To understand how we arrived at the firestorm over the proposed head tax and Seattle’s largest employer, it’s useful to examine some recent history.
During the Great Recession, after downtown’s keystone employer Washington Mutual collapsed in the largest banking failure in American history, Amazon gave Seattle an unprecedented gift. The company moved from the old PacMed tower on Beacon Hill to a new innovation district being built in once-seedy South Lake Union by Paul Allen’s Vulcan Real Estate.
In the next few years, Amazon branched out far beyond e-commerce to become a technology giant with a seemingly insatiable appetite for office space, and grew to 45,000 well-paid jobs in the central core. This happened at a time of slow job growth nationally and a historic rise in unstable “gigs” instead of real employment, benefits and a path to upward mobility.
This put Seattle at the headwaters — where executive decisions are made, innovation hatched and the best jobs are positioned — of the one sector in the economy that was growing: tech.
The headquarters was unusual in several aspects. For example, it was in the central city, not a suburban office “park.” Employees could live nearby and walk or bike to work. It was far greener than an employment center dependent on single-occupancy car trips. More high-end companies and research outfits joined the innovation district.
From 2010 to June 2017, HQ1 brought $3.7 billion in capital investment, $25.7 billion in employee compensation, $43 million paid for employee transit benefits, and 53,000 additional jobs as a direct result of Amazon direct investments. Hundreds of millions of dollars went to the city treasury thanks to construction fees and taxes.
And Seattle got this windfall with no demand for billions in incentives, unlike Boeing.
Staggering ignorance
Seen in this frame, the Seattle City Council majority support of a tax on large employers and some members’ antipathy toward Amazon is a staggering act of ignorance and destructiveness.
No wonder Amazon opened bids for a second “fully equal” headquarters, notably one with a stable, business-friendly climate. Some 238 localities were willing to give incentives to receive 50,000 high-paid employees and $5 billion in investment. Despite the horror of urbanists over corporate giveaways, many of these cities live in the rough economy that is the norm today.
No wonder Amazon recently put further growth here on hold pending the outcome of the tax vote. This is not posturing. Amazon is a data-driven company, making a rational decision. If there’s bullying or extortion, it’s coming from City Hall.
But it’s wrong to frame this as a battle between City Hall and Amazon. The tax would affect as many as 585 companies in the city limits, from tech giants to local manufacturing concerns.
There’s not an evil Big Economy and a cuddly Small Economy. There’s only one economy. Its historic boom generated $454 million in city taxes in 2016.
Why should Seattle unilaterally disarm? We would be worse off, including in having the means to enact effective compassionate programs, without Amazon.
Jon Talton is a columnist for The Seattle Times. Email: jtalton@seattletimes.com
