By Karen Lewis, Greg Kelley and Mark Meinster
While Mayor Rahm Emanuel and Gov. Bruce Rauner compete to see who can give Amazon a bigger tax break to bring its headquarters to Illinois, they’ve both ignored a critical detail: These types of deals don’t work.
In 2011, Sears was promised $150 million over 10 years in state subsidies to keep jobs at its Hoffman Estates headquarters, but the company has eliminated hundreds of the jobs it agreed to retain and is now openly talking about going out of business. Also in 2011, Illinois taxpayers gave Motorola Mobility $118 million to keep 3,000 jobs in Illinois. After repeated cuts, only a fraction remain. Two years after Illinois gave Mitsubishi $3.66 million in state Economic Development for a Growing Economy tax credits, the company closed its Normal plant and laid off 1,200 workers.
These giveaways shortchange taxpayers and go to companies that don’t often need them. For example, Amazon recently started delivering its own packages to shorten delivery times and lower shipping costs. The Chicago metropolitan area is one of the nation’s premier transportation hubs, so Amazon would have inevitably built multiple facilities here, yet Illinois still gave Amazon $112 million to build its local warehouse network.
To add insult to injury, Amazon’s local warehouse jobs pay poverty wages. Amazon’s McKinley Park workers are limited to four-hour shifts, which keeps salaries low, while schedules make it difficult for employees to find a second job to supplement income. Delivery drivers compete for two-hour shifts using Amazon’s proprietary Flex mobile platform and deliver packages in their personal vehicles. Drivers earn far less than the UPS or FedEx drivers they’ve replaced after paying for expenses such as gas, insurance and maintenance. If Amazon is going to be invited to Chicago, we need quality, full-time jobs that support working families.
Amazon’s business plan will instead likely displace thousands of Chicagoans who currently earn a living wage, intensify the exploitation of low-wage workers and hurt thousands of struggling families just as it did in Seattle.
Amazon’s Seattle campus and its massive workforce have displaced thousands of area residents, as home prices have risen faster than in any other U.S. city. Seattle’s median home price is now $729,000, more than double that of Chicago. An Amazon HQ2 in Chicago would supercharge gentrification in our neighborhoods, just as in Seattle. Real estate experts predict that pressure on low-income residents in Chicago’s gentrification hot spots will intensify, and even residents in previously nongentrified neighborhoods would face displacement.
An Amazon deal would likely exacerbate those gentrification trends and represent a massive transfer of resources to a wealthy corporation — resources that should instead be invested into communities besieged by unemployment, school closings and the violence produced by disinvestment and despair. Meanwhile, Mayor Emanuel sits on hundreds of millions of dollars in Chicago Housing Authority funds that could reverse the greatest forced exodus of African-American families in Chicago’s history.
As with previous efforts to entice high-profile companies to the region, some are demanding that Chicago pay whatever it costs to land Amazon’s new headquarters. But how much will it really cost? Wisconsin’s recent $3 billion giveaway to Foxconn has set a new — and spectacularly high — benchmark. This scale of expenditure in Chicago would further undermine state and local funding for our schools, neighborhoods, health care system and most-vulnerable residents.
Amazon CEO Jeff Bezos has an opportunity to create a new paradigm for corporate citizenship. As a condition of any proposed subsidies, Amazon should agree to enter into a binding community benefits agreement designed to offset the company’s impact on schools, housing, job quality and state and local budgets. A CBA would include specific targets for investment in minority and low-income public schools, create affordable housing units to offset those that will otherwise be lost, support affordable health care for workers and their families, and ensure that all Amazon workers earn at least $15 an hour and have the right to form a union.
Our elected officials have historically opened their checkbooks in return for flowery promises and fancy photo opportunities, but little else. The rest of us should oppose any deal until we get Mr. Bezos’ signature on a binding CBA — one that has the full support of Mayor Emanuel and is built on genuine commitments to ensure that this city works for all of our residents.
Karen Lewis is president of the Chicago Teachers Union; Greg Kelley is president of SEIU Healthcare Illinois and Indiana; Mark Meinster is executive director of Warehouse Workers for Justice.