Why Equity Matters for Amazon’s HQ2
This is a special CitiesSpeak feature by Carlos Delgado, senior associate for the Rose Center for Public Leadership, and Aliza R. Wasserman, senior associate with NLC’s Race, Equity, And Leadership (REAL) Initiative.
Since the announcement of the HQ2 shortlist, countless organizations and media outlets have examined both the stated criteria for Amazon’s decision and the outside factors that might influence it. From tax incentives to transit systems, analysts have identified every facet of municipal government that might tip Amazon toward a certain contender.
But one particular narrative around the HQ2 search has captured our attention and raised questions relating to our own work: Amazon’s interest in choosing a host that embodies equity and inclusion.
In an article entitled “Here’s what happens when inclusion is factored into Amazon’s list of 20 HQ2 city finalists“, the Brookings Institution presented a chart on the numerical diversity among the 20 finalists — as well as how well these cities maximize their diversity based on a measure of inclusion.
Generated under the auspices of Brookings’ Metro Monitor, the analysis tracked the economic performance of the nation’s 100 largest metropolitan areas along three dimensions: growth, prosperity, and inclusion. As leading contenders for equity and inclusion, it identified Austin, Texas, Raleigh, North Carolina, Nashville, Tennessee, Los Angeles, and Denver.
This statistical approach to equity measurement was curious — and the Brookings Institution was not alone. We have watched as several diverse organizations and outlets approached the question of equity in Amazon’s search using quantitative and econometric analysis.
True, hard data and quantitative analysis gives one piece of the inclusion equation — but they are not the whole picture. How, we must ask, can we measure and analyze those qualitative factors and subjectivity that hard data does not provide?
Building Equity in Communities
When deciding what public levers to use to lure large investors and employers like Amazon, it is important not to underestimate the impact incentives offered and the influx of workers can have on local infrastructure, housing prices and growing racialized income inequality.
In order to make sure that major investment and development are a net positive for racial equity, city leaders need a thorough understanding of the inequities in outcomes in their cities, and the range of historical factors that have led to them. These inequities situate populations differently to respond to the impacts of a major change like an influx of capital and residents to a city.
Impacts of this massive influx include increasing demand on both existing infrastructure and housing stock, overtaxing the supply of both market rate and affordable housing. In addition to the likely increase in housing costs, without the requisite development of additional workforce housing, some communities are likely to also experience an untenable increase in demand for affordable or middle-income housing.
In Seattle, median home prices have risen 69% since 2012, in part as a result of Amazon and tech spin-offs. Further, the ballooning of high paying tech jobs would likely increase income inequality—in Seattle, “the average tech salary was $98,215 last year, while more than half of the city’s residents earned less than $50,000.”
Finally, most discussions about Amazon’s ability to hire top talent obscure the need to expand employment opportunities for current residents of the cities where they may be entering the market. This discussion should factor in questions like how the tech giant will recruit locally-based workers for employment, and what will equip cities with the tools to make sure students of color are prepared to enter these employment pipelines. Based on the current racial and ethnic breakdown of staff and management at Amazon, it will take some strategizing and changes to policy and practice to create new hiring, recruitment and promotion pathways that disrupt systemic biases.
Confronting Issues on the Ground
There is no easy answer to developing economic development strategies that truly reflect an equity lens. But many experts agree that the best way to understand capacity and political will is through on-the-ground technical assistance programs. Both NLC’s City Solutions and Race, Equity And Leadership (REAL) programs work directly with elected officials and city leaders advising them on different issues such as equitable economic development and racial equity and healing.
In June of 2016, the Equitable Economic Development (EED) Fellowship program was launched as a partnership between NLC, PolicyLink and the Urban Land Institute (ULI). The EED Fellowship provides one year of on the ground technical assistance to an annual class of six U.S. cities to help them pursue more equitable and inclusive economic outcomes. The traditional set of local government economic development tools are at best blunt instruments for addressing inequalities across neighborhood, race, class, and gender lines creating the “Tale of Two Cities”.
At worst, some city tools have been exacerbating the very gaps that city leaders hope to remedy. This program sets out to help cities that are trying to balance economic growth with transparency, inclusivity, and a proactive approach to overcoming the legacies of exclusion and disinvestment for people of color, immigrants and low-income communities.
Currently in our second cohort, the cities of Austin and Nashville (shortlisted by Brookings) are part of the EED program. During the year-long engagement we act as community conveners, stakeholder meeting facilitators but more importantly acting as a neutral partner for different groups to provide candid and honest feedback to the EED Fellowship city teams in how they had and are conducting economic development practices.
We are the information filter for stakeholder and community voices to be heard. In most cities (though not necessarily all), the primary concern for residents and community members is the lack of trust. It takes a lot of capacity and political will to start building and gaining trust in communities that have been and have felt shortchanged from city policies.
Based on the ground work we are doing with the EED Fellowship, we know that business incentives and tax breaks are not enough for a community to thrive. Specifically, we have questions and concerns as to who those 50k new jobs that Amazon promises will go to? To people from the community? Is it a recruitment process strategy for Amazon? What partnership is Amazon looking to advance with the city and local post-secondary institutions to make sure current city residents are a hiring priority, and not only for warehouse and low skill job openings.
“Austin, like most growing cities, is experiencing significant displacement of our communities of color,” says Austin, Texas, Councilmember and NLC EED Fellow Delia Garza.
“This fellowship has helped the Austin team focus on things we can do to invest in small local businesses and help those businesses grow, thrive and employ Austinites. Any discussion of corporate incentives in any potential agreement with Amazon needs to be a two-way street. Because equity is such a high priority for the Austin City Council, our conversations need to include and focus on how an HQ2 in Austin will significantly help us meet our challenges of displacement, workforce development and how the company could enhance our community. We are looking to Amazon to provide good paying jobs with low barriers of entry for Austinites, many of whom simply want the ability and opportunity to adequately provide for their families and remain close to other family members in Austin, the city they were born and raised in. Austin is experiencing significant economic growth and we must ensure all Austinites are able to participate in that prosperity. “
NLC’s Race, Equity And Leadership (REAL) initiative works with cities across the U.S. to build up their capacity to face the critical issues resulting from structural inequities like racism. Working with teams from 17 cities across the country, our current National Municipal Learning Community on Truth, Racial Healing & Transformation brings staff and elected officials together for virtual peer learning sessions to help them explore and strategize opportunities to heal the racial tensions and advance their cities’ commitment and capacity to build to racial equity.
REAL works with local teams to understand and identify opportunities to address the conditions necessary for local elected leaders to build and leverage political will to make decisions informed by the historical root causes of inequities.
REAL highlights national best practices for city leaders to understand the factors on the ground that influence cities’ ability to make progress on racial equity. Factors include holding space for uncomfortable explicit conversations about race, understanding the different historical narratives in a community, and communicating openly about racial equity.
Leaders must also understand how to leverage their relationships and partnerships in the community and with institutional partners in the educational, business, faith and philanthropic sectors to bring all segments of their city into honest dialogue rooted in history.
Factors like whether and how Amazon will recruit existing residents to the pipelines for its new positions and whether the local educational system prepares children of color and white children equitably to participate in employment opportunities with Amazon should be on the table in conversations jurisdictions have with the tech giant.
The political will and capacity of local elected officials to name structural factors that contribute to inequities is key to their ability to building not just equitable hiring practices but addressing a range of equity issues when negotiating with potential investors like Amazon. The increased traffic congestion due to expanded demands on existing roadways would likely have a disproportionate impact on communities of color, who already have longer commute times on average.
Mayors, as voices of authority tied into local communities, can influence the perceptions of community members and local institutions, helping to set the trajectory of equity in their cities. The values prioritized by cities in their negotiation with potential investors, developers and employers can set a tone for broader embrace of inclusive strategies.