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Every City in Texas Wants Amazon’s New Headquarters. They Should Think Twice The case against HQ2. by LEIF REIGSTADSEPTEMBER 26, 2017

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When Amazon announced earlier this month that it’s looking for a new city to build a second headquarters, nearly every metro area in Texas jumped at the opportunity, from Austin and Houston to El Paso and Frisco. On the surface, it’s pretty obvious why everyone wants Amazon: The new “HQ2” hub is projected to bring with it up to 50,000 jobs. With proposals due on October 19, city officials are bending over backwards to woo Amazon CEO Jeff Bezos. Amazon is expected to announce its final destination sometime next year.

The city of Frisco, for example, is literally offering to build its city around HQ2, according to the New York Times. “Our city’s only about 60 percent built out, so we’ve got a lot of available land where we can build to suit,” Frisco Mayor Jeff Cheney told the Times this week. “We play to win. We’re innovators. We’re forward thinkers, and we’re serious.” Not to mention that the city’s Twitter account fired off a very punny tweet last week:

Despite Frisco’s enthusiasm, Austin and Dallas are widely believed to be the only Texas cities to have a real shot at landing HQ2. Amazon released a very specific wish list for the new project, which may ultimately end up eliminating many of Texas’s cities. The company wants a metropolitan area with more than one million people, on-site access to mass transit, a commute of 45 minutes or less to an international airport, easy access to a major highway or arterial road, and close proximity to good universities, plus fiber-optic internet connections and strong cell phone service. It’s a lot to ask of a city, and the competition is tough, with New York, Boston, Chicago, and Toronto all in the running. But for all the Texas cities out there that will inevitably fall short in their bids for HQ2, emerging as the losers may not be so bad after all. As much as cities would stand to benefit from 50,000 new jobs, the new headquarters will also bring a fair share of problems.

For starters, the quality of those 50,000 jobs is questionable. Amazon has long wrestled with a poor reputation for the way it treats low- and mid-level workers. A bombshell report by the New York Times two years ago exposed the company’s poor treatment of employees, characterizing the workplace as “bruising”:

At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others. (The tool offers sample texts, including this: “I felt concerned about his inflexibility and openly complaining about minor tasks.”)

The Times also shed light on the way the company treated its female employees in particular. One woman told the Times that her boss said that motherhood would keep her from working the long hours required for success in a higher managerial position. The Times also obtained an internal online discussion in which several former high-level executives and other women participating in the discussion said that the company’s “leadership principles” made it harder for them to move up the ladder. “They said they could lose out in promotions because of intangible criteria like ‘earn trust’ (principle No. 10) or the emphasis on disagreeing with colleagues,” the Times wrote. “Being too forceful, they said, can be particularly hazardous for women in the workplace.”

The allegations of mistreatment get even worse. From the Times:

A woman who had thyroid cancer was given a low performance rating after she returned from treatment. She says her manager explained that while she was out, her peers were accomplishing a great deal. Another employee who miscarried twins left for a business trip the day after she had surgery. “I’m sorry, the work is still going to need to get done,” she said her boss told her. “From where you are in life, trying to start a family, I don’t know if this is the right place for you.” A woman who had breast cancer was told that she was put on a “performance improvement plan” — Amazon code for “you’re in danger of being fired” — because “difficulties” in her “personal life” had interfered with fulfilling her work goals. Their accounts echoed others from workers who had suffered health crises and felt they had also been judged harshly instead of being given time to recover. A former human resources executive said she was required to put a woman who had recently returned after undergoing serious surgery, and another who had just had a stillborn child, on performance improvement plans, accounts that were corroborated by a co-worker still at Amazon. “What kind of company do we want to be?” the executive recalled asking her bosses. The mother of the stillborn child soon left Amazon. “I had just experienced the most devastating event in my life,” the woman recalled via email, only to be told her performance would be monitored “to make sure my focus stayed on my job.”

Amazon did push back on the 2015 Times article, disputing some of the allegations, but the paper stood by its report. It remains the most damaging blow to Amazon’s reputation to date—a front-page expose in the nation’s newspaper of record—but horror stories from the company’s workplaces have popped up again and again over the past few years. Warehouses temperatures that run from below-freezing to dangerously hot. Unrealistically high work goals. Video scoreboards that shame workers accused of theft.

It’s worth noting that some of Amazon’s worst workplace issues appear to have occurred in warehouses, while HQ2 will likely employ more mid- to high-level positions. But Amazon’s history as an employer certainly doesn’t bode well for the 50,000 future workers that will come with HQ2.

Amazon’s workplace environment issues have been well documented, as has the negative impacts a massive headquarters can have outside of the workplace. Look no further than Seattle, home to Amazon’s main headquarters. Should any Texas city land HQ2, it should also expect skyrocketing housing prices and an increase in traffic congestion from the sudden influx of highly-paid workers. Some in Seattle have long blamed Amazon for gentrifying many of the city’s most unique neighborhoods beyond recognition.

Housing prices in Seattle are rising faster than anywhere else in the nation. According to Business Insider, from 2005 to 2015, Seattle’s median rent jumped from $1,008 to $1,286, an increase nearly three times the national median, while the city’s median home price skyrocketed 17 percent in the last year, reaching $730,000. The city is also plagued by construction, as Amazon has snatched up more new office space than every other company in the city combined, “helping Seattle become the crane capital of America and a near-constant construction site,” writes the Seattle Times. Texas cities like Austin, Houston, Dallas, and San Antonio are already growing rapidly, and gentrifying to various degrees. An urban HQ2 campus could expedite that process and drive out longtime residents who can no longer afford to live there.

There’s clearly some ill will in Seattle directed toward Amazon. “Amazon is about to detonate a prosperity bomb in your town,” Seattle Times columnist Danny Westneat wrote earlier this month in an open letter to cities vying for HQ2. “In your city, the blast radius will also inexorably consume a string of hundred-year-old diners, dive bars and legendary mom and pops that ‘just couldn’t keep up’ with the boom. In its place come the new and sterile; our restaurant scene in the Amazon Jungle was recently compared to an airport food court. Also, don’t be surprised if you suddenly find your city ‘broverwhelmed.’ Amazon has such a male-dominated workforce we now have 130 single males for every 100 single females…. Anyone can just look out the window to see we’ve already transmogrified the center city into a giant company plaza.” Seattle, Westneat wrote, did not react to the announcement that Amazon was looking at other cities as a loss, but rather with “a palpable sigh of relief.”

In light of that far-from-ringing endorsement from the locals, Amazon has actually made efforts lately to rehab its public image in Seattle, housing 200 local homeless people in one of its new buildings and donating tens of millions of dollars to a cancer research center and the University of Washington, according to Business Insider. But those efforts certainly don’t erase the company’s problems.

Adding to the downside of landing HQ2, any Texas city dreaming of Amazon better be prepared to fork over massive tax breaks. Amazon has received more than $1 billion in public subsidies for its facilities since 2000, including a $7 million subsidy for a Houston warehouse last year. The company is clearly looking for a big break for HQ2. “Incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process,” Amazon wrote in its call for bids. One economic policy expert told the Times this week that this sort of tactic is basically “blackmail” and equates to “corporate welfare.”

With the proposal deadline fast approaching, Texas cities are scrambling to put together strong bids for HQ2. But first, they should take the time to think long and hard about whether they actually want it.

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