5 ms·

A key aspect of company towns is that there's only one serious employer. This then gives that employer a very dangerous amount of power, which is why we don't l

by jefftk 5y ago

A key aspect of company towns is that there's only one serious employer. This then gives that employer a very dangerous amount of power, which is why we don't like this structure. Possibly this is true in don't places with Amazon, but the article doesn't make the argument. The closest they get is saying that Amazon is a large employer in Seattle, but that's not enough -- the city is large enough that there are tons of non-Amazon options.

randomdata 5y ago
Historically, company town companies also paid in their own currency that was only spendable in the company stores. Amazon still appears to be paying in standard dollars.
- beckman466 5y ago
  Be careful what you wish for!
- kazen44 5y ago
  isn't this mainly because paying in anything other then the national currency is illegal in most western nations? For tax purposes, even things like free lunch are considered paymeny aswell.
  - ghaff 5y ago
    I am not an accountant but presumably any material issuance of some sort of scrip that could be exchanged for goods would be seen as tax evasion. Free meals are allowed under certain guidelines, which seem to be written in a way that generally lets companies like Google skate right up to the edge and not go over it (AFAIK). Things like loyalty points and rebates on business expenses are similarly ignored.
    - gruez 5y ago
      > I am not an accountant but presumably any material issuance of some sort of scrip that could be exchanged for goods would be seen as tax evasion. It's not. You just have to pay taxes on it.
      - ghaff 5y ago
        At which point, why would I want "fake" money that I could only spend in one place rather than real dollars? (That said, this does happen at a small scale with things like peer reward points and so forth but that's a fairly straightforward point->dollar exchange through things like gift cards.)
        gruez 5y ago
        >At which point, why would I want "fake" money that I could only spend in one place rather than real dollars? You might want it because the company paying you "fake" money gives you more than the competitor that gives you legal tender. The company might also give you access to discounted goods/services, which makes each dollar of the "fake" money more valuable. There's another comment that goes to this in more detail: https://news.ycombinator.com/item?id=27948860 https://news.ycombinator.com/item?id=27948860
  - ReptileMan 5y ago
    Assume that I give you on top of salary Amazon coupons for 1000$. No tax shenanigans. I (employer ) pay all needed taxes to be clean with IRS. This way I can guarantee quite a nice chunk of revenue for the whole foods store that is opened there. And I effectively subsidize it.
    - CydeWeys 5y ago
      Even better: Make it an employee discount of 50% off at Whole Foods for all Amazon employees, up to some monthly limit. If structured this way, would it even be taxable at all? I'm not aware of employee discounts being taxed.
      - bzbarsky 5y ago
        In the US tax handling of employee discounts at least on physical goods is as follows: if the discount brings the price paid below cost, then the below-cost subsidy is treated as income received by the employee. Concrete example: Company sells widgets for $12, of which $2 is profit. Then as long as the employee price is at least $10 there are no tax implications for the employees. If it were $9 they would owe tax on $1 per widget bought, etc. That said, some companies will pay the relevant taxes for you, or at least try to by guessing at your marginal rate...
        taurath 5y ago
        I wonder how clearance items work with that.
        bzbarsky 5y ago
        That is a good question. I don't know offhand; it had not come up in the cases I was dealing with.
  - burntoutfire 5y ago
    > isn't this mainly because paying in anything other then the national currency is illegal in most western nations? Which makes company towns illegal, hence Amazon is not creating company towns...
    - deleted 5y ago
      [deleted]
  - DenisM 5y ago
    >isn't this mainly because paying in anything other then the national currency is illegal in most western nations? I can offer you 10 chickens to dig a trench, nothing illegal about that. You'd have to pay income tax tho, and the IRS does not accept (fractions of) chickens.
    - _delirium 5y ago
      As a one-off barter or contractor arrangement sure, but in the U.S., if you're paying anyone who'd be considered an employee, you have to pay at least minimum wage in cash or equivalent, except that you can deduct the cost of room and board if you provide it. Details: https://www.law.cornell.edu/cfr/text/29/531.27 https://www.law.cornell.edu/cfr/text/29/531.27
      - DenisM 5y ago
        Good point, I did not know that.
  - deleted 5y ago
    [deleted]
  - paulddraper 5y ago
    Regardless the cause, it would still make it not a company town, yes?
- vmception 5y ago
  Every time I pay an employee with a crypto we issued, I always chuckle that I get to pay in corporate scrip It's like "lol I read the wikipedia article about this!" anyway, great way to save costs, extend runway and get massive tax deductions at the same time. the best tax deductions are ones that don't require you spending your fiat dollars, so this is pretty high up there.
Itsdijital 5y ago
It's a band aid to bridge the gap between the insane demand in HCOL areas and the inability to find labor in those markets. How can you staff a warehouse for $15/hr in places were a studio starts at $1250/mo? I wouldn't be one bit surprised of Amazon starts getting into real estate, offering employees monthly "rent vouchers".
- imbnwa 5y ago
  Or just starts approximating to the future of "Sorry to Bother You" and just builds its own campus where you live and work.
- ghaff 5y ago
  Why wouldn't they just pay more? If they're giving you a rent voucher for an apartment whose market rate is $1250 a month, normally that would show up as income on your W2. https://www.thebalancesmb.com/when-is-employee-housing-taxable-to-the-employee-4158182 https://www.thebalancesmb.com/when-is-employee-housing-taxab... There are cases like remote locations where an employer can provide housing tax-free but likely not near an expensive city.
  - scotty79 5y ago
    They might issue voucher nominally for $1250. But redeem it for $1000. So the landlords might decide if they want to not rent to Amazon employees or agree to take less from them but keep the high listing price for others.
steviedotboston 5y ago
Jacobin is not a publication worth taking seriously.

by jefftk 5y ago

randomdata 5y ago

Historically, company town companies also paid in their own currency that was only spendable in the company stores. Amazon still appears to be paying in standard dollars.

beckman466 5y ago
Be careful what you wish for!
kazen44 5y ago
isn't this mainly because paying in anything other then the national currency is illegal in most western nations? For tax purposes, even things like free lunch are considered paymeny aswell.
- ghaff 5y ago
  I am not an accountant but presumably any material issuance of some sort of scrip that could be exchanged for goods would be seen as tax evasion. Free meals are allowed under certain guidelines, which seem to be written in a way that generally lets companies like Google skate right up to the edge and not go over it (AFAIK). Things like loyalty points and rebates on business expenses are similarly ignored.
  - gruez 5y ago
    > I am not an accountant but presumably any material issuance of some sort of scrip that could be exchanged for goods would be seen as tax evasion. It's not. You just have to pay taxes on it.
    - ghaff 5y ago
      At which point, why would I want "fake" money that I could only spend in one place rather than real dollars? (That said, this does happen at a small scale with things like peer reward points and so forth but that's a fairly straightforward point->dollar exchange through things like gift cards.)
      - gruez 5y ago
        >At which point, why would I want "fake" money that I could only spend in one place rather than real dollars? You might want it because the company paying you "fake" money gives you more than the competitor that gives you legal tender. The company might also give you access to discounted goods/services, which makes each dollar of the "fake" money more valuable. There's another comment that goes to this in more detail: https://news.ycombinator.com/item?id=27948860 https://news.ycombinator.com/item?id=27948860
- ReptileMan 5y ago
  Assume that I give you on top of salary Amazon coupons for 1000$. No tax shenanigans. I (employer ) pay all needed taxes to be clean with IRS. This way I can guarantee quite a nice chunk of revenue for the whole foods store that is opened there. And I effectively subsidize it.
  - CydeWeys 5y ago
    Even better: Make it an employee discount of 50% off at Whole Foods for all Amazon employees, up to some monthly limit. If structured this way, would it even be taxable at all? I'm not aware of employee discounts being taxed.
    - bzbarsky 5y ago
      In the US tax handling of employee discounts at least on physical goods is as follows: if the discount brings the price paid below cost, then the below-cost subsidy is treated as income received by the employee. Concrete example: Company sells widgets for $12, of which $2 is profit. Then as long as the employee price is at least $10 there are no tax implications for the employees. If it were $9 they would owe tax on $1 per widget bought, etc. That said, some companies will pay the relevant taxes for you, or at least try to by guessing at your marginal rate...
      - taurath 5y ago
        I wonder how clearance items work with that.
        bzbarsky 5y ago
        That is a good question. I don't know offhand; it had not come up in the cases I was dealing with.
- burntoutfire 5y ago
  > isn't this mainly because paying in anything other then the national currency is illegal in most western nations? Which makes company towns illegal, hence Amazon is not creating company towns...
  - deleted 5y ago
    [deleted]
- DenisM 5y ago
  >isn't this mainly because paying in anything other then the national currency is illegal in most western nations? I can offer you 10 chickens to dig a trench, nothing illegal about that. You'd have to pay income tax tho, and the IRS does not accept (fractions of) chickens.
  - _delirium 5y ago
    As a one-off barter or contractor arrangement sure, but in the U.S., if you're paying anyone who'd be considered an employee, you have to pay at least minimum wage in cash or equivalent, except that you can deduct the cost of room and board if you provide it. Details: https://www.law.cornell.edu/cfr/text/29/531.27 https://www.law.cornell.edu/cfr/text/29/531.27
    - DenisM 5y ago
      Good point, I did not know that.
- deleted 5y ago
  [deleted]
- paulddraper 5y ago
  Regardless the cause, it would still make it not a company town, yes?
vmception 5y ago
Every time I pay an employee with a crypto we issued, I always chuckle that I get to pay in corporate scrip It's like "lol I read the wikipedia article about this!" anyway, great way to save costs, extend runway and get massive tax deductions at the same time. the best tax deductions are ones that don't require you spending your fiat dollars, so this is pretty high up there.

Itsdijital 5y ago

It's a band aid to bridge the gap between the insane demand in HCOL areas and the inability to find labor in those markets. How can you staff a warehouse for $15/hr in places were a studio starts at $1250/mo? I wouldn't be one bit surprised of Amazon starts getting into real estate, offering employees monthly "rent vouchers".

imbnwa 5y ago
Or just starts approximating to the future of "Sorry to Bother You" and just builds its own campus where you live and work.
ghaff 5y ago
Why wouldn't they just pay more? If they're giving you a rent voucher for an apartment whose market rate is $1250 a month, normally that would show up as income on your W2. https://www.thebalancesmb.com/when-is-employee-housing-taxable-to-the-employee-4158182 https://www.thebalancesmb.com/when-is-employee-housing-taxab... There are cases like remote locations where an employer can provide housing tax-free but likely not near an expensive city.
- scotty79 5y ago
  They might issue voucher nominally for $1250. But redeem it for $1000. So the landlords might decide if they want to not rent to Amazon employees or agree to take less from them but keep the high listing price for others.

steviedotboston 5y ago

Jacobin is not a publication worth taking seriously.