Gee, why would Amazon look to locate outside Seattle?

Sep 7, 2017

Today homegrown company and Seattle pride and joy, Amazon, announced it is planning on setting up a second headquarters in another state.  The company said a high priority for the new location will be a “stable and business-friendly environment and tax structure.”

While The Seattle Times story on the announcement says “it’s unclear” why the company is moving to split its headquarters between Seattle and another city, and Amazon executives are not giving specifics, one might speculate it could have to do with the city of Seattle’s increasingly aggressive and strident anti-business policies and attitude toward the city’s employers.

The Councilmember pushing those policies, Kshama Sawant, famously said Boeing workers “should take over the factories, and shut down Boeing’s profit-making machine.”  She went on to explain, “we can re-toll the machines to produce mass transit like buses, instead of destructive, you know, war machines.”

So Sawant’s response to Amazon’s announcement shouldn’t be surprising:

“We need to unionize, and to take these behemoths into democratic public ownership, so that they are run not for profit for a few, but in the interests of the majority of working people and of society.”

Sawant spices up her tirade with the usual rhetoric and references to “billionaire shareholders,” “systematic economic extortion,” and “monopoly power,” and accuses the company, which is the city’s largest employer with 40,000 workers (and the second largest employer in the U.S.), of “forcing a race to the bottom for the living standards of workers...”  She also says Amazon has used “its monopoly power to gobble up swathes of prime Seattle real estate, and extract plum deals from the city’s Democratic establishment…” 

What Sawant doesn’t mention is Amazon, “has fueled an economy that has driven up wages and lowered unemployment.”  The Seattle Times notes that, “while Seattle’s booming economy is often attributed to a wide variety of factors, increasingly, it’s all about one company.”

While Sawant seems to think Amazon’s evil pursuit of profit has contributed nothing good to the city, the director of the University of Washington Runstad Center for Real Estate Studies has a different perspective, crediting Amazon with a boom in local retail that has rippled throughout Seattle’s economy.  He says “the benefit to downtown is enormous.”   

A professor at the University of Washington’s Foster School of Business notes that Amazon’s success goes beyond creating new jobs and spurring retail growth.  It has also encouraged other big tech companies, such as Google, Facebook, Apple, Airbnb, Uber, and the makers of Snapchat, to set up shop in Seattle.  All of which has contributed to Seattle’s strong tech economy.  She warns:

“If Amazon were to leave, that would create a giant hole in their wake.”

Another dissenter to Councilmember Sawant’s declaration is Democrat lawmaker Guy Palumbo, who holds a state Senate seat representing parts of King and Snohomish Counties.  Senator Palumbo, who used to work for Amazon and whose wife still does, offered his own strongly worded statement in response to Sawant:

"Her statement shows that she just doesn't get it.  The Seattle City Council has its hands on the reins of the economic engine of our state and they are creating a hostile business climate."

Updated (9/8)

Senator Palumbo did a radio interview on this topic yesterday saying: 

“It’s well documented that when Jeff (Bezos) was driving across country and writing the Amazon business plan, he was looking at Texas, Washington, and I think there was one other state. And one of the major things he was looking at was no state income tax. Had we had an income tax back in 1995, we wouldn’t have Amazon.”

You can listen to the full radio interview here

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