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What is with all these posts that just assume that 25,000 new humans are going to be plopped down in NYC? Has Amazon come out and said that they’re going to be

What is with all these posts that just assume that 25,000 new humans are going to be plopped down in NYC? Has Amazon come out and said that they’re going to be relocating 25,000 employees here? If not, then I suspect a solid majority of those hired will already be living and working in the greater NYC area. In those instances, any gain in income tax revenue will be meager.

closeparen 8y ago
Do you think 25,000 positions are going to disappear from the rest of the local economy? New York City's population growth from 2010-2017, without Amazon, averages out to 64k/year [0]. Adding 25,000 humans to New York is an entirely ordinary and expected occurrence that's been playing out every 4.5 months, not some sort of outrageous hypothetical. [0] https://www1.nyc.gov/site/planning https://www1.nyc.gov/site/planning
- BonesJustice 8y ago
  No, I don’t think 25,000 positions will disappear. I think many previously filled positions will become unfilled as those employees get hired by Amazon. Obviously, many (most?) of those positions will in turn be filled by someone else (and so on). But because of a strong preference to hire locally, that imbalance tends to ripple through the local labor market for some time before enough new labor is brought in to cancel it out. Point is, dropping 25,000 “new jobs” into the local economy does not result in an automatic gain of 25,000 new taxpayers, so acting like it’s an automatic $3.75 billion in net new taxable income is just absurd. Eventually it may get close to that number, but there will be a significant lag before it gets there.
dangwu 8y ago
It’s 25k new jobs though. Not replacing existing. So the relocation aspect doesn’t really matter.
cthalupa 8y ago
Any time a new job is created somewhere, regardless of whether or not it is filled by someone who was already local or not, the total number of available jobs + filled jobs goes up, as long as positions are backfilled. Positions usually are backfilled. So even if every person that works at Amazon NYC already lived in NYC, they will have left 25,000 other jobs that are now available. There are a few ways in which these previous jobs get backfilled: 1) More people moving around locally. This will generally increase the pressure for local businesses to keep their employees happier, to prevent the attrition. This will generally increase the pressure for the businesses looking to hire to also compete. The easiest way both parties do this is increasing salary - which increase tax revenue. Other ways are other employee perks, which might not directly result in more tax revenue, but should result in increased QoL for the employees. 2) People moving into the city. People move to where the jobs are. People moving directly increases tax revenues, because they're increasing the tax base. If they're not moving in large enough quantities to fill all the open positions, then again, companies have to do something to increase their attractiveness. Since this is usually increasing pay, when it gets high enough to attract someone to move it then is an even larger effect. 3) People coming of age for work that already lived there/graduating college there/etc. They might already reside in the city, but weren't part of the workforce. They'll need jobs, and again, a market that is competing for employees is one where employers have to differentiate themselves. NYC doesn't need the Amazon jobs to be filled by people moving to the city for it to be an economic win. They just need to have properly balanced tax incentives/breaks vs. the benefit achieved from these factors. I'm not an expert so I don't know if they've successfully done that, but there's no reason to think that this being successful is dependent on Amazon directly bringing in people from out of city/out of state. As long as this is allowed nationally, cities and companies are being rational actors in trying to make these sort of deals. It doesn't mean that they always work out (See: Wisconsin, Foxconn, as mentioned repeatedly), but it is certainly possible for a deal to be created that is mutually beneficial to the company and the locale.
- BonesJustice 8y ago
  Yes, exactly. There is an inherent and substantial lag between the time when 25,000 new job ‘capacity’ is added to the local labor market vs. when that capacity is filled. Obviously, the mere presence of another employer seeking out highly skilled talent will have other effects, like raising wages and rent. Like you, I don’t know whether this deal will be a net win or not. And I’m not suggesting Amazon has to bring in 25,000 new people for it to be a gain. I’m just calling nonsense on the posts with impossibly optimistic math (“25k jobs x $150k/yr = $3.75B in new taxable income, so it’s obviously a win, Q.E.D.”).

closeparen 8y ago

Do you think 25,000 positions are going to disappear from the rest of the local economy? New York City's population growth from 2010-2017, without Amazon, averages out to 64k/year [0]. Adding 25,000 humans to New York is an entirely ordinary and expected occurrence that's been playing out every 4.5 months, not some sort of outrageous hypothetical. [0] https://www1.nyc.gov/site/planning https://www1.nyc.gov/site/planning

BonesJustice 8y ago
No, I don’t think 25,000 positions will disappear. I think many previously filled positions will become unfilled as those employees get hired by Amazon. Obviously, many (most?) of those positions will in turn be filled by someone else (and so on). But because of a strong preference to hire locally, that imbalance tends to ripple through the local labor market for some time before enough new labor is brought in to cancel it out. Point is, dropping 25,000 “new jobs” into the local economy does not result in an automatic gain of 25,000 new taxpayers, so acting like it’s an automatic $3.75 billion in net new taxable income is just absurd. Eventually it may get close to that number, but there will be a significant lag before it gets there.

dangwu 8y ago

It’s 25k new jobs though. Not replacing existing. So the relocation aspect doesn’t really matter.

cthalupa 8y ago

Any time a new job is created somewhere, regardless of whether or not it is filled by someone who was already local or not, the total number of available jobs + filled jobs goes up, as long as positions are backfilled. Positions usually are backfilled. So even if every person that works at Amazon NYC already lived in NYC, they will have left 25,000 other jobs that are now available. There are a few ways in which these previous jobs get backfilled: 1) More people moving around locally. This will generally increase the pressure for local businesses to keep their employees happier, to prevent the attrition. This will generally increase the pressure for the businesses looking to hire to also compete. The easiest way both parties do this is increasing salary - which increase tax revenue. Other ways are other employee perks, which might not directly result in more tax revenue, but should result in increased QoL for the employees. 2) People moving into the city. People move to where the jobs are. People moving directly increases tax revenues, because they're increasing the tax base. If they're not moving in large enough quantities to fill all the open positions, then again, companies have to do something to increase their attractiveness. Since this is usually increasing pay, when it gets high enough to attract someone to move it then is an even larger effect. 3) People coming of age for work that already lived there/graduating college there/etc. They might already reside in the city, but weren't part of the workforce. They'll need jobs, and again, a market that is competing for employees is one where employers have to differentiate themselves. NYC doesn't need the Amazon jobs to be filled by people moving to the city for it to be an economic win. They just need to have properly balanced tax incentives/breaks vs. the benefit achieved from these factors. I'm not an expert so I don't know if they've successfully done that, but there's no reason to think that this being successful is dependent on Amazon directly bringing in people from out of city/out of state. As long as this is allowed nationally, cities and companies are being rational actors in trying to make these sort of deals. It doesn't mean that they always work out (See: Wisconsin, Foxconn, as mentioned repeatedly), but it is certainly possible for a deal to be created that is mutually beneficial to the company and the locale.

BonesJustice 8y ago
Yes, exactly. There is an inherent and substantial lag between the time when 25,000 new job ‘capacity’ is added to the local labor market vs. when that capacity is filled. Obviously, the mere presence of another employer seeking out highly skilled talent will have other effects, like raising wages and rent. Like you, I don’t know whether this deal will be a net win or not. And I’m not suggesting Amazon has to bring in 25,000 new people for it to be a gain. I’m just calling nonsense on the posts with impossibly optimistic math (“25k jobs x $150k/yr = $3.75B in new taxable income, so it’s obviously a win, Q.E.D.”).