Dunagin: A tale of two Amazon venturesBy CHARLES DUNAGIN GUEST COLUMNIST,
Mississippi and New York City don’t have much in common, although there are enough Mississippi natives in the Big Apple to hold their own picnic in Central Park once a year.
Recent events with the online shopping giant Amazon illustrate just one of the differences in public attitudes in the two localities.
Amazon has canceled plans to build an expansive corporate campus in Queens after facing a backlash from lawmakers, progressive activists and union leaders, who contended that the giant business did not deserve nearly $3 billion in government incentives.
This was a huge deal — 25,000 highly paid jobs. It had the support of Gov. Andrew M. Cuomo and Mayor Bill deBlasio, both Democrats.
But it was opposed by a number of new leftists Democrats, including Rep. Alexandria Ocasio-Cortez, whose upset victory last year occurred in the part of the city where Amazon had planned its site.
“A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward,” Amazon said in a statement.
Imagine a Mississippi elected politician of any stripe opposing a deal like that. In fact Mississippi has its own deal with Amazon, albeit one of less magnitude and lower paying jobs as well as far less in financial incentives.
Amazon announced in December it will open a fulfillment center in Marshall County, just south of Memphis, that will create 850 jobs over a three-year period, paying at least $15 an hour.
That’s not much compared to New York salaries, but it will attract workers in Mississippi who will welcome a paycheck to pack and ship items for Amazon.
Incentives to locate the facility in North Mississippi total about $12.3 million, including grants for road improvements and construction from the Mississippi Development Authority, property tax breaks and road improvements assistance from Marshall County and some project assistance from the Tennessee Valley Authority.
There are no socialistic-leaning leftists politicians like Ocasio-Cortez in this state with the power to stop the Mississippi deal which, judged in comparison with some other economic development handouts in the past, isn’t unreasonable — unless you consider all the ramifications of the government picking winners and losers in business.
Noah Barbieri, a 2018 Rhodes Scholar from Belden who is currently pursuing a Masters in Development Economics from the University of Oxford, recently wrote a column on the issue that was published in the Daily Journal of Tupelo.
Here’s an excerpt:
“I grew up working in my family’s two local retail stores that have been in my family for over 25 years. I have seen first hand how difficult it is for my family’s small business to compete with a company like Amazon that has artificially low prices. We have had countless dinner table conversations about how we can continue to serve our community and how it seems like there is so little support for the little guy.
“No community or state development officer has ever approached my family with incentives to expand our business, and I am certain that nearly all small family-run businesses that are the bedrock of our state have not either.
“We should not be giving corporate welfare to billion-dollar retail companies, but instead be using those funds to catalyze bottom-up growth. We need to train workers, strive to foster an equitable environment, work on developing our small businesses, and build better infrastructure so that the Amazons of the world will come to Mississippi on their own dime.
“Amazon has immense bargaining power and would likely have chosen Tennessee or Alabama if either state made a better offer. Maybe it was worth it for Mississippi to make a deal with the company so that we receive some benefits. I hope we move toward a time where states form regional pacts that prevent each other from outbidding other states for private companies.
“Mississippi has a bright future, but subverting competition, especially in the retail space, will not help us reach our full potential.”
Barbieri makes a point. It’s hard for local businesses to compete with Amazon on price and convenience. When the government subsidizes the big guys, it’s even harder.