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Wednesday, December 6, 2023
Dec. 6, 2023

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Westneat: Groveling for HQ2 is for suckers


Late last month, Boeing quietly posted its jobs numbers for this state. It didn’t get much coverage, as Boeing made no announcement. But The Seattle Times’ aerospace reporter noted on Twitter that the day nevertheless marked a “dismal milestone”: “20,000 local jobs cut in 5 years,” he summed up.

That’s 23 percent of its Puget Sound workforce, gone.

Boeing has slashed 16,684 jobs since that giddy three-day weekend back in 2013, when state lawmakers rushed into a special session and rushed out the largest state-tax subsidy to a private company in American history.

Huzzah! So not only are we the biggest when it comes to corporate welfare. It turns out we’re also the worst when it comes to cutting a good deal.

I bring up this history now because a) it’s exactly the type of thing politicians were hoping might slip our collective minds, and b) it’s now looking as if our record-setting giveaway to Boeing may not be No. 1 much longer.

The state of New Jersey has offered $5 billion in tax breaks for Amazon’s new headquarters.

That’s still less than the $8.7 billion we gave Boeing. But it’s only an opening offer, from one state. The national prostrating sweepstakes for Amazon’s HQ2 seems destined to end up much higher.

Wisconsin is giving Foxconn, a Taiwanese corporation, $3 billion, or an estimated $300,000 per job, for a flat-screen TV plant there.

At that rate, for Amazon’s promised 50,000 jobs, some state would have to pay an incredible $15 billion.

We may be joining the bidding party. In a vague proposal released by King County, each Puget Sound city “will have the opportunity to provide a particular package of opportunities and incentives” to Amazon. The state wasn’t mentioned, but to compete it would almost certainly have to rush out another tax-break package rivaling New Jersey’s.

Illustrating the absurdity of this civic arms race, an Atlanta suburb upped our ante right off the charts by completely taking out the middleman — itself. It pledged to simply incorporate Amazon as its own city.

Why don’t we just give Amazon the city of Tacoma? Two problems solved in one.

But seriously: Can we please not grovel along with any part of this humiliating and pointless spectacle?

My vote for backbone of the week goes to the mayor of San Jose, Calif., home to Silicon Valley, who wrote that reporters have been all over him about what gifts he’s got in mind for Amazon. “My response? None,” Mayor Sam Liccardo wrote in The Wall Street Journal.

He detailed why these corporate megadeals are for suckers. The tax cuts are guaranteed, while the jobs usually aren’t (hello, Boeing). The taxes are just a “cherry-on-top rounding error” for the corporation, but they shift the tax burden to others while pinching the very government services that companies say they most want.

And then here’s the reason I hope could echo most from the green roof of Seattle City Hall: “Some 95 percent of Silicon Valley’s job growth comes from new small-business formation and when those homegrown companies develop into larger firms,” Liccardo said.

Of all cities, you would think we would know this in our bones. Because of Boeing, which started here in a barn. Because of Microsoft. And now Amazon. Seattle isn’t great because we poached behemoths from somewhere else. They grew here organically.

The point is: Seattle won the Amazon lottery already. Now we should have the confidence to know that it’s the next Amazon that is where the real action is.

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