What Amazon HQ2 says about American inequality

More than a year ago, the leaders of scores of up-and-coming cities across America's Heartland entered Amazo...

Posted: Nov 15, 2018 4:56 AM
Updated: Nov 15, 2018 4:56 AM

More than a year ago, the leaders of scores of up-and-coming cities across America's Heartland entered Amazon's HQ2 contest, embracing the idea that the e-commerce giant might choose a mid-size city or metropolis in the Rust Belt, like Detroit or Columbus, for its second headquarters location.

Alas, we all should have known better. On Tuesday, Amazon officially announced its decision to split its award of 50,000 headquarters jobs — not to one up-and-coming city in the Midwest — but between Long Island City in Queens, New York and Crystal City, Virginia, just outside Washington, D.C. (The company also plans to create around 5,000 jobs in Nashville.)

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So much for the Rust Belt uplift story, one that might help knit a divided country together through mid-market, Midwestern economic development.

Which raises the real story here: Amazon's decision to invest heavily in two preexisting "superstar" cities perfectly epitomizes one of the most troubling aspects of digital economies: their strong tendency to concentrate people and investment in a very few well-educated, tech-rich hubs that have, in recent decades, continued to pull away from the rest of the country on basic measures of prosperity.

Scholars for years have suspected that tech might alter the hierarchy of cities. Economist Elisa Giannone recently found that beginning in the 1980s the wages of cities — after converging for generations — had begun to diverge as tech began to inordinately reward dense clusters of highly skilled workers and firms. Likewise, research at Brookings has shown that a short list of highly digital, often coastal, tech hubs are pulling farther away from the pack on measures of growth and income, concentrating more of the nation's tech activity and talent.

In short, the "digitalization of everything" is exacerbating the unevenness of America's economic landscape and making it increasingly likely that new tech headquarters go not to new places, but to the same places. What just happened proves the point.

This matters because the widening gap between "superstar" cities and the places left behind by economic transformation is creating a troubling panorama of untapped potential and frustration. On the one hand, the drift of scores of promising cities filled with talented people, outstanding institutions and underutilized infrastructure mean that America is not fully delivering on its promise for economic fulfillment. On the other hand, whole swaths of the country that have fallen behind in a changing economy are marked by political discontent that has contributed to the nation's populist backlash and widening social divides.

The nation as a whole will need to push back against today's widening regional gaps with specific, intentional action.

What might such action look like? For starters, it might begin by implementing policies that limit the kind of locational sweepstakes that impelled hundreds of places to ante up billions of collective dollars of business relocation subsidies in order to attract Amazon. One idea we endorse in a forthcoming paper is a 100% federal tax on every dollar in state and local tax incentives directed toward a specific company.

At the same time, local governments — ideally supported by Congress — should also take this moment to double down on focused initiatives that emphasize training workers with digital skills, while venture capitalists should ensure more local startups outside the coasts have access to the capital they need to grow. The federal government, for its part, should get serious about helping the Heartland and offer grants to 10 or so competitively selected, mid-sized business centers that show promise of emerging as regional "growth poles" that will ensure more people reside near top-quality jobs and opportunity.

To be sure, such an agenda would be an undeniably heavy lift for today's divided Congress. And yet, for all that, a growing chorus of policymakers and thought-leaders is increasingly calling for such action.

Indeed, even those who see the concentration of economic activity in cities like San Francisco, Boston and New York as a good thing for the national economy may soon find themselves calling for a more geographically balanced national economy. After all, concentrating economic growth in just a few prosperous cities works as a national growth stance only up to a point. Eventually, even today's winners will be left to grapple with the side effects, like traffic congestion and expensive housing, while others will continue to struggle with too little growth and hope.

Many hoped that Amazon would bring economic opportunity to the places left behind in the shift from a manufacturing economy to a tech economy. Now that it's clear that will not likely happen by itself, it is time for policymakers and concerned citizens to ensure that the current market forces don't deepen the economic and political divides between the places that have benefitted from the tech revolution and those it has left behind.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 512632

Reported Deaths: 10262
CountyCasesDeaths
Harrison34853555
DeSoto33162432
Hinds32556641
Jackson24830389
Rankin22442402
Lee16238242
Madison14874283
Jones14086247
Forrest13741259
Lauderdale12249324
Lowndes11286193
Lamar10644140
Pearl River9707244
Lafayette8827143
Hancock7835132
Washington7550169
Oktibbeha7204138
Monroe6989179
Pontotoc6970109
Warren6849178
Panola6746134
Neshoba6726210
Marshall6653141
Bolivar6440151
Union633897
Pike5924156
Alcorn5862107
Lincoln5525136
George510180
Prentiss500884
Tippah490282
Itawamba4829107
Scott477499
Adams4766125
Tate4748116
Leflore4723144
Copiah455895
Yazoo455591
Simpson4543117
Wayne442772
Covington432895
Sunflower4299106
Marion4265112
Coahoma4227109
Leake413790
Newton395581
Tishomingo381793
Grenada3775109
Stone365666
Jasper340166
Attala337790
Winston317792
Chickasaw313367
Clay311878
Clarke301195
Calhoun284449
Holmes271289
Smith268952
Yalobusha243747
Tallahatchie231453
Greene224749
Walthall221366
Lawrence217840
Perry213356
Amite209557
Webster205148
Noxubee188642
Montgomery181557
Carroll174441
Jefferson Davis173643
Tunica163239
Benton152639
Kemper144941
Choctaw136527
Claiborne134238
Humphreys131139
Franklin124929
Quitman107528
Wilkinson105939
Jefferson96834
Sharkey65121
Issaquena1957
Unassigned00

Alabama Coronavirus Cases

Cases: 845108

Reported Deaths: 16115
CountyCasesDeaths
Jefferson1161242006
Mobile741961379
Madison53291732
Shelby38328368
Baldwin38074589
Tuscaloosa36017641
Montgomery34483781
Lee25557263
Calhoun22585518
Morgan22454406
Etowah20016517
Marshall18781316
Houston17729425
St. Clair16880358
Limestone16138218
Cullman16050303
Elmore15904294
Lauderdale14984306
Talladega14191299
DeKalb12971269
Walker12029380
Blount10715192
Autauga10517157
Jackson10161194
Coffee9415192
Colbert9341208
Dale9018191
Tallapoosa7255201
Russell707865
Chilton7018170
Escambia6955143
Covington6933195
Franklin6342108
Chambers5784142
Marion5403130
Dallas5285209
Pike5118109
Clarke484986
Lawrence4826129
Winston4780110
Geneva4642136
Bibb434094
Barbour369480
Butler3434100
Marengo342393
Monroe337066
Randolph334367
Pickens333188
Fayette330085
Henry320666
Hale318389
Cherokee317763
Crenshaw260477
Washington257052
Cleburne254460
Lamar251453
Clay250869
Macon244764
Conecuh192862
Coosa185047
Lowndes178168
Wilcox177438
Bullock152645
Perry141840
Sumter139241
Greene130245
Choctaw93228
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