Amazon planning second headquarters with 50,000 jobs

[Azure]

50,000 people x $100,000 per year medium income for the work they do is $5 billion in payroll per year.

At a 30% income tax rate alone, you are looking at $1.5 billion at potential tax revenue. I know a lot of these people that Amazon will hire are already employed somewhere in Canada, so lets say you create 25,000 new net jobs. That is $750 million per year in income tax. Now start figuring GST, property tax, payroll tax, corporate tax rates, and then start figuring in some of the charity and community work that companies like Amazon promote in the cities where they have a massive workforce.

When you start adding all of them together I don't see how a $7 billion dollar deal is bad. Hell, I haven't even figured in the construction jobs created by building their headquarters and all the tax revenue around that.

[iggy_oi]

Originally Posted by Azure

50,000 people x $100,000 per year medium income for the work they do is $5 billion in payroll per year.

At a 30% income tax rate alone, you are looking at $1.5 billion at potential tax revenue. I know a lot of these people that Amazon will hire are already employed somewhere in Canada, so lets say you create 25,000 new net jobs. That is $750 million per year in income tax. Now start figuring GST, property tax, payroll tax, corporate tax rates, and then start figuring in some of the charity and community work that companies like Amazon promote in the cities where they have a massive workforce.

When you start adding all of them together I don't see how a $7 billion dollar deal is bad. Hell, I haven't even figured in the construction jobs created by building their headquarters and all the tax revenue around that.

I think your average salary estimates are very high for a company like amazon but more importantly I think you’re ignoring the fact that a big chunk of the tax revenue generated by amazon employees will go to the infrastructure improvement and maintenance costs associated with adding 50K people to the city. Meanwhile amazon will get to stay here tax and rent free while making a profit off the operation that would need to be big enough to justify employing and paying the salaries of 50k people.

Keep in mind too, it’s very easy for amazon to promise X amount of jobs in an effort to get multiple cities falling over themselves to offer tax breaks and other incentives(upfront) knowing full well that in the event they fall short on their promise there would be very little that a city could do about it retroactively.

[PepsiFree]

Originally Posted by Lubicon

Austin is home to Dell (HP?) and has a healthy hi tech economy. Amazon would be competing for talent and thus wages would be driven higher. Just like what happens here every time the energy industry goes through a large hiring cycle.

This is actually a good point that might not be a big factor but is one Amazon will definitely consider. There is a very real tech shortage in the US, not because there’s is a lack of qualified people, but because certain (big) markets are very saturated with big companies. Available jobs often outnumbers available talent.

Now, Amazon would easily attract talent, but there is value in being an untapped market for it. Even if Amazon doesn’t come here, this could easily put our name in the heads of a lot of medium-sized companies that are forced to look elsewhere to fill positions, a move here might make sense.

Being a big market has advantages, but being a small untapped market has incredible advantages as well.

[MarchHare]

Originally Posted by iggy_oi

I think your average salary estimates are very high for a company like amazon

Amazon themselves said the average salary for an employee at HQ2 would be $100,000. The people working there aren't going to be low-level warehouse workers...they'll be engineers, programmers, finance, HR, IT, managers, executives, etc.

[Northendzone]

I suppose the winning city will likely gain indirectly from housing prices increasing due to demand

[CliffFletcher]

Originally Posted by Azure

50,000 people x $100,000 per year medium income for the work they do is $5 billion in payroll per year.

The 50,000 number is hugely inflated. It's based on projections of the company continuing to grow at its current rate for decades, and it's the max 'eventual' number - which could be in 25 years. Amazon is also at the forefront of workplace automation, and much of its current work will not be performed by people in 15-20 years. Clearly it's in Amazon's interest to inflate the number as large as possible to win maximum concessions from government. I'd be surprised if the new campus employs 15,000 within 10 years.

Finally, not all of those workers will be well paid. Amazon pays its warehouse workers about $12 an hour. I know the new facility will not be a distribution centre, but like any big employer Amazon has a lot of low-echelon staff, and they pay them rock-bottom wages.

Originally Posted by MarchHare

Amazon themselves said the average salary for an employee at HQ2 would be $100,000. The people working there aren't going to be low-level warehouse workers...they'll be engineers, programmers, finance, HR, IT, managers, executives, etc.

Well, if Amazon says... I mean what possible incentive could they have to inflate that number?

[MarchHare]

Originally Posted by CliffFletcher

Well, if Amazon says... I mean what possible incentive could they have to inflate that number?

Again, these are head office jobs for a large technology company. Amazon isn't going through this RFP process just to find the location for their next warehouse or distribution centre. The people employed at HQ2 will be educated white collar types. The $100,000 average salary seems completely reasonable to me.

[iggy_oi]

Originally Posted by MarchHare

Amazon themselves said the average salary for an employee at HQ2 would be $100,000. The people working there aren't going to be low-level warehouse workers...they'll be engineers, programmers, finance, HR, IT, managers, executives, etc.

Those jobs will be high salary for sure. Most operations of that size require a large number of clerical(secretaries, bookkeepers, data processesors, receptionists etc)and cleaning/maintenance positions which IMO would make the hypothetical actual average salary fall short of what amazon are pitching to cities.

[octothorp]

I wonder if they'd look at the O&G sector and it's inevitable decline over the next 50 years as a pretty-much constant source of labour to recruit from (in terms of IT, finance, support staff and other jobs that are tranferrable between the two). They can probably offer far more job security than those energy companies can and would have a massive advantage in headhunting (compared to recruiting from other industries with equal job security).

[Lanny_McDonald]

Originally Posted by Northendzone

I suppose the winning city will likely gain indirectly from housing prices increasing due to demand

The winning city will also have to deal with the influx of people and the stress it puts on infrastructure. Depending on the pace of growth, it could force the city to spend vast amounts of capital improve the infrastructure to the location of the campus. Lots of moving pieces that each competitor should consider. It obviously scared off some, like San Antonio.

[Weitz]

I like their little caveat that the $100,000 average salary is subject to where they actually decide to make their HQ2. So, probably paying market rates for similar jobs.

[Strange Brew]

Originally Posted by Azure

Problem with Austin is all the talent. Amazon will have to pay top dollar to acquire it.

Originally Posted by Azure

Acquiring top end talent in a city like Toronto or Calgary would be a lot cheaper than getting it in a city like Austin.

CDN dollar is one thing, but Austin is already a tech city, with a lot of tech firms. Amazon is going to need to poach some of those people and they will have to pay to do so.

In a city like Calgary there are a lot of people with an engineering/tech background who are looking for employment, and with a little work Amazon could work with local schools to offer more programs focused around staffing their headquarters.

In Toronto they would have a bigger pool to choose from, and wouldn't need to pay the bigger salaries compared to the States.

From a simple cost perspective, Austin would be a lot more expensive.

I thought you were saying the fact that Austin had access to so much human capital would increase the cost. Some kind of reverse demand and supply logic.

Austin is not the cheapest city in which to live, but nor is it the most expensive. I'm not aware of Austin wages being exorbitant. I think a lot of Texans want to live there, but there aren't many corporate jobs available. It is a big college and government town though.

Tech companies have shown they are more interested in accessing talent than in moving to low cost areas. That's why Silicon Valley exists and is one of the most expensive places to live in North America.

The close proximity of so many major schools (UT, A&M, Baylor etc.) is a real advantage for Austin IMO.

[speede5]

50,000 $100K per year jobs?

You really believe that? Like really? That number is just too good to be true.

If a Canadian city wins and this is true I'll eat crow and moving to the winning city.

[CliffFletcher]

Originally Posted by Strange Brew

Tech companies have shown they are more interested in accessing talent than in moving to low cost areas. That's why Silicon Valley exists and is one of the most expensive places to live in North America.

The close proximity of so many major schools (UT, A&M, Baylor etc.) is a real advantage for Austin IMO.

One of the criteria for their new HQ is "near a top school." I'm assuming that means "top 30" rather than "top 300." Which means Austin has a good shot, and Canadian cities probably not.

And let's not forget the political strategy. Amazon is in the cross-hairs of American legislators ver anti-trust laws. There will be battles in Washington over the coming years. It will be a big asset for Amazon to have a bunch of senators and members of congress in their pocket. Putting the HQ in the U.S. does that. Putting it in Canada doesn't.

[Northendzone]

Originally Posted by speede5

If a Canadian city wins and this is true I'll eat crow and moving to the winning city.

get ready to call the moving company and.......tell them you will have no need for their service.

I can't see amazon being able to justify dropping that many jobs in a city outside of their largest market - the USA.

I am sure the $100k earnings number is correct, I just be curious to know if it includes indirect compensation as well.

I will also be interested to see how many people HQ2 requires on the day it opens which could be 3 or so years from the time the winner is announced - as presumably the office and infrastructure would need to be built and then of course there is the question of when does it get to 50,000 ee's.

[Azure]

Originally Posted by speede5

50,000 $100K per year jobs?

You really believe that? Like really? That number is just too good to be true.

If a Canadian city wins and this is true I'll eat crow and moving to the winning city.

The $100k salary is very reasonable. The 50k jobs is something we could look at over a 20-30 year cycle.

Now we have to start asking ourselves how long of an investment should this be? 10 years? 20 years? 30years? From a public perspective if you can create this many jobs and have a net payoff in 20 years, why is it a bad deal?

Of course I don't believe it to be net pay off in 20 years. I think any city that gets HQ2 is going to reap massive benefits. Seattle is doing great right now even if people love to whine about that Amazon has changed this or made this more expensive.

[Ozy_Flame]

Outside of warehouse work, there is little doubt many white collar jobs with Amazon are over $100k/year. Even have a cursory look at the Indeed website for Amazon Canada roles, most are over $100k (at least the ones listed).

Sounds like the work culture is ruthless and tiring though.

[Weitz]

Originally Posted by speede5

50,000 $100K per year jobs?

You really believe that? Like really? That number is just too good to be true.

If a Canadian city wins and this is true I'll eat crow and moving to the winning city.

They make the caveat that they will "market rates'' based on what city wins. So they would likely pay the going rate for IT in Calgary, and support services and what not. Even if they don't pay as much as they claim it can never hurt gaining that many jobs over 15-25 years.

[Hack&Lube]

Originally Posted by Ozy_Flame

Outside of warehouse work, there is little doubt many white collar jobs with Amazon are over $100k/year. Even have a cursory look at the Indeed website for Amazon Canada roles, most are over $100k (at least the ones listed).

Sounds like the work culture is ruthless and tiring though.

Yes, I've heard the corporate work culture at Amazon is a machine that will grind you and grind you as Amazon experiments with how to get more out of its workers. Count me out as wanting to work there.

https://www.nytimes.com/2015/08/16/t...workplace.html

Originally Posted by NYTimes

At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others. (The tool offers sample texts, including this: “I felt concerned about his inflexibility and openly complaining about minor tasks.”)


(...)

enduring image was watching people weep in the office, a sight other workers described as well. “You walk out of a conference room and you’ll see a grown man covering his face,” he said. “Nearly every person I worked with, I saw cry at their desk.”

[Azure]

Well if you are going to take over the world you need to get the most out of people....