’s construction timeline, which put the first shovel in the ground just weeks later on April 1. It was a demand that prompted trustees to bypass their practice that spreads such big decisions over three meetings to give the public a chance to have its say. […]

Amazon has been quietly cutting such deals in and around Chicago since 2015, winning tax breaks and public incentives to build 36 warehouses as part of its nationwide effort to expand its own distribution system, cut its dependence on rival shippers like the U.S. Postal Service and bolster its famous promises of next-day delivery.To help pay for its vast expansion, the company and its developers have won at least $741 million in taxpayer-funded incentives in northeast Illinois alone, according to a Better Government Association/WBEZ investigation.

An examination of public records from more than two dozen municipalities provides new details in Amazon’s six-year effort, revealing a patchwork of nondisclosure agreements, a lack of transparency during negotiations and suburbs pitted against each other to secure the most favorable deal.

* Good Jobs First press release…

Amazon.com, Inc. has squeezed more than $5.1 billion from U.S. states and localities in economic development subsidies. This is according to subsidy watchdog Good Jobs First, which posted recent tax-break data at its Amazon Tracker  database documenting hundreds of incentive deals given to the retail giant.
 
Amazon has also continued to reap subsidies around the world, as first documented  by Good Jobs First last February. While the costs of those non-U.S. deals are less-well disclosed, Good Jobs First noted likely new subsidies since February given to the company in Germany, Sweden, and the United Kingdom.
 
Good Jobs First released the new findings as part of the global “Make Amazon Pay” campaign featuring events in many nations on Black Friday (November 25). 
 
Most of the U.S. subsidy packages are for warehouses, even though Amazon’s rapid-delivery Prime business model compels it to build hundreds of such facilities close to affluent communities. Amazon also recently announced it will lay off thousands of workers and cancel some of its distribution expansion plans, admitting it overbuilt. While the company has failed to sign its first collective bargaining agreement with warehouse workers who have voted to unionize, Amazon founder Jeff Bezos is scrubbing his image with charitable-giving announcements
 
“Governments are wasting huge sums subsidizing Amazon even as the pandemic drove record growth for the company, and repeated exposés have shown the deplorable working conditions of its warehouse workers and the power it has to drive small businesses out of the marketplace,” said Good Jobs First Senior Research Analyst Kasia Tarczynska, who maintains Amazon Tracker. “Amazon must stop squeezing communities.”

* Explore the database: goodjobsfirst.org/amazon-tracker
 
“Working families want justice, not charity, from Amazon,” said Greg LeRoy, Good Jobs First’s executive director. “That means paying taxes like everyone else — with no subsidy tax breaks — and recognizing workers with a bona fide union contract.” 
 
Within the last two years: 
 

    * Amazon received one of its biggest packages ever in Niagara County, New York. In exchange for $124 million, Amazon promised to create 950 jobs paying roughly the county’s minimum wage when the warehouse opens: $15 an hour. The jobs, per the agreement, can be part-time or contract workers employed by temp agencies. 

    * Blount County, Tennessee, committed $12 million for road improvements necessitated by an Amazon warehouse. Amazon will make payments for that work via a Payment in Lieu of Taxes (PILOT) agreement over the next 20 years, instead of paying property taxes that would have gone to educate kids, maintain parks, help veterans, or beef up workforce development. (The county did not disclose Amazon as the beneficiary of this deal until after approval, and local development officials erroneously claimed Amazon was getting no subsidies).

    * A developer that will house an Amazon warehouse is benefiting from a tax increment financing (TIF) deal that will lower its costs by $1.8 million in Charlton, Massachusetts. Per the state, “TIF benefits are expected to be passed through to Amazon who will be creating 1,000 jobs.” The through-payment, which means Amazon is likely paying reduced rent, is another common, back-door tactic used by Amazon. 

    * Not content with Morrow County, Oregon’s lack of sales tax, its cheap power, and bountiful water and land, Amazon got over $51 million for data centers there in 2022. Cloud-computing server farms produce very few permanent jobs. Yet since 2015, Good Jobs First has documented over $224 million in Amazon data center subsidies in Morrow County (voters rejected a school bond in spring 2022, in part because of resentment by voters who felt they were subsidizing Amazon’s free ride, the Oregonian reported).

    * Somewhere in Pennsylvania (poor transparency means the public doesn’t know where), Amazon got nearly $4.5 million in  film subsidies. Expect more of these now in the wake of its acquisition of MGM.

 
Instead of Amazon squeezing workers, the company should pay living wages and stop its aggressive, even potentially illegal responses to organizing efforts. 
 
Instead of squeezing the planet – its carbon dioxide emissions in 2021 were the equivalent of 180 gas-powered plants, the Verge reported - Amazon must work to take meaningful action on climate change.
 
And instead of squeezing communities for every dime, Amazon should pay them when it arrives, for roads, schools, parks, environmental mitigation and everything else other residents and other businesses already pay for.
 
Bottom line: Instead of celebrating a man’s dubious pledge to cherry-pick charitable causes, let’s work to build an economy that properly rewards workers and their support systems for the riches they create and enable.

       

26 Comments
  1. - Early voter - Thursday, Nov 17, 22 @ 12:06 pm:

    Amazon needs to be nationalized if it is allowed to continue at all.


  2. - MisterJayEm - Thursday, Nov 17, 22 @ 12:08 pm:

    “Amazon could relieve 10,000 employees of their jobs as soon as this week”

    Nothing exhibits contempt for workers quite like a multi-billion dollar corporation’s mass layoffs in the run-up to the holiday season.

    – MrJM


  3. - Stormsw7706 - Thursday, Nov 17, 22 @ 12:09 pm:

    Almost a billion in incentives to a successful company headed by one of the worlds richest man. Think what else could’ve been done with that billion dollars. Business incentives talk about jobs created. When the figures are added up over time they always fall short and the per job figures become truly outrageous. The most egregious examples are the TIFs. Not only do they divert money from bedrock community institutions they also a a back door property tax increase. They have devastated Chicago. Props to Mendoza for her sunrise legislation on the ridiculous giveaways


  4. - 1st Ward - Thursday, Nov 17, 22 @ 12:16 pm:

    This is a non-story. Amazon’s headcount has doubled since the end of 2019 from 800K to 1.6MM people today. A 10K reduction is stating they overhired during covid as alot of logistics and tech firms are realizing.


  5. - Sue - Thursday, Nov 17, 22 @ 12:22 pm:

    Don’t think many folks who occupy this blog have an MBA or any background in business. Amazon pays 10’s of billions in payroll taxes and Real Estate taxes. It pays little corporate income tax because the Company has done what even Dems ask- reinvest its profits in the company resulting in it being the biggest of second biggest employer in the US. It has announced that the layoffs are not hitting warehouse employees. Like other tech companies Amazon expanded beyond what is needed in the post pandemic era. Amazon did as much as any company to keep the Country going during the pandemic yet because it doesn’t welcome in unions- progressives hate the Company. For those uninformed- the NLRA affords private sector employees to either Join or not join unions. Unfortunately some people would rather force all employees to join unions even when the vast majority of private sector employees (92 percent) have figured out that being in a union is not in their best interest.


  6. - Three Dimensional Checkers - Thursday, Nov 17, 22 @ 12:27 pm:

    Maybe state law should limit how much in subsidies the municipalities can give for new warehouse construction.


  7. - Jerry - Thursday, Nov 17, 22 @ 12:29 pm:

    $732,000,000.00 in “Free Stuff” (as Republicans like to call it). I hope the state can get its money back. And please tow their trucks that block traffic.


  8. - Pundent - Thursday, Nov 17, 22 @ 12:38 pm:

    We have been subsidizing the demise of traditional retail and allowing Amazon to monopolize the on-line sector. There are consequences in doing so.


  9. - Ebenezer - Thursday, Nov 17, 22 @ 12:41 pm:

    1st Ward +1.
    10K is less than 1% of their workforce, and apparently mostly overheads.

    ==Amazon needs to be nationalized if it is allowed to continue at all.==

    How dare they come to town, hire all these folks and force local companies to raise wages or lose staff. /s


  10. - cermak_rd - Thursday, Nov 17, 22 @ 12:44 pm:

    Amazon warehouses provide immediate employment for people who arrive with few skills other than a willingness to work, though. There aren’t all that many of those sorts of places now. If they could take that human capital and develop it so that people could get training to become logistics people or managers or HR staff or whatever they need, they would be a real asset to their communities.
    My company hires a lot of temps every year, after the folks have lasted a year then they get offered training to develop more specialized skills (which is a win/win both for the company and the employee who now has better options bothin within and without the company.


  11. - Baloneymous - Thursday, Nov 17, 22 @ 12:45 pm:

    ===even when the vast majority of private sector employees (92 percent) have figured out that being in a union is not in their best interest.===

    Tell that to Illinois state workers during the Rauner years. Jeesh.


  12. - Demoralized - Thursday, Nov 17, 22 @ 12:53 pm:

    ==Don’t think many folks who occupy this blog have an MBA or any background in business==

    So what? We can have opinions. And I think that any company that sees fit to layoff employees should have their subsidies examined. They want their cake and to eat it to. I don’t think so.


  13. - Demoralized - Thursday, Nov 17, 22 @ 12:54 pm:

    ==have figured out that being in a union is not in their best interest.==

    And there’s the union hate.


  14. - Oswego Willy - Thursday, Nov 17, 22 @ 12:56 pm:

    ===Real Estate taxes===

    Amazon is/was not getting property tax breaks?

    Huh.


  15. - hisgirlfriday - Thursday, Nov 17, 22 @ 12:56 pm:

    Can’t help but contrast this announcement of Amazon laying off 10,000 people before the holidays with the media tour Jeff Bezos has been on with him seeking public praise for a pledge of giving away most of his $124 Billion fortune before he dies.

    Maybe he can start with donations to the people his old company is laying off?


  16. - snowman61 - Thursday, Nov 17, 22 @ 12:56 pm:

    Amazon is doing what any other company is doing, making promises in exchange for incentives from the State, County or Local governments. Yes it is sad that lay offs are pending and the timing is bad but that is a different issue then the incentives unless of course, Amazon didn’t meet it promises. What would be a great addition to this story is if Amazon is living up to the promises that are being made for the incentives.

    If not, then we should have a big issue and question or revamp the different programs that offer these incentive as well as TIF’s and go back to Amazon to return the incentive. If the promises are kept, do we know if the payoff/incentive is worth it?

    This should be true for any company that receives some type of incentive.


  17. - LakeCo - Thursday, Nov 17, 22 @ 1:05 pm:

    = the vast majority of private sector employees (92 percent) have figured out that being in a union is not in their best interest=

    Sue are you writing for IPI now??
    But those private sector employees sure like things like, you know, the weekend, and 8 hour workdays, and unemployment insurance, and health and safety protections, and the end of child labor, amirite?


  18. - Pundent - Thursday, Nov 17, 22 @ 1:17 pm:

    =Don’t think many folks who occupy this blog have an MBA or any background in business.=

    I’ve got both and they’ve provided me with critical thinking skills. So I find it quite rich to hear that many of us are not smart enough to understand what’s going on. Seems similar to the a lot of post-election rhetoric I’m hearing on how the voters aren’t smart enough to understand the GOP platform.


  19. - Three Dimensional Checkers - Thursday, Nov 17, 22 @ 1:26 pm:

    I would also note that one can consider all the money IDOT and the federal government spends on road repaving an indirect subsidy to Amazon and other shippers. Large trucks destroy highways and roads much faster than cars. There is also a much more efficient way to transport goods, rail, that these companies don’t adopt because of this indirect subsidy.


  20. - Anon because Inside the House - Thursday, Nov 17, 22 @ 2:03 pm:

    ===If they could take that human capital and develop it so that people could get training to become logistics people or managers or HR staff or whatever they need, they would be a real asset to their communities.===

    Amazon does this, with both internal education/hiring options, and external education. https://www.aboutamazon.com/news/workplace/career-choice


  21. - froganon - Thursday, Nov 17, 22 @ 3:44 pm:

    Warehouses generate about a 16% increase in traffic per million sq. ft. of warehouse according to industry sources (looking for the site to post the link). Diesel exhaust is full of fine particulate matter, nano sized particles of soot that migrate through lung tissue into our bodies. WWW.DieselKills.com has the information and sources. We are fighting a million sq. ft. warehouse complex in our area. It is surrounded by subdivisions and recreational facilities. The health consequences of diesel exhaust have made Chicago 3rd in the nation for diesel related deaths. (Jan 20, 2022 www.Chicagotribune.com). These warehouses are a disaster for neighborhoods, our roads and our health. The subsidies that we pay utterly distorts the market place and is ruining our communities.


  22. - Sue - Thursday, Nov 17, 22 @ 3:49 pm:

    Froganon- not to worry - thanks to Biden’s energy policies there is literally hardly any diesel available nationwide. There- problem solved unless you line in the NE and need it to heat your house of business


  23. - Rich Miller - Thursday, Nov 17, 22 @ 3:51 pm:

    ===there is literally hardly any diesel available nationwid===

    Get off TikTok https://apnews.com/article/fact-check-diesel-shortage-151233499119


  24. - Ares - Thursday, Nov 17, 22 @ 4:21 pm:

    I refuse to buy anything from Amazon, and encourage others to do the same. We pay enough in foregone Amazon / Bezos taxes, at the cost of local businesses, and do not need to feed the monster further.


  25. - West Side the Best Side - Thursday, Nov 17, 22 @ 5:49 pm:

    Sue - Are you suggesting that only people with degrees or experience in a particular area should comment on a topic on that area when you mention that you don’t think many people on this blog have an MBA or business background? Would that mean, for example only people with JDs should comment on the SAFE-T Act or only MDs or RNs or the like should comment on medical topics? Wouldn’t that require Rich to have commentators submit resumes so he could moderate comments and only allow those with the right expertise to be posted on any given topic? Wonder where we would see posts from LP.


  26. - Pundent - Thursday, Nov 17, 22 @ 6:41 pm:

    =Are you suggesting that only people with degrees or experience in a particular area should comment on a topic on that area when you mention that you don’t think many people on this blog have an MBA or business background?=

    Best as I can tell she’s suggesting that we get our news from the same site my kid goes on to watch cat videos.


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