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I’ve never been a big numbers guy. If someone told me how much money I spent on groceries for the past five or 10 years, I would probably ask, “How much is that per week?” In other words, put it in terms I can relate to.

So I have a hard time getting my arms around the multi-billion dollar deal in which Amazon is going to build two second headquarters outlets, one in New York and the other in Alexandria, Virginia.

Considering Amazon is one of the richest companies in the world, some people consider what New York is giving Amazon as “corporate welfare.”

The state of New York will shell out $1.5 billion in taxpayer-funded incentives. New York City’s contribution will bring the overall total of just under $2 billion, according to figures published in the New York Times. Amazon pledges to create 25,000 new jobs at a cost per-job to New York taxpayers of $48,000.

What does New York receive in return for it generosity? Amazon promises the 25,000 full-time jobs at an average wage of $150,000 a year. It is investing $2.5 billion and will pay up to $325 million over the next 10 or more years, based on the square footage of the buildings. The projected incremental tax revenue is $10 billion over the next 20 years.

Corporate welfare – or a deal too good to pass up?

My small brain still struggles with how many groceries would that buy every week.

One way of putting it in perspective is to take a look at one of North Iowa’s most successful economic development projects in recent years – the location of the McKesson storage and distribution center in Clear Lake.

McKesson, one of the largest pharmaceutical companies in the world, is like Amazon in that it has plenty of cash on hand. But also like Amazon, it looks for the best deal – the biggest bang for its buck – when it wants to expand.

And there are striking similarities in the deals.

“Clear Lake wasn’t terribly far behind (Amazon) with McKesson on a per-job ratio,” says City Administrator Scott Flory. He said $7.3 million of the city’s inventive to McKesson is in the form of property taxes -- 90 percent of the company’s own money returned to them for a period not to exceed 15 years. The city keeps the other 10 percent – and keeps 100 percent, of course, after 15 years. The city also provided a forgivable loan of $1.7 million.

In return, the city has received a multi-million investment from the company and, since it opened in May of 2016, has provided more than 200 jobs at an average wage of $15 to $16 an hour.

It has also contributed to the overall North Iowa economy by people buying and renting homes, purchasing vehicles, groceries and gasoline, just to name a few items, and contributing to the vitality of the region.

That’s why companies and cities engage in so-called “corporate welfare.”

One big difference between Clear Lake and New York City. Clear Lake doesn’t have to worry about 25,000 workers and families all hitting rush-hour traffic or flooding the subway system at the same time.

Come to think of it, that’s just another advantage of living in North Iowa.

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John Skipper retired from the Globe Gazette in February 2018 after 52 years in newspapers, most of that in Mason City covering North Iowa government and politics.


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