Amazon released a list of 20 contenders for the home of its second headquarters on Jan. 19. One of the cities was Indianapolis. This announcement was met with praise from some Indiana officials.
Gov. Eric Holcomb tweeted, “We are thrilled to see Indianapolis on the list of finalists for Amazon’s second headquarters. It speaks to Indiana’s growing reputation on the world stage as a great state to locate and grow a business”
Some public officials may be overjoyed by Indianapolis’s position on this list, but the Editorial Board believes that while there are pros to having Amazon located in Indianapolis, there will also be negative consequences.
For one, Amazon claims that headquarters would roughly bring $5 billion dollars in construction fees to Indianapolis, as well as creating 50,000 jobs. This money and these jobs could bring tax revenue to the state.
Other than increased tax revenue, Amazon could provide high-paying jobs for educated workers. And Indiana needs all the help it can get with that. BioCrossroads, a business development company that focuses on life sciences, reported that Indiana was suffering a brain drain of young educated people trained in science, engineering, and information technology.
Having the Amazon headquarters in Indianapolis could provide IU and Purdue University graduates jobs. This would give the graduates a reason to stay in the state, and could counteract the brain drain problem, where younger, educated individuals leave the state for opportunities elsewhere.
However, while the Amazon headquarters may be good from a jobs point of view, there are some negative consequences for having the headquarters based in Indianapolis.
There is also concerns the influx of jobs to Indianapolis will have an effect on housing. Andres Carbacho-Burgos, a housing economist at Moody's Analytics, said to realtor.com moving the headquarters to any city center or downtown area could cause rent to skyrocket. However, this may be remedied by moving to one of the suburban areas of Indianapolis.
The effect of housing can already be seen in Seattle, home of Amazon's first headquarters. The Seattle housing market is one of the most expensive in the country. Rent in the city and the surrounding suburbs has almost doubled since the 1990s. Because Microsoft and Google also have campuses in the Seattle area, the housing crisis is not necessarily due to Amazon. However, it is a contributing factor that must be taken in consideration.
James Thomson, former head of Amazon Services, told the Toronto Star there are downsides to housing the new headquarters. “The expense is a trade-off against schools, infrastructure, health care”.
Additionally, Amazon has suffered from allegations of workers being treated poorly. In Germany and Italy, Amazon workers went on strikes because of the demanding worker conditions. And though Thomson says the majority of these problems occurred at the warehouse level, he does admit Amazon is a challenging place to work. This does not mean workers will be mistreated, but does call into question whether these jobs provide good work-life balance.
Amazon will provide Indianapolis with many opportunities. It could stop the brain drain and have a strong economic effect on the state. However, the downsides of the headquarters moving to Indianapolis must be considered.
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