A new report by EPI economist Ben Zipperer and economic analyst Janelle Jones finds that Amazon fulfillment centers do not boost overall employment in the counties where they open—undermining the case for providing large tax breaks and incentives to lure Amazon facilities to a particular place.
Analyzing data for counties in 25 states containing Amazon fulfillment centers, the authors find that within two years, the opening of an Amazon fulfillment center leads to a 30 percent increase in warehouse and storage employment in the surrounding county. However, this does not lead to an increase in overall employment in the county—and in some cases, the data even suggest reductions in overall employment.
“Amazon has received over $1 billion in state and local subsidies to open its fulfillment centers at taxpayers’ expense—but does not increase overall employment in the county,” said Zipperer. “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.”
The authors speculate that jobs created in warehousing and the storage sectors are offset by job losses in other industries, or that the employment growth generated by Amazon is simply too small to be meaningfully detected in the data.
“As cities and counties compete to host new Amazon facilities and its new headquarters, policymakers should be cautious about giving away the store,” said Jones. “Instead of pre-committing to giving away public funds to attract employers, communities should demand a concrete demonstration that an employer’s arrival will make their region a more prosperous place for working people.”