By Robert B. Engel
Amazon’s Prime Day is often lauded as offering some of the best deals of the year in online shopping, but a closer look at the stream of corporate welfare that has helped fuel the rapid growth of Amazon’s flagship subscription service reveals that Prime is a raw deal for consumers and taxpayers alike.
New York lawmakers, who have already given up enough taxpayer dollars to the tech giant, must think long and hard before giving another penny to the third-richest company in the world.
Analysts say the true value of the Prime package, which includes music and video streaming and, of course, expedited shipping service, is more than $780 per year. But members still only pay $119 for their Prime subscription. This seemingly unbeatable deal for consumers only begins to make sense in light of the fact that Amazon has built its business model with a big assist from government handouts. In fact, Amazon has received more than $23 million in subsidies from New York taxpayers since 2000.
From 2000 to 2017, Amazon spent at least $9.8 million on state lobbying – over $750,000 in New York alone – while making more than $6 million in campaign contributions. Amazon’s own reports say it spent almost $14 million on state and local “government relations efforts” between 2013 and 2017.
Meanwhile, local communities and small businesses have borne the cost of Amazon’s strong-arm tactics. Taxpayers have lost out on more than $700 million in sales tax revenue, money that could have been used to ease crowding in schools, modernize crumbling infrastructure, or expand access to health-care services.
Amazon’s refusal to pay its fair share has decimated good-paying jobs and small businesses, who are forced to try to compete with the tech behemoth. Amazon often promises economic development and new jobs at its warehouses and fulfillment centers in return for taxpayer assistance. But the company pays its employees an average salary of less than $29,000 annually.
Amazon continues to fish for unprecedented amounts of corporate welfare from New York for its second headquarters, often called HQ2. But as state and city public officials weigh their priorities, Prime Day should serve as a resounding wake-up call. Taxpayers are tired of giving up their money to the third-richest company in the world, helping to subsidize Amazon Prime. Last year, Amazon reported $177 billion in revenue, more than enough to build a second headquarters on their own dime.
The moment has come for principled New York lawmakers to stand up to Amazon and their lobbyists, prioritize our local communities and finally say enough is enough.
Robert B. Engel is a trustee at Niagara University and is chief spokesman for the Free & Fair Markets Initiative, a nonprofit coalition focused on supporting a modern and fair marketplace that serves small businesses, local communities and everyday Americans.