Where Amazon should locate their new headquarters

Where Amazon should locate their new headquarters


From The New York Times:

Dear Amazon, We Picked Your New Headquarters for You

By Emily Badger, Qouctrung Bui and Claire Cain Miller | September 9, 2017

Amazon has set off a scrum among cities that are hoping to land the company’s second headquarters — with the winner getting the prize of a $5 billion investment and 50,000 new jobs over the next two decades. We’re offering to help, using Amazon’s own criteria to identify a winning city.

The company announced this week that it was looking for a metropolitan area in North America with at least a million people, so we’ve started with the map above. (With apologies to Canada, we’ve set aside Toronto and several other large cities because they’re not included in most of the data sets we’ve used to determine which places meet Amazon’s needs.)

In the eight pages of guidance that Amazon has provided cities, one of its central requirements is a “stable business climate for growth.” That led us to this subset of places:

And you can read the rest, as the Times narrows down the various cities, paring it down to one which they say best meets Amazon’s criteria. But I say that the criteria are wrong.

Amazon is owned by founder and Chief Executive Officer Jeff Bezos, whom The Washington Post described as mostly liberal, with a libertarian bent.¹ Mr Bezos is very much an opponent of President Trump.

However, while the supporters of Hillary Clinton and the Democrats came mostly from our large urban areas, if they really believe in helping people, as they claim, then Mr Bezos should be pushing Amazon to locate its next headquarters not in one of America’s most prosperous cities, but in less developed areas. From Mr Bezos’ friends, Bill and Melinda Gates, in The Wall Street Journal:

Let’s Keep Investing in the World’s Poor

U.S. foreign aid has helped developing countries make huge progress against disease and poverty — and this is no time to reverse course

By Bill Gates and Melinda Gates | Updated Sept. 13, 2017 10:44 a.m. ET

The two of us have spent nearly every day of the past 17 years working on the fight against disease and poverty, but today, we are concerned. After a generation of historic progress, the world’s commitment to helping its poorest people is more uncertain than at any time since we started our foundation.

President Donald Trump has recommended a cut of some 30% to the State Department’s budget, which includes the funding for the U.S. Agency for International Development and most of America’s investments in global health. Congress is unlikely to go along with such large cuts, but our best guess is that, by the time the dust settles, key foreign-aid programs will be scaled back. Even modest cuts would represent the reversal of a long-term trend of increasing U.S. support for foreign aid, and a similar mood of retrenchment has taken hold elsewhere. In the U.K., the world’s second-largest aid donor, there has been heated public debate about the value of foreign assistance, but the government has held the line on its commitments.

Public-opinion research shows that many Americans want to spend less on foreign aid, and even those in favor of it register soft support. But the research also reveals that most don’t have a clear understanding of what foreign aid is, how much the U.S. spends on it or what it has accomplished.

There’s more at the original, but, to me, this raises an obvious point: if the gates, and I assume Mr Bezos, believe that the United States should be helping the poor in other nations, shouldn’t their corporate investments in the United States be slanted to help poorer Americans? Rather than building a huge new corporate center in an urban area flush with corporate centers, Amazon should build in eastern Kentucky.

With one of the United States poorest populations — CNNMoney reported that Beattyville was recently “the poorest white town in America” — eastern Kentucky still has a decent, if now underutilized, rail network, and access to major roads via the Mountain Parkway. If Amazon were to locate in eastern Kentucky, you could be your last shilling that Governor Matt Bevin and the General Assembly would come up with the money to improve other infrastructure needs.

Both the University of Kentucky, in Lexington, and Eastern Kentucky University, in Richmond, are reasonably close, and Lexington’s Blue Grass Field, while not a large airport — thus not the cacophonous mess of Dulles or Charlotte or Philadelphia — would certainly serve Amazon’s needs. Putting Amazon’s new headquarters would lift wages and businesses all around the area, and hit the social agenda people like Mr Bezos would like to see.

There are other benefits as well: with the regions higher unemployment, Amazon workers would have fewer other options, and would be likely to stay longer; increased retention saves on job training costs, and more experienced workers are normally more productive. The far lower property costs in the region would mean that the land needed for the facilities would cost less, and lower wages in the area would mean lower construction costs.

To be sure, the same arguments could be made for other impoverished areas in the country; I write about eastern Kentucky because that’s where I live.² But regardless whether in the Appalachians or some other less developed area, Amazon and a lot of other corporations, many run by people with liberal political views, ought to think about getting out of the wealthier places and spread their development where it would provide more jobs in areas which need more jobs.
Cross-posted on The First Street Journal.
¹ – At the time the article was published, Mr Bezos had committed to buying the Post, but the sale had not been completed. The Post is now owned by Mr Bezos personally, and is not part of Amazon.
² – I am retired, and not looking to work for Amazon; this is not some kind of personal plea for me.

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