Amazon recently announced that it has begun an international search for the city that will house its second headquarters (HQ2). The company has resorted to building HQ2 because its original headquarters’ explosive growth has given the city of Seattle a tidal wave of high housing prices and congestion.
The company has put out an open call for cities and states to make bids, dangling 50,000 high paying jobs as the promised jewel. Gov. Mark Dayton has confirmed that Minnesota will be making a confidential bid, which could include economic assistance in the form of tax breaks, free land and rolled back regulations.
States and municipalities have long used economic assistance to attract companies. Minnesota has an office of economic development dedicated to this. However, another name for this is corporate welfare, and lately, companies across the U.S. have held jobs hostage to pilfer governments out of their tax dollars. Minnesota should not offer corporate welfare in its bid to Amazon, as doing so would show area-companies that they can ask for hand-outs and divert resources from the real corporate attractions: strong infrastructure and education systems.
Handing out corporate welfare to Amazon would expose Minnesota to a dangerous, never-ending game of bidding for jobs. It would indicate to the corporations in our area that Minnesota will, as Jeff Spross of “The Week” creatively describes it, “fiscally self-immolate” for jobs. The states of Kansas and Missouri have learned this lesson all too well.
Applebee’s convinced Kansas to give them $12 million to stay headquartered in the state, then, six years later, took another $12 million to move across the border to Kansas City, Missouri. Ever an example of corporate accountability, Applebee’s waited four years then moved to California in 2015. Applebee’s was one of many companies in the KC area who played this economic game between states, pushing each state to surrender more of its taxpayer’s money. In total, the states spent nearly half a billion dollars in their border war for “jobs.”
Corporate welfare is a cruel irony for taxpayers. The same year Kansas gave AMC Theaters $50 million to move from Missouri, it cut its education budget by $100 million, according to NPR.
Furthermore, each dollar that Minnesota would give up to Amazon is a dollar not advancing our education system and infrastructure, which attract and anchor companies to their communities more than anything else. Researchers at the Urban Institute, a Washington-based think tank, found that “Corporate site selection professionals rank the availability of skilled labor and adequate land and infrastructure higher than they rank tax policy.”
Investments in education and infrastructure take longer to deliver returns, but they are primary drivers of economic growth.
Our state has signaled that these drivers should take the backseat. Tuition at the University of Minnesota has risen nearly 40 percent since 2008, as the Minnesota Daily reported. Additionally, the American Society of Civil Engineers (ASCE) Infrastructure Report Card gave Minnesota a “D+” rating. We have numerous infrastructure needs, like structurally deficient bridges and high hazard dams that need to be taken care of.
There is no need to shovel money to a corporate behemoth like Amazon when our citizens are in a pressure cooker of finances. Dayton should offer a bid for HQ2, but he and our lawmakers must not fiscally forsake taxpayers. Minnesota must not sacrifice the welfare of its citizens for the tantalizing PR-promise of jobs. Should Amazon move to Minnesota, let us welcome them with open minds, not open wallets.
