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Opinion

Amazon Was Never Going to Create 25,000 Jobs in Queens


gov mayor lic

(photo: Kevin P. Coughlin/Office of Governor Andrew M. Cuomo)


Now that Governor Amazon Cuomo is grovelling for Amazon to come back to New York, it’s important to remember that the original sin of the “HQ2” deal is still true: Amazon was never going to bring 25,000 jobs to Long Island City.

That might surprise people, particularly since that number and its related economic activity have been the central arguments used to defend the deal. But to be clear, Amazon never actually promised to bring 25,000 jobs. Period. Go look for it.

Supporters point out that Amazon would get the full package of tax incentives, which are available to any company, only if it created the 25,000 jobs. That's absolutely true, but it proves the point. It shows that Amazon didn't need or really want the job incentives. Instead, it played off our failed economic development policies to get what it actually wanted.

What Amazon did care about, what it wanted more than anything, and what it would have gotten in the deal was a shiny new East River campus quickly, quietly, and cheaply.

First, Amazon didn't want to engage with the community or be a good neighbor. All of this would have taken a lot of time, but the real issue was that it would have involved making promises to the community that Amazon had no intention of ever making. The minimal promises it did make were entirely on its terms (and changed only slightly after pushback before Amazon finally walked).

Second, Amazon didn't want to pay the full cost of acquiring the choice land that it wanted to build its campus or go through the city’s land use review process (ULURP). That would have involved stringing together multiple lots at fair market value and convincing the city to sell public land. That would have meant more engagement with the public (and the City Council) and more commitments.

Third, Amazon knew it had to hire union labor for constructing and servicing the campus, but didn’t want to pay for it. More importantly, it didn’t want that to be a backdoor to unionizing its own larger workforce, especially in distribution centers. As much as some supporters have pointed to the construction and building-service jobs as evidence that Amazon was willing to work with unions, it was a political necessity to do so and had the added bonus of splitting the labor movement in New York. Amazon was never going to allow unionization in its Staten Island or other distribution centers as part of the deal.

By “promising” 25,000 jobs, Amazon got everything it wanted in the Memorandum of Understanding with the city and the state. It bypassed the City Council and real public review when the governor deemed “HQ2” a General Project Plan. It got its riverside campus when the mayor effectively turned over public land on a sweetheart lease (unquestionably saving Amazon hundreds of millions of dollars that weren’t and haven’t been included in the cost of incentives) while also killing a private development that included affordable housing and was going through the proper land-use channels. And Amazon got a flat out cash transfer of $325 million (with a possibility of up to $500 million) to cover costs of using union labor on construction.

Still, Amazon never had to deliver the jobs. To be sure, it was going to have a large workforce in Long Island City by consolidating several thousand employees already in New York and transferring more from Seattle. There is also no doubt that it would have hired some new employees locally. But there were no real promises of how many, at what salary, or from what communities. That just means we were going to give a competitive edge to Amazon by subsidizing an abstract total of jobs at a time when job growth is fine in the city.

As we've seen with Foxconn in Wisconsin, General Electric in Massachusetts, and just about every development project Governor Cuomo has produced (and his Economic Development Corporation has justified), the promised jobs and economic activity from these incentives rarely materialize, whether the companies get all of them or not. However, the public is always on the hook and companies almost never are.

Amazon exploits these policies all the time with its distribution centers (see Florida, Texas, California). They promise direct and indirect job creation that never happens. Amazon knew it wasn’t going to deliver 25,000 jobs and would never be held accountable for failing to. Amazon wanted its New York campus and simply took the flawed logic of our economic development policies to their extreme to get it.

Let’s not forget the bad faith Amazon showed when it originally announced the "contest" in September 2017. Remember, back then it wasn’t for 25,000 jobs -- it was for 50,000 jobs. Amazon and the media moved on quickly from that bait and switch, but we shouldn’t.

Amazon prides itself on being data-driven and strategic (yet: counterpoint), which means it’s safe to assume that the D.C. area and New York City had already been selected - making the whole idea of a “second headquarters” bogus from the beginning.

But why not announce a “contest” saying you’re going to create 50,000 jobs and have every city and state fall over themselves to compete for it? Amazon got a year’s worth of free advertising. It got reams of data from cities for future expansion and whatever else it may attempt. It forced New York and Virginia to offer billions for something it was already going to do and could easily afford.

Most importantly, Amazon got New York and Virgina to turn over land for campuses quickly and with no public review.

Back in December, I wrote about how I thought the Amazon deal was in trouble. Then, as now, it was clear that the deal was negotiated in bad faith from the beginning, that it would not actually do what the mayor, the governor, and Amazon said it would do, and it would not hold Amazon accountable for when it inevitably failed to live up to its vague end of the bargain. That is all still true.

Amazon is incapable of being a good partner. Everybody knows that now. Everybody knows how it treats its workers, its home city, and who it does business for. If it really needed a home for 25,000 jobs in New York City, it would have negotiated in good faith and worked through the concerns of the community it was moving into.

Instead, it wanted an insulated campus apart from the community paid for by the community, and bailed when it wasn’t served on a platter. Activists and a few steadfast local politicians accomplished a great public service by showing the real face of Amazon.  

More importantly, the “HQ2” ordeal shows the fatal flaws in our economic development policies that Amazon so cleverly exploited. Taxpayers spend $90 billion a year pitting cities against each other for unsubstantiated job numbers, which only works out for corporations and their shareholders.

This is done instead of solving the cities’ actual problems like the lack of affordable housing, overcrowded schools, a crumbling transportation system, and skyrocketing child- and health-care costs. It goes without saying that investing in this public infrastructure would also lead to new, bottom-up job creation -- many more than 25,000 -- for all kinds of New Yorkers, new residents, and new businesses.

As his recent grovelling has proven, Governor Amazon Cuomo has been guilty of this more than anyone. He values the optics of a ribbon-cutting ceremony on the East River with Jeff Bezos over the hard work that it takes to create actual jobs. Let’s hope Amazon’s bad faith trumps the governor’s and they stay gone.

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Peter Harrison is a member of NYC-DSA and CEO/Co-founder of homeBody, a public benefit startup. On Twitter @PeteHarrisonNYC.

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Big Upsides to Downstate Gaming: Union Jobs and Transit Revenue


new york casino

(photo: Governor's Office)


New York has a proud history of thinking big and building bold. As New York searches for routes to generate new revenue to fund critical priorities, and drive job growth through significant private investment projects, we have an unparalleled opportunity right in front of us.

Albany leaders should lift the moratorium on the expansion of casino development downstate and begin an open competition for the remaining three gaming licenses as approved by New York voters in 2013. No other opportunity is currently on the horizon to provide the infusion of jobs or revenue New York would experience with a robust, competitive, and transparent process to expand gaming downstate.

Surrounding states have taken advantage of New York’s moratorium on downstate gaming by moving quickly to expand gaming and produce new jobs and revenue for themselves.

Boston is putting the finishing touches on a $2 billion resort and gaming complex, with 4,000 permanent jobs and 5,700 construction jobs – good union jobs. Pennsylvania has seen $400 million in new revenue over the past year after enacting a broad gaming expansion. New Jersey is seeing $20 million a month in new revenue from sports betting alone, and Connecticut is considering gaming expansion in Bridgeport and on the New York border. And, ironically, New Yorkers who have limited gaming opportunities in their own state are often the ones funding tax revenues and job growth in neighboring states.

With due respect for our neighbors from Boston to Bridgeport, New York, with 60 million tourists a year to the City, is the single most attractive new market for gaming in the United States. Let’s show we can do it big and do it right: instead of a private company pitting cities against each other in a bidding war, let’s have private casino companies compete with each other for the right to valuable resort gaming franchises in New York.

A New York gaming development license is an extraordinarily valuable asset if structured correctly with a competitive process for three licenses that:

-Establishes a minimum license fee of $500 million per license -- totaling $1.5 billion in upfront revenue;

-Sets a minimum private investment of $2 billion per license -- bringing in $6 billion in private investment;

-Requires union labor on construction jobs and the right for unions to organize permanent operations jobs; and

-Dedicates new revenue to improve public transit service, fund public education, and other New York priorities.

If done right, releasing the remaining three licenses in a competitive bid process will generate tens of thousands of good union jobs and billions in revenue for the City and the State without any federal, state or local subsidies. And it would provide local and accessible economic opportunities for communities that are too often shut out.

The estimated $1.5 billion in up-front license fees from casinos could be dedicated immediately to fund public education or to help close the revenue gap needed for the MTA. If the State moves quickly, this revenue could be available in the next fiscal year. Additional, ongoing revenue from gaming and real estate taxes could be dedicated to fund crucial programmatic priorities – without any subsidies, and no additional taxes or fees on New Yorkers.

A significant private investment requirement of $2 billion for each gaming resort development (on top of license fees) would create a projected 16,800 permanent career union jobs, and an additional 15,000 union construction jobs. These are good jobs, benefiting a diverse union workforce with quality benefits including healthcare, training, and secure career opportunities.

Think about it: $6 billion in private development to fund critical needs. Built and operated by local union labor. No subsidies. Keeping New York dollars in New York. If you created the wishlist for future development in New York, you couldn’t do better. New York has the winning hand when it comes to making the most of the gaming licenses already approved by New York voters: Let’s play it.

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Gary LaBarbera is President of the Building and Construction Trades Council of Greater New York. John Samuelson is International President of the Transport Workers Union (TWU).

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New York Construction Workers Remain at Risk Without Legislative Action


gov cuomo first phase rev

(photo: Kevin P. Coughlin/Governor's Office)


With this year’s legislative session in full-swing in Albany, special interest groups have resumed their attacks on laws designed to keep workers safe on construction sites. Construction and insurance trade groups, seeking to shed accountability and pad their pockets, have argued that labor protections like the Scaffold Safety Law are somehow undermining worker safety. However, a recent data analysis by the New York Committee for Occupational Safety & Health (NYCOSH) confirms that stronger safety requirements in New York City are helping to reduce on-the-job fatalities while worker deaths continue to rise in other, less-regulated parts of the state.

In 2017, the most recent data year available, the construction fatality rate across New York State was 52% higher than in New York City, according to our analysis of federal and city data. This significant difference in fatalities is not an outlier, but rather the continuation of an ongoing trend. Over the past five years, New York State’s construction workers have experienced a 39% increase in fatal injury rates compared to a 23% decrease in New York City. The stark gap in safety outcomes can be explained by the city’s more pronounced enforcement of safety regulations, which has helped to deter contractors from cutting corners and putting workers’ lives at risk.

Underfunding has constrained the federal Occupational Safety & Health Administration’s ability to conduct worksite inspections and enforce penalties for safety violations. In response, New York City officials have allocated more funding to the city’s Department of Buildings, boosting the agency’s budget from $107 million in 2015 to $183 million in 2019 and increasing its personnel from 1,156 employees in 2015 to 1,880 this year. Armed with larger staff and additional resources, the agency has expanded its ability to identify construction safety hazards and hold negligent contractors accountable.

The Manhattan District Attorney’s office has stepped up as well, prosecuting severe offenders through the Construction Fraud Task Force. By prosecuting bad actors for wage theft and dangerous labor violations, the DA’s office indicated that contractors are not above the law, especially when they are putting lives at risk. Beyond a more proactive approach to enforcement, the city has also encouraged employers to prioritize proper safety education by mandating that workers complete specific training and certification requirements.

At the state level, officials must uphold existing safety provisions and enact additional protections in order to reduce fatalities outside of New York City.

It’s imperative that lawmakers preserve the Scaffold Safety Law, which allows construction workers to hold negligent contractors responsible when serious injuries or fatalities do occur. The law simply calls for contractors to ensure that workers have access to proper safety equipment. If a failure to provide safety equipment leads to injury, workers are able to then hold the contractor responsible for the lost wages and medical bills that result. The Scaffold Safety Law is a crucial mechanism that deters contractors from cutting corners on safety equipment and promotes accountability.

In addition to maintaining the Scaffold Safety Law, policymakers should create a statewide vehicle to enforce labor protections and overcome the limitations of federal regulators. To that same end, the state Department of Labor should implement a registry of workplace fatalities to foster public transparency, as well as implement Carlos’ Law to increase the maximum fines that can be levied against negligent contractors.

The state would be wise to borrow a few lessons from New York City, by expanding the number of prosecutions for cases of severe employer misconduct and requiring construction workers to undergo training and certification.

The latest data offers a glaring reminder that construction remains a dangerous profession, particularly in the absence of meaningful regulations. At the same time, the decrease of fatality rates even when coupled with an ongoing construction boom in New York City indicates that stronger safety protections can save lives without stunting the industry’s growth.

For those who are committed to protecting the lives of New York’s working families, there is a clear path forward to improving construction safety centered on increasing worksite inspections, enforcing stronger penalties, and expanding workers’ access to safety equipment and resources.

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Charlene Obernauer is the Executive Director of the New York Committee for Occupational Safety & Health.

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