With the Seattle Times editorial board and others going gaga over Jeff Bezos’ new foray into philanthropy, anything less than a love-fest feels a little like kicking a big-eyed puppy.
After all, $2 billion is, technically speaking, a shit-ton of money — nearly equal to the entire annual investment in family homelessness from the federal government. And yes, the numbers of homeless kids enrolled in Washington state schools is at an all-time high.
So what’s not to like? At a time when federal, state and local resources to address homelessness and fund education are radically inadequate, this sudden largess feels like a big warm Bezos hug. But here’s the thing: You don’t become the richest man in the world by indulging your heart. So let’s talk about taxes, legislative coersion and low-wage labor.
To be fair, avoiding taxes to the full extent of the law is just what corporations do. It’s what the President of the United States called “smart.” It’s as American as a Virgin Island tax shelter. That’s not Amazon’s fault — it’s about corporate capture of the legislative process and taking advantage when possible.
In theory, companies do pay taxes. But corporate taxation has, of course, always come with big loopholes. Currently, especially in Washington, those loopholes are big enough to fly a Boeing jet through.
When the tax rate for Fortune 500 companies was around 35 percent, tax breaks on executive stock options reduced the amount actually paid to more like 22 percent. After Trump’s tax bill passed, the statutory tax on corporations was reduced to 21 percent, with all the standard loopholes intact. And thanks to new rules last year, Amazon has enjoyed another $789 million in savings. All things told, Amazon paid zero federal taxes on a record $5.6 billion in U.S. profits in 2017. Bezos, himself, is also keeping his money in his pocket; as a Washington resident, he pays no state income tax.
Still grateful? Let’s move on to how Amazon has inspired local governments to fork over tax breaks and other benefits in exchange for jobs.
According to the Institute for Taxation and Economic Policy, Amazon has received at least $1.6 billion to date in state and local taxpayer subsidies. While the company has recently become more skilled at keeping these agreements confidential, the trend here is clear. Between 2000 and 2010, local subsidies to Amazon totaled a modest $51 million. In 2017, the Amazon Tracker at the website goodjobsfirst showed more than $458 million in public money flowing toward Bezos’ pockets.
And this is likely the tip of the iceberg. While most local attempts to woo the H2Q golden goose have remained confidential, New Jersey is on record offering $7 billion in tax breaks should Amazon come to Newark.
Fair enough, you might say. It is, after all, Newark. But before we’re done, let’s look at the big benefit upon which two dozen localities are bidding — jobs.
During the HQ2 frenzy, everyone was touting Amazon’s high-paying tech jobs. In reality, that is not the bulk of the Amazon workforce. While median pay at Facebook, for example, is $240K annually, Amazon’s median annual pay is just $28,446.
That’s because most Amazon jobs are in the company’s 100-plus fulfillment and sorting centers. All told, this represents about 560,000 warehouse jobs, most of which are part-time and without benefits. Workers are not unionized, and the reports have indicated that the working conditions are downright barbaric. Workers have reported skipping bathroom breaks, becoming dehydrated and even getting seriously injured on the job. And don’t get me started on Amazon CamperForce, which seasonally employs seniors reduced to living in RVs for the holiday rush.
Perhaps you’re still thankful to Bezos for his merciful donation, but exploiting the marginally-employed elderly to work 10-hour warehouse shifts with no benefits turns my Amazon smile upsidedown.
Critics have said that Amazon’s newfound commitment to philanthropy is corporate whitewashing, intended to make a heartless business model more palatable. I’m afraid it’s much worse than that.
The New York Times reports this year that Fortune 500 contributions to 1,087 charities were indirectly linked to 451 members of congress. This means that corporate philanthropy often amounts to a form of tax-exempt influence seeking; less traceable but just as powerful as a PAC donation. Given Amazon’s proven sophistication at working political connections for corporate profit, we have to assume Bezos’ money comes at a price.
He says he’s here to do good. My bet is that he does very well indeed.
Tim Harris is the Founding Director Real Change and has been active as a poor people’s organizer for more than two decades. Prior to moving to Seattle in 1994, Harris founded street newspaper Spare Change in Boston while working as Executive Director of Boston Jobs with Peace.
Check out the full Sept. 19 - Sept. 25 issue.
Real Change is a non-profit organization advocating for economic, social and racial justice. Since 1994 our award-winning weekly newspaper has provided an immediate employment opportunity for people who are homeless and low income. Learn more about Real Change.