Amazon.com (AMZN) has likely received $1 billion in incentives from state and local governments in 25 states where the online retailing giant operates 95 fulfillment centers, according to a new study by the left-leaning Economic Policy Institute. Yet those incentives may not have paid off, the study suggests. The massive Amazon distribution centers failed to boost overall employment in their markets within two years of opening even as they boosted distribution employment by 30 percent, the study notes. The authors, Ben Zipperer and Janelle Jones, suspect that’s because workers are either shifting industries or the Amazon facilities are creating too few new jobs to make a dent in overall employment. (whole story)
CBS Moneywatch
February 5, 2018
Nonetheless, an Economic Policy Institute report issued last week questioned where such incentives are worth the investment. Based on data for counties in 25 states containing Amazon fulfillment centers, the report concluded the warehouses do not boost overall employment and in some cases might even cause it to drop. The report did find that within two years of opening, a fulfillment center can boost warehouse and storage employment by 30 percent. The report’s authors speculated that the warehouse and storage jobs created could be offset by job losses in other industries, or that the employment growth generated by Amazon is too small to detect. “As cities and counties compete to host new Amazon facilities and its new headquarters, policymakers should be cautious about giving away the store,” stated Janelle Jones, one of the authors.
Pittsburgh Post Gazette
February 5, 2018
A study by the Economic Policy Institute, a left-leaning think tank, estimated that the change would cost current tipped workers $5.8 billion a year in pay. It cast doubt on the idea that employers would use the money to compensate other workers better. Heidi Shierholz, a former chief economist at the Labor Department who oversaw the study, said that under standard economic theory, employers were unlikely to pay workers more than needed to attract and retain them, which they are by definition already doing in most cases. She predicted that if the regulation took effect and employers decided to share tips with these workers, “their base pay would be reduced and there would be no more take-home pay. (Heidi quoted throughout)
The New York Times
February 5, 2018
Of course. The problem is that employers wouldn’t necessarily be required to actually pass tips on to the workers since those tips would legally belong to the owners, explained Heidi Shierholz, a former Labor Department chief economist and lead author of an Economic Policy Institute report which estimated that the change could wind up shifting some $5.8 billion in wages from workers to employers. (Heidi quoted throughout)
Mic
February 5, 2018
The Department of Labor estimates there are 1.08 million tipped servers (waiters and waitresses) and more than 200,000 tipped bartenders across the United States. While local regulation will mean not all of these workers are affected, the Economic Policy Institute estimates that tipped workers would lose $5.8 billion per year in tips that could be pocketed by their employers. The Department of Labor did not offer its own economic impact analysis, but Bloomberg Law reported that top Labor officials intentionally suppressed internal analysis that showed the rule change would have a negative impact on tipped workers.
Fortune
February 5, 2018
A proposed federal rule that some describe as “tip stealing” could mean a nearly $63 million loss for workers in Nebraska who get tips as part of their pay. The public comment period ends Monday on a Labor Department proposal to allow employers to take the tips earned by their workers, as long as those workers are paid at least minimum wage. Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, served as Chief Economist at the Labor Department in the last two years of the Obama Administration. She noted the government did not include a cost-benefit analysis in the proposal about its impact. (whole story)
Public News Service
February 5, 2018
El instituto de Política Económica (Economic Policy Institute) estima que los empleadores se quedarían con $5.8 mil millones en propinas que generalmente hubiera quedado en manos de los trabajadores.
Telemundo
February 5, 2018
After analyzing data for counties in 25 states containing Amazon fulfillment centers, the Economic Policy Institute (EPI) found that within two years the centers lead to a 30% increase in warehouse and storage employment in the surrounding county. But the analysis also found no increase in overall employment in the county and, in some cases, the data suggested a reduction in overall employment. Amazon has received over $1bn in state and local subsidies to open fulfillment centers across the US. The report questions the efficacy of such tax breaks if they do not contribute to a net growth in jobs. “If policymakers instead invested in public services – particularly in early-childhood education and infrastructure – that would be a much stronger recipe for long-term economic development, rather than giving tax breaks to national employers like Amazon,” said EPI economist Ben Zipperer. (whole story)
The Guardian
February 2, 2018
Amazon has been astoundingly successful in getting state and local governments to pay for its worksites. The online retail giant has staff dedicated to securing local tax incentives, abatements and subsidies for placing its warehouses (dubbed “fulfillment centers”), totaling more than $1.1 billion since 2000. And for months, cities have engaged in an even more unseemly spectacle: promising billions to attract Amazon’s second headquarters. The losing bids will likely set the ransom rate Amazon can demand to locate its fulfillment centers in the future. Until now, nobody has looked specifically at whether these giveaways are really worth the cost. A report from the Economic Policy Institute released on Thursday says emphatically that they’re not. (whole story)
In These Times
February 2, 2018