A new report by EPI economist Ben Zipperer and economic analyst Janelle Jones finds that Amazon fulfillment centers do not boost overall employment in the counties where they open—undermining the case for providing large tax breaks and incentives to lure Amazon facilities to a particular place.
Analyzing data for counties in 25 states containing Amazon fulfillment centers, the authors find that within two years, the opening of an Amazon fulfillment center leads to a 30 percent increase in warehouse and storage employment in the surrounding county. However, this does not lead to an increase in overall employment in the county—and in some cases, the data even suggest reductions in overall employment.
“Amazon has received over $1 billion in state and local subsidies to open its fulfillment centers at taxpayers’ expense—but does not increase overall employment in the county,” said Zipperer. “If policymakers instead invested in public services—particularly in early-childhood education and infrastructure—that would be a much stronger recipe for long-term economic development, rather than giving tax breaks to national employers like Amazon.”
The authors speculate that jobs created in warehousing and the storage sectors are offset by job losses in other industries, or that the employment growth generated by Amazon is simply too small to be meaningfully detected in the data.
This does therefore mean that closing a factory – due to, say, increased trade – doesn’t lower the number of jobs in a county either.
Which is a bit of a killer for just about every complaint the EPI ha about trade really.