How Amazon’s HQ2 Presents an Opportunity for the Democratic Socialist Movement to Prove Itself
Co-opting Amazon’s corporate privilege to get a high-speed rail system for everyone else.
This month, Amazon, a multi-billion dollar company best known for its e-commerce platform, Web Services, and video streaming service, announced that it would be opening at least two new locations as part of its HQ2 initiative. Long Island City, New York and Arlington, Virginia — already wealthy areas plugged into some of the nation’s most commercially active regions — will serve as the homes of these new Amazon outposts after their cities’ bids won in a nationally followed competition to be the city Amazon would pick.
While of course the announcement from Amazon drew a variety of opinions from across the political and economic spectrum, it struck me that this could in fact be an opportunity for the rest of the country.
One of the public’s most cited grievances towards Amazon is the unjust preferential treatment it receives as a multi-billion dollar company, in comparison with middle and low income Americans. New Yorkers have long bemoaned the crumbling NYC Subway system, but only when Amazon is about to move does there a promise to fix anything.
Many of those supportive of Amazon’s decision have trumpeted that these new headquarters will create 50,000 new jobs, while critics have pointed out that those jobs will largely go to people moving to the NYC and NoVA metro areas, driving up costs of living for existing residents.
While the areas Amazon is moving to are already some of the wealthiest in the country, they are likely to become more expensive. Amazon’s average salary for a high skill employee is $150,000; unable to finance the cost of living for people making the high salaries that working for Amazon (or countless other companies in STEM and financial industries) yields, it can be reasonably expected that many could be priced out and forced to relocate.
There is already an economic migration pattern of businesses and residents alike relocating to Philadelphia for its cheaper rents and cost of living. As New York and Washington DC have continued to see their costs of living rise, Philadelphia has remained relatively cheaper, while still being well plugged into regional transportation networks. As a result, many on the East Coast have relocated to Philadelphia without having to change offices or jobs. Currently, from Philadelphia, it takes an hour (with the right train) to reach NYC, and just under two hours to reach DC. Specifically, with regard to New York, many living in the city spend nearly as much time commuting to and from their jobs, only in that case to and from a shoebox in Brooklyn rather than a spacious studio in Fishtown.
There is another trend we should be mindful of in this discussion. Young Americans want a lifestyle that enriches them and they want to share it with others. They already spend more money and time on traveling, experiences and lifestyle than on material objects. If their dollars will go seven times farther in Philadelphia than in NYC and Northern Virginia — where houses were pulled off the market after Amazon’s big news came out — they will be all too happy to elongate their daily trip.
Philadelphia is already known as a top American city for dining, entertainment, history, and culture. Residents enjoy an affordable cost of living, have seen an increase in economic development over the past few years, and can experience an aesthetically unique and enriched city. Philadelphia has an abundance of public art installations that can be found across the city, as well as some of America’s most important historical landmarks.
America’s economy is a consumer one, and the younger generations may be our nation’s greatest consumer generation. Philadelphia is regionally poised to absorb not only the high skill employees attracted to big cities by Amazon and similar companies, but also to see an economic catalyst from the increase of money circulating on consumption of experiences and services. In that sense, there is some truth to the argument here that rising tides raise all ships.
As real estate in big cities becomes corporatized, it will be the residential areas that will become the cultural and economic life forces of regions. Philadelphia will stand to benefit from its existing reputation for good dining, history and culture, and night life. Smaller cities around large commercial centers like Lancaster, Trenton, Camden, as well as once-large cities like Baltimore, could all see a similar pattern, but it all depends on how the politics play out.
It’s not that centrist and conservative arguments that Amazon‘s new headquarters will bring jobs and a boost to the economy are wrong. It’s that their conceptions of how the economy will improve are skewed toward the already-privileged; in this case, more opportunity and growth is inextricable from more gentrification, and they are ok with that as a natural and unavoidable function of the free market.
Amazon is only the celebrity face in an already existing trend, where bright college grads and young professionals take jobs in big cities, often far from their hometowns. This is a huge factor in why some of the highest real estate prices are in New York, Washington DC, and Silicon Valley.
However, those who provide goods and services to this big money can still see their bottom lines rise. Their ability to charge higher prices will also put more in their pockets, theoretically, to maintain living in their existing place of residence or to relocate comfortably.
Commercially developing locales means higher real estate value (a springboard for further development vis-a-vis increased borrowing power). Greater incomes and access to credit would give those being displaced a more tangible and impactful ability to build businesses and make investments in their areas.
While this idea does not address root causes of economic inequalities in American life it is a reality that, if acknowledged, can be turned into an opportunity. There is a lot that needs to be said about tax reform, racist legacies, educational injustice, etc. Those are all important issues that need to be addressed; however, for now, I’d like to focus on how what many are lamenting as another corporate tax-break could be politically leveraged for a major win for the everyday American. While there is nothing good or decent about gentrification it is happening, and this argument tries to, as best it can, argue for a policy that — while not addressing the complex social and political failures gentrification represents — would help those being most negatively impacted have a chance to gain from it.
Voters and Democratic Socialist candidates on the East Coast should push for for a high-speed rail line from Burlington to Savannah (or a line with similar endpoints). Not only can they argue that increased migration to urban centers for high paying jobs — and the rent hikes that follow such a trend — will require them and new inhabitants to move to more affordable residencies further outside the city they work in, but there is the economy-as-a-whole argument.
Infrastructural integration means stronger market integration: more people can patron more businesses with more ease. MORE. The costs of doing business, such as transporting goods to market, are also lowered. It’s easier to do business, and business is more profitable due to higher margins from lower costs. It would be hard to see a “free market” conservative argue with that logic.
And if lower and middle class people are displaced by big money and begin working in ancillary enterprises, then it only makes sense to integrate them further into the economy and give them a chance, not weaken their ability to make a living to the point that we find ourselves with a (real, not Fox News-type) welfare crisis. “Ordinary” people are riding a wave of populism on both ends of the political spectrum, and if the “establishment” does not do something big to ease that bubbling tsunami we might find ourselves with a Napoleon or a Robespierre.
That dystopia aside, while there would surely be arguments by tycoons afraid of losing control of their labor forces to economic opportunity (another boon for a moral economy), the prospect of low-cost travel up and down the coast would seem more appealing. It could be the specific policy issue that could overcome the partisan divide, and if Democratic Socialists are the ones to champion it it could serve as a lightning rod issue for a nascent party-to-be, or Democratic Party-wing.
It is also my inclination to argue that the rail service should either be free or incredibly cheap. That is the equalizing element in the market that gives equal opportunity — not outcomes — to people. Those will already have the greatest economic burden in this social force — minorities, single mothers, the poor- should not face any barriers in turning those changes into business opportunities. If there is a cost to traveling to their former home/place of business, then their operating costs are higher, also reinforcing an existing market injustice. Given the unforgiving nature of gentrification the least that could be done is the implementation of a sympathetic public policy, if nothing else.
As I said before, there’s a lot to be said about tax reform as well, but that’s for another time.
After Amazon announced its new headquarters, many pointed out the painfully obvious: that the issue of our crumbling public infrastructure seems to only get addressed when it serves the interests of massive corporations. Already, commentators and pundits on the left derided the pontifical supplication by mayors and governors to bring Amazon to their domains. Then, in something evoking Trump’s inviting Mitt Romney to dinner (ostensibly in order to explore a Secretary of State nomination) only to humiliate him later that week, Bezos chose two opulent metro centers for his new locations, leveraging huge tax cuts and public works in the process.
Voters should continue to choose leaders that will challenge this type of corporate privilege. If municipalities and cities only put resources toward public works when it will attract companies like Amazon it is a failure of democracy that should unsettle Americans of all political affiliations. It’s an issue that needs to be addressed at its core.
But for the meantime, we should lean into it to get our just compensation. If the cities big companies choose to call home become unlivable for the majority of Americans, then something needs to be done to balance out society, and by extension, the market. There are big ideological wins on the horizon, but tactical wins that prove the Democratic Socialist platform viable will make those big wins possible. And who doesn’t love a better economy?
In the 1950s the then-new Interstate Highway System jolted the economy even further than the production for WWII already had, lowering transportation costs and widening the area of operation for most people. Suburbs popped up, giving many access to real estate investments that served as an asset to borrow against when starting new businesses. For those with no opportunity around them the highway provided many a way to find better lives and jobs.
A new high-speed rail system linking the East Coast is the natural next step, and it serves the needs of everybody, money big, medium, and small alike. It is also compatible with the direction the country is going in socially. Millennials spend more than any other generation on experiences, traveling not to buy tchotchkes, but to share their latest adventure online. As more money follows them, more money comes into scenes and lifestyles, new neighborhoods and trendy streets.
Smaller cities and towns as well would benefit from the commercial dollars generated and those brought by new residents and visitors. As corporate money spills out across the NYC and DC metro areas, and as more companies flock to Philly for its low costs, then the nearby areas can only be expected to benefit if they are plugged into a robust regional transit system. Just as Philadelphia will benefit from its peripheral location to increased commercial activity, large towns like Media, Norristown, and King of Prussia would in tow benefit from Philadelphia’s economic growth.
On that point it is a reciprocal relationship where nearby areas will benefit economically if they can reach new opportunities. Those new opportunities and enterprises will be the things that we as a nation can use to send travelers headed abroad to instead go just a few states up or down to see one of the new cultural developments of a specific place. Domestic commerce and sharing of cultural wealth could be a big economic driver and a vehicle for healing a divided nation.
Philadelphia is in the most advantageous position for such a cultural and economic development, given its existing size and convenient location. Pennsylvania is also plentiful with land and already hosts many natural, historical, and cultural attractions. On top of everything else, Philly is politically a blue fortress, and would be a prime location to begin gaining support from its red surroundings via a regional integration project like this.
While it may seem defeatist to lean into these trends rather than fight them alone, I believe that you need to play the game to change it. Being involved with the economy as it changes gives us all a stake in the direction it goes in, and in a democracy, our votes let us shape that direction. Too often conservatives dismiss those on the left as being resigned toward hard work and engaging in commerce. But here is a chance to use their own terms to tell them otherwise. Democratic Socialists could easily pull working class white voters into their ranks by doing as much.
Yes, there are numerous economic and social woes corrupting our democracy, from historical legacies to gerrymandering, but creating more opportunities for those already getting the short end of the stick to recapture some of the dollars big money brings will increase that segment of society’s clout. More $27 dollar donations and you have more candidates like Bernie Sanders and Alexandria Ocasio-Cortez elected. The more of them we get elected the sooner we check Amazon’s corporate privilege.