Critics say Amazons so-called blackmail over tax is just the latest evidence that the company has taken from Seattle but given little back
owever they see Amazon, for good or ill, residents of the fastest-growing city in the US largely agree on the price H Seattle has paid to be the home of the megacorporation: surging rents, homelessness, traffic-clogged streets, overburdened public transport, an influx of young men in polo shirts and a creeping uniformity rubbing against the city’s counterculture.
But the issue of Jeff Bezos balls is far from settled. Have you seen the Bezos balls? asked Dave Christie, a jewellery maker at a waterfront market who makes no secret of his personal dislike for the man who founded and still runs
Amazon. No one wanted them. They’ve disfigured downtown. Giant balls say everything about the man. Bezos is holding Seattle hostage.
Its not strictly true to say everyone is against the three huge plant-forested glass spheres at what Amazon calls its campus in the heart of the city. The Bezos balls, as the conservatories are popularly known, are modelled on the greenhouses at Londons Kew Gardens, feature walkways above fig trees, ferns and rhododendrons, and provide hot-desking for Amazon workers looking for a break from the neighbouring office tower.
They are absolutely gorgeous. There was nothing in that area 10 years ago, said Jen Reed, selling jerky from another market stall. I don’t hate Amazon the way that a lot of people hate them. Seattle has changed a lot. My rents gone from $500 to $1,000, but outside of that Amazon have been beneficial. It’s a give and take, and anyway we invited them here.
Giant balls say everything about the man … Jeff Bezos is taken on a tour of the Bezos balls during their grand opening in January. Photograph: The Washington Post/Getty Images
But even those sympathetic to the biggest retailer in the US are questioning whether there has been more take than give. Amazon has long been accused of stretching the city’s transit and education systems, and its highly paid workers have driven up prices of goods and housing.
The resentful murmur recently became a roar after Amazon reacted to the city’s
latest tax proposal, which would have charged large businesses an annual $275 per employee, by resorting to what critics call blackmail. In mid-June, less than a month after unanimously passing the tax, Seattle’s council abandoned it in the face of threats from the corporation. The tension has sharpened the debate about whether the city can retain its identity as one of the most progressive in the country, or is destined to be just another tech hub.
Big tech, desperate cities
Ironically, given Amazon’s much-publicised
city sweepstakes, in which municipalities in North America are competing to land the companys second headquarters, Seattle did not reach a Faustian pact with Amazon to lure it in the first place. The city gave no tax breaks and passed no anti-union laws, although the fact that Washington state law bars income tax was certainly appealing. The council did encourage the firm’s massive growth, however, with accommodations on building regulations that helped drive $4bn in construction.
Amazon has remade Seattle in many ways beyond new buildings. The city’s population has surged by about 40% since the company was founded, and nearly 20,000 people a year are moving there, often drawn by the company and its orbit. The tech industry has brought higher-paying jobs, with its average salary about $100,000. But that is twice as much as half the workers in the city earn, and the latter’s spending power is dropping sharply, creating a clear economic divide between some of the city’s population and the new arrivals.
Pedestrians and cyclists gather near the Bezos balls in Seattle. The conservatories are modelled on the greenhouses at Londons Kew Gardens. Photograph: Ted S. Warren/AP
The better-paid have driven up house prices by 70% in five years, and rents with them, as they suck up the limited housing stock. The lower-paid are being forced out of the city, into smaller accommodation or on to the streets. The Seattle area now has the highest homeless population in the country after New York and Los Angeles, with more than 11,000 people without a permanent home, many living in tent camps under bridges, in parks and in cemeteries.
Its incredibly difficult to find housing in Seattle now, said Nicole Keenan-Lai, executive director of Puget Sound Sage, a Seattle thinktank focused on low-income and minority communities. Two years ago
a study came out that said 35% of Seattles homeless population has some college or a college degree.
John Burbank of the Economic Opportunity Institute said there is a a direct link between the surge in highly paid jobs and the numbers of people forced on to the street.
Theres an incredible correlation between the increase in homelessness and the increase in the number of people who have incomes in excess of $250,000, he said. That has grown by almost 50% between 2011 and 2017. The population of homeless kids in the Seattle public schools has grown from 1,300 kids to
Amazon has sought to improve its standing with financial support for organisations such as Mary’s Place to build a new shelter for 200 homeless women and families.
Protesters march with a sign depicting Jeff Bezos as a mechanical robot as they walk near Amazon’s annual meeting of shareholders in May. Photograph: Ted S. Warren/AP
It is a similar story as schools and public transportation grapple to keep up with the rapidly rising population and the demographic shift it is causing.
While use of public transport is falling in many major cities in the US, down more than 7% in Los Angeles in 2016 and 10% in Washington DC, it was up by 4% in Seattle. The city has redesigned bus routes and upgraded the South Lake Union Trolley, known locally by the unfortunate acronym of the Slut, to the Amazon campus in the area, but the system is struggling. The company has contributed towards some of the cost of the upgrades, including buying an additional streetcar and giving $700,000 toward running the bus service this year.
But still the flow of cars to the Amazon campus has led to long traffic jams to the interstate. The bus route to the same area, the No 8, is notorious as one of the most overcrowded and delayed in the city, prompting a derisory
Twitter account with the slogan You can’t say late without 8!.
Dave Chung, who says he has been homeless for five years, eats a meal before bedding down in a bus shelter. The Seattle area now has the third highest homeless population in the US. Photograph: Ted S. Warren/AP
In other cities, rising salaries would be a boon to public coffers, but Seattle is burdened with one of the most regressive tax systems in the country.
With no income tax, the financing of public works falls more heavily on the less well off through sales and property taxes. We have a tax system in which if you’re making less than $25,000, youre paying about 18% of your income in state and local taxes. If you’re above $250,000 youre paying about 4% of your income in state and local taxes, said Burbank.
As a result were leaving millions of dollars on the table that should be going into public investments in our state and in our city. Were increasing taxes on the people who can least afford to pay taxes and were letting the affluent off the hook.
This is not how large numbers of people in Seattle think things should work. They argue that Amazon should contribute to upgrading a transport system thats struggling under the influx it created, and improving schools that provide the educated workforce the company benefits from.
It is sort of a bipolar relationship because we do have a progressive city in some respects, we have a progressive city council in some respects, and then we have an environment that embraces individual wealth, said Burbank.
I think Amazon’s attitude has to do with the difference between social liberties and economic equality. Bezos was helpful in the campaign for same-sex marriage, but he also put $100,000 in opposition to the [initiative on introducing an] income tax
that we ran in our state in 2010.
So if it has to do with personal freedom, thats OK. But if it has to do with actually trying to create a shared quality of life which entails taxation of the affluent or higher taxation, thats not OK. And so this is a really good city for him because we have a lot of personal freedom and we have no taxation. Of course chickens are going to come home to roost at some point.
A man sleeps on the sidewalk as people behind line-up to buy lunch at a Dicks Drive-In restaurant in Seattle. Photograph: Elaine Thompson/AP
Bezos’ company has arguably done much to erode the liberal and progressive culture of the city that first attracted him. Unlike other locally based giant corporations such as Microsoft, Starbucks and Boeing, Amazon planted itself in the heart of the city, and the influx of well-paid tech workers has changed the feel of Seattle. Keenan-Lai sees it in the erosion of the identity of her old neighbourhood on the city’s Capitol Hill and the disappearance of older, quirky restaurants, driven out by newer, more polished places.
I can’t begrudge people moving to try to find opportunity, she said. But I do hear a lot of people say I don’t want those programmers coming to Seattle. It does create a lot of tension. Amazon represents both innovation and progress, and also dystopian fears for a lot of folks.
Reed, at the market stall, added: Its definitely weird when you go into a dive bar that used to have bike gangs and now everyones in a polo shirt.
The city council has struggled to find a path that remains true to Seattles progressive values while keeping the source of much of its recent prosperity happy. In 2015 it became the
first major US city to increase its minimum wage to $15 an hour. Keenan-Lai said 100,000 people then quarter of the working population of the city benefited from the measure, but that it’s impact was swiftly eroded.
The increase in the cost of housing has exceeded the increase in wages, she said. When we were advocating for $15 an hour the idea was that everyone who lived in Seattle could afford to live here. Our housing market just skyrocketed.
Seattle, forced by the lack of an income tax to hunt for innovative means of raising revenue, has run into resistance from Amazon at every turn.
The friction peaked over the recent worker tax, which was expected to raise around $50m a year to help pay for affordable housing and services for people made homeless by escalating rents and property prices.
Amazon, however, in actions critics called blackmail, characterised it as a jobs tax, threatened to freeze construction in the city and backed a petition drive to put the issue to a popular vote in November.
People in favour of and against the worker tax hold signs as they wait for the start of a Seattle city council meeting in June. Only two council members voted to keep the tax. Photograph: Ted S. Warren/AP
The city’s chamber of commerce and other businesses threw their weight behind the ballot initiative. Popular support for the measure collapsed amid accusations that it would cost jobs and that the money would not be put to good use because the council lacks a coherent strategy to cope with the homeless crisis.
Under pressure from Amazon, the council broke, and only two of the citys nine councillors voted to keep the tax. One of them, Kshama Sawant, a member of Socialist Alternative, accused the council of a cowardly betrayal and called Bezos our enemy.
Sawant, a driving force behind the $15 minimum wage, said it would be a mistake to expect Amazon to behave any differently. The company, she said, could easily afford the tax but opposed it for ideological reasons.
Its not a tax on jobs, she said. It is not a tax on employees. Its a tax on big business. For the people who would actually be paying this, it is pocket change, and yet they are fighting fiercely against it. Good corporate citizen is an oxymoron, because Jeff Bezos and the billionaire class have no incentive to do the right thing.
Amazon has said that while it opposed the worker tax, it is deeply committed to being part of the solution, and points to its support of nonprofits in the city. The company declined to comment for this article.
Critics are not persuaded. Some see the company as attempting to shape a future in which Seattles residents are dependent on Amazon’s largesse through the funding of NGOs to deal with social issues, giving the company undue power at the expense of democratic institutions.
Amazon is very much, We want to save the world too, lets do it together. And then as you get into the details, not so much, said Keenan-Lai. There is a lot of benefit we provide to Amazon but the city has had a really hard time extracting benefit from the company in return.
Still, Keenan-Lai said the citys history of progressive struggle is deep-rooted. Theres been a long understanding that corporations cant continue doing what theyre doing, she said. In Seattle, weve been fighting back for a long time.
This week Guardian Cities takes a deeper look at the relationship between tech and US cities, asking whether tax giveaways are worth the cost. Join the discussion on Twitter, Facebook and Instagram and explore the series here