Narrowed down from a list of about 20 supplicant cities, the reality of Amazon’s second headquarters in North America, dubbed “HQ2,” boils down to two front runners — Montgomery County, Maryland, a suburb of Washington, D.C., and Newark, New Jersey, on the edge of New York City. Now what does that mean?
By now, everyone not living under a rock knows that Amazon will build a second headquarters in North America, dubbed “HQ2”. The search was announced in ceremonious Hunger Games fashion by Amazon CEO Jeff Bezos. Who just recently assumed the status of the world’s richest man through owning the world’s second largest retail company. He achieved that valuation through a ferocious competitive advantage built on two factors: logistical speed and tax evasion on a massive scale. Both of these will have life changing consequences for the city chosen as HQ2.
Amazon’s Next Colony
Not everyone knows, however, which city will be granted the dubious prize of becoming Amazon’s new colony. The list of supplicants has been narrowed down to 20 cities, but in reality there are currently only two front runners — Montgomery County, Maryland, a suburb of Washington, D.C., and Newark, New Jersey, on the edge of New York City.
Although largely ignored by the corporate media, these two cities are clearly in the lead because they offer the one fix that Amazon craves most — tax breaks in the billions.
Montgomery County is offering $6.5 billion in tax breaks (including abatements and grants) which also includes $2 billion in infrastructure improvements (roads, public transportation, etc.). Newark is offering a proposal of $7 billion in tax breaks, abatements, grants, etc. The nearest competitor is Columbus, Ohio with a $2.3 billion package and Philadelphia with $2-3 billion.
Either Montgomery County or Newark. Both meet the criteria Amazon publicly promoted: access to major transportation hubs like airports (both have 3 major airports in the region), universities and colleges with fresh crops of talented tech grads, public transportation, as well as, the two elements that Amazon’s competitive advantage is based on — massive tax breaks and ports, the linchpin to logistical speed.
Amazon also wants a “stable business environment,” meaning there will be no push back to the massive tax breaks they are demanding. Seattle recently felt Amazon’s wrath when its City Council passed a measly $25 million tax to fund construction of affordable housing and deal with its burgeoning homeless population — the fastest growing displaced demographic in the country. Bezos pouted that Amazon questioned staying in Seattle, then threatened to postpone a major development project in the city’s downtown area. Voila! The city council repealed the tax with Prime speed.
Both regions have two major assets owned by either Bezos or Amazon — The Washington Post in the District of Columbia and Audible in Newark. Given Amazon’s growing focus on media and music, Newark’s proximity to global media hub, New York City, makes sense. However, Bezos may also have the political itch like his tech mogul counterpart, Mark Zuckerberg. Thus, being close to Washington D.C. would have its advantages.
Both regions are home to major data centers important in the cloud or Big Data industry. Perhaps the fastest growing and most lucrative, albeit less visible area of Amazon’s business. Amazon Web Services (AWS) offers Big Data storage and services spanning the world.
However, Northern Virginia is home to six AWS zones, more than any other region. Another AWS GovCloud is planned for the Northeast US. AWS provides Big Data storage, analytics, surveillance services and products to U.S. law enforcement and federal agencies like the CIA. In 2013, the CIA awarded AWS a $600 million contract to build a cloud infrastructure for 17 federal intelligence agencies. CIA Chief Information Security Officer Sherrill Nicely called Amazon Cloud “a godsend.”
According to The Intercept, Amazon will be bidding on a $10 billion contract to build a similar system for the Department of Defense. Likewise, local police departments are increasingly turning to AWS because “criminals can’t hide from the data.”
Civil rights organizations like the ACLU have called for Amazon to get out of the surveillance business and stop selling its facial recognition software, Rekognition, to intelligence agencies and police departments. It further criminalizes people of color by inaccurately recognizing their faces and matching them with mugshots — even U.S. Congressional members.
So how will Amazon’s cozy relationship with the CIA and cops go down with local residents in either DC-Maryland-Virginia (DMV) area or New Jersey?
I live in Newark and am seeing the cutesy, yet sinister wry smile logo cropping up more and more places everyday — on bus stops, bags, and buildings formerly owned by Black organizations like the Women in Support of the Million Man March (is it just me or can you too see the nefarious irony in a company built on tax evasion scooping up a Black owned building enterprise because its leadership was conveniently charged, in part, with tax evasion?). And of course, in the newly installed Whole Foods in downtown Newark.
By the way, after Amazon bought Whole Foods, management in Newark and New York City laid off several staff members, including local marketing workers — not before they completed the dirty work of priming the city for gentrification using small grants and other incentives, according to two unnamed sources.
So, I’m ultimately calling it for Newark. Here’s why. While both meet these criteria, Newark is home to the Port Authority of New York and New Jersey, the largest port system on the East Coast; second largest in the US, behind the Los Angeles/Long Beach system. NYC/NJ, LA/Long Beach and Seattle are the largest ports in the US as well as some of the largest in the world. According to a list compiled by the World Shipping Council, Long Beach and NYC/NJ rank as numbers 22 and 23, respectively.
The northern New Jersey/New York City region is home to dozens of data centers, including AT&T’s infamous centers used by the National Security Agency (NSA) to conduct surveillance, according to the NY Post. So, the infrastructure is here to support additional data center building and expansion.
Get ready for Prime Gentrification
Just like Amazon’s 2-day shipping, this level of gentrification will unfold even faster than previous iterations, often spanning decades.
Seattle’s housing prices have skyrocketed in the last five years — rent for a two bedroom apartment has doubled to an average $2830, according to statistics by Rent Jungle. The northwest city has the fastest growing real estate market up by 13% and, now, may be headed for a crash. Seattle also has one of the largest homeless population in the country as stated in a 2017 assessment report by the U.S. Department of Housing and Urban development (HUD). And yes, there’s an app for reporting homeless people for eviction. it is promoted on the city’s official website.
As previously noted, when the Seattle City Council passed a $250/per worker tax on large businesses to fund affordable housing, Amazon pressured them to repeal it in a matter of weeks. This tax would have amounted to roughly $25 million for Amazon.That is a drop in the bucket for the company valued at nearly $1 trillion dollars, which paid no US federal taxes in 2017. And will likely continue to get off tax free thanks to Trump’s corporate welfare tax “reform.”
Real estate investors have already started circling like vultures. The startup CityBldr is set to begin research on real estate in the winning HQ2 city. As they attract investors to help them scoop up properties for flipping, a real estate speculation boom will commence.
For people who think the Amazon addition to Newark is comparable to the incorporation of Prudential, you all are in for a rude awakening. This wave of uber-gentrification will unleash in Prime time — 2 to 5 years, not decades.
Besides massive tax evasion, Amazon’s other competitive advantage is logistics. The corporation has created a superhuman logistical chain to get products manufactured across the globe with “just in time” speed to the consumer. This chain is built on the gross exploitation of workers and automation, from robots, to artificial intelligence, Big Data, etc.
Prime gentrification operates at prime speed because its logistical structure has already been perfected. This is by 30-plus years of global capital recolonizing urban areas as part of an imperialist strategy, creating its own supply chain for gentrification. Financing products, construction, marketing, retail — an operational conveyor belt of banks and firms that span the world. For instance, Cushman & Wakefield and CBRE Group is the largest real estate company in the world with $14 billion in revenue and 80,000 workers in 100 countries.
Over the last few decades, big corporations have flooded urban areas around the globe with capital. The strategy resembles how imperialism pushed stock exchanges to incorporate colonial markets into global industrial capitalism. Along the way comes displacement, austerity and what’s often called neoliberalism.
As capital privatizes, it cannibalizes previously public markets and spaces. In short, gentrification feels like colonization because the same capital flows and methodologies create it. And the color of that capital is the same — white.
So why would a city risk the grim reaper of gentrification given what we know from more than 30 years of carnage.
Amazon promises to bestow “up to 50,000 high paying jobs” to the HQ2 city. Mirroring American society, Amazon offers basically two types of jobs: 1. high tech, high wage work and 2. low wage work where laborers compete with advanced automation along the global supply-chain highway.
Both are exploitative. But while the high tech jobs promise $100,000 plus salaries, the warehouse jobs pay wages that workers struggle to get by on. In fact, Amazon workers in Ohio topped the list of the most workers forced to rely on food stamps, according to a press release by Policy Matters Ohio.
So what kind of jobs — and what kind of people — will Amazon bring to Newark? There will, of course, be some kind of hire-local initiative, but we see how that worked with the management layoffs of its Whole Foods community outreach staff.
Any high tech, high wage job will require at minimum a Bachelors if not a Masters degree, and several years experience. Take Software Engineering — Amazon has nearly 10,000 software development engineer job listings worldwide. The “preferred” qualifications are an M.S. in Computer Science and 5+ years experience. That’s 6 years of education and 5+ years of experience necessary for that high wage job.
Newark has a 12.7% college graduation rate, with 3.7% of the population holding a graduate or professional degree, according to Open Data. That means those high wage jobs are out of reach for many current Newarkers. At the same time, the city of Newark does have a higher education initiative to make a college education more feasible for its residents. As a community college professor here, I can attest to the fact that we have the smartest, hardest working students in the country.
Are you asking yourself the same question?
But I can’t help thinking, is that enough? How many lifelong residents will be let into this high tech, high wage world? How many will be left out? Many, predominantly, people of color cities are still struggling to recover from rapid fire deindustrialization.
Mass unemployment still haunts the streets, so this kind of surge in job influx has its appeal. It’s not a question of Newark residents being capable. It’s a question of do we trust Amazon and Bezos to make sure this world is accessible to Newarkers — the vast majority of which currently are the Black and Latinx working-class.
But there are other questions too — are we okay with some people getting high wage jobs and not others? Are we okay with this Hunger Games world, where a select few gain access to the gleaming Amazon biosphere while the rest toil in the warehouses getting injured by competing with robots who will ultimately replace them?
In 2017 alone, an analysis found that Amazon’s overall human workforce declined by 24,000 while its robot workforce increased by 75,000. Then in 2018, the National Council for Occupational Safety and Health listed Amazon warehouses as one of the most dangerous places to work in the U.S.
Plainly put, will high income whites get the good jobs and low income people of color get the shit jobs? Will historical trends of racial and gender discrimination continue? Of course, it’s how capitalism divides workers to control us.
What kind of public services can working class people count on in a city and state that has given away $7 billion in tax revenues? How will we fund schools, affordable housing, hospitals, pensions, etc.? On the kindness of corporations? University Hospital, the only public hospital left in the city, just narrowly avoided having its pediatric unit closed. Even while CityMD, the slick private medical clinic chain (“Sorry we don’t take Medicaid”) marketed to higher income urban workers, opened up next door to the Whole Foods downtown.
What happens if you gentrify a city of 300,000 mostly working class people of color with 50,000 bourgeois whites? What happens if it’s 25,000 whites? 15,000? What if that happens in 2-5 years versus 20-50?
By 2011, Washington D.C. lost its Black majority for the first time in 50 years. Its 2017 population is 49% Black (from a high of 77% in 1970), 43.6% White, 8.3% Hispanic of any race (interesting timing in expanding White privilege as the overall white population percentage declines) and 3.1% Asian, with whites and Asians accounting for the largest portion of new residents.
Montgomery County has already largely been gentrified for years. Many Black people who were pushed out of the district ended up in Prince George’s County, Maryland, now the home to some of the richest African American communities in the country, according to WAMU.
Moreover, the flow of capital to Newark arrived later and weaker, so gentrification has moved slower compared with other cities. The pace picked up in the last ten years under Cory Booker and now Ras Baraka.
The problem is that once the capital spigots are opened, they are difficult to manage by local or state politicians — even if they want to. Inviting Amazon into your city is not the same as inviting Prudential. You’re taking on a level of capital influx that will be extremely difficult to control. For a crude metaphor, we may have just given the British Empire the keys to the city.
This is not just an academic Socratic exercise, it’s personal. Who of the people I love will be able to afford to stay in the New NewArk? Will I? Are you asking yourself the same question?
Rebellion in the Global Supply Chain-Gang
The Politicians argue that they will hold Amazon accountable to their residents’ interests, but they have proven unable to do so — as the Seattle City Council’s reversal on the homeless tax clearly demonstrates.
You might think taking on one of the largest companies in the world is impossible, but it turns out that global corporations have a weakness — their reliance on workers on the global supply chain.
Companies like Walmart, Amazon, Apple, Alibaba and others profit off the sweat and toil of millions of workers in this chain. These workers create more than 80% of world trade and 60% of global production. Of course the global supply chain is nothing new. Compare this video of the global supply chain shipping patterns as seen from space to this visualization of the Transatlantic Slave Trade.
Think of an iPhone. Its manufacture and sale requires the following workers (including child workers):
- Lithium miners in Bolivia and other South American nations for the batteries
- Cobalt miners in South Africa for the batteries
- Manufacturing workers in China to assemble the iPhones
- Dock workers in China to load the iPhones into containers
- Seafaring workers who navigate the container ships to global ports of call
- Port workers to offload the containers
- Truck drivers to drive the iPhones to Amazon warehouses
- Warehouse workers to prepare the order for shipment
- Retail workers to sell the product
- Maintenance and facility workers to maintain, repair and clean Amazon facilities, including 8.1 million square feet of office space in Seattle alone.
- Engineers, software developers and other IT to design the product and apps for it
- Marketing workers to market the product
Ultimately, it will be workers who hold Amazon accountable or not.
Whether you call them the ruling class or the Fortune 2000, they run shit — through a web of networking events like the World Economic Forum, trade associations, international trade agreements and institutions such as the World Trade Organization (WTO), the G7, BRICS, Shanghai Cooperation Organisation, etc.
The Working Class
While the ruling class is much more united than the working class, they do have their internal fights (which of course lead to wars that we fight for them). The working class is not as organized. There is no global network or series of associations for workers to assemble and better their conditions. The last organization that tried successfully was the Third International and that had died out by WWII with devastating consequences, according to historian Dr. Margaret Stevens.
But workers on the global supply chain are beginning to talk to each other and realize they have power in organizing together through coordinated direct action, such as strikes, etc. For instance, Amazon warehouse workers in Spain, Germany and Poland held a strike during Amazon’s Prime Days in July. And of course unions are involved, but traditional unions with their national boundaries and corporate structures often fail to meet the needs of workers in the global supply chain gang.
Organizations like Warehouse Workers for Justice (WW4J) have begun to make connections among warehouse workers, global issues and their communities. In fact, WW4J demanded that Chicago’s offer to Amazon not include the massive tax breaks offered by other cities and that instead Amazon should fund schools and pay a $15 an hour wage.
By coordinating action, workers are finding new terrain to create choke points in the global supply chain, according to Professor of Sociology at California State University, Jake Alimahomed-Wilson. What would happen, for example, if workers across national, industry and ethnic boundaries realized they are part of an international working class and organized strikes along the chain?
If South African miners, Chinese Foxconn factory workers, port workers in Newark, Midwest truckers, Chicago warehouse workers and Seattle Amazon retail workers all, or even, some went on strike? Will white American warehouse workers join the Algerian warehouse workers in Spain or Black South Africans or Chinese factory workers or Latinx retail workers in Colombia or vice versa? How will they communicate, meet and strategize? How will they deal with repression from the nation state in which they live? How will they protect each other? Will they?
Unfortunately, if workers go on strike on a national or even regional level, it’s easy for the state to attack them. Just like the police attacked striking Amazon warehouse workers in Spain or even kill them, as is done in Colombia, which has the highest murder rate of union organizers in the world. But if workers along the global supply chain coordinate strikes, they might be able to shut down the company’s profits. At least enough to gain a bargaining advantage. If they realized their power and coordinated an attack on the global supply chain, i.e. and capitalism to bring it down, well then . . .
So here’s the paragraph that most editors will delete
In truth, that is the only way to improve the lives of the working class — to destroy capitalism and build communist societies where workers control our own lives. Otherwise, things may get better for a few workers for a short period of time, but the ruling class will always attack again and again, as we’ve seen repeated throughout history. It might sound utopian now, but with 9.6 billion people by 2050, skyrocketing inequality and dwindling resources to fight over (where’s Flint’s clean water?!) it may be our only chance to survive with any kind of quality of life.
The ruling class is afraid — and rightly so — of this scenario. So they will do everything in their power to stop it — from state violence to media manipulation, to replacing truckers and port workers with self driving vehicles, warehouse workers with robots, retail workers with self checkout algorithms.
So it will be interesting to say the least to see where Amazon ends up — in Maryland, home to multiple rebellions in the 1960s and the Baltimore Rebellion of 2015 or in Newark, home to the 1967 Rebellion. Of course Amazon began in Seattle, five years after the Anti-Globalization Rebellion of 1999. Either way, people, get ready for Hurricane Jeff Bezos.
Just another day under capitalism.
PS — Go see Boots Riley’s new film, Sorry to Bother You, in theaters now. Don’t wait until it’s on Amazon.