Tech has a reputation as a progressive industry, but this week Amazon.com Inc. betrayed that reputation in a big way.
The Seattle-based giant has famously opposed a payroll tax approved Monday by its hometown’s city council that will tax companies making more than $20 million USD annually a whopping 14 cents per hour, per employee, to help fund a housing program for the city’s homeless.
The city, which lowered the payroll tax from a proposed 26 cents per hour to 14 after Amazon protested by temporarily halting a downtown construction project, expects to raise about $48 million annually from the tax, which will fund services and affordable housing for the city’s approximately 8,000 homeless residents.
Amazon, of course, has framed its opposition in business terms, with a May 14 statement credited to vice president Drew Herdener saying that with Amazon’s support, Seattle’s revenue rose from $2.8 billion USD in 2010 to $4.2 billion in 2017, and is expected to further grow in 2018.
“This revenue increase far outpaces the Seattle population increase over the same time period,” he wrote. “The city does not have a revenue problem – it has a spending efficiency problem.”
Nor is Amazon alone in its opposition to the tax – coffee chain Starbucks, which also got its start in Seattle, said the city “continues to spend without reforming and fail without accountability.”
(Starbucks’ statement admittedly has a more progressive veneer than Amazon’s, condemning Seattle’s city council for “ignoring the plight of hundreds of children sleeping outside” and saying that “if they cannot provide a warm meal and safe bed to a five-year-old child, no one believes they will be able to make housing affordable or address opiate addiction.”)
But there’s a business case to be made for Seattle’s proposal too, one that’s proven successful in several Canadian cities and which their American counterparts have been slow to adopt.
Caring for the homeless is expensive. Seattle alone spent $53 million USD on its homeless population last year, but this is a Canadian website, so let’s cite some numbers closer to home to illustrate the benefits of what it’s proposing.
In Canada, the average annual cost to care for a homeless person was $53,144 in 2017, according to a study from the At Home Chez Soi (AHCS) project, which measured the effectiveness of housing-first strategies in Vancouver, Winnipeg, Toronto, Montreal, and Moncton, New Brunswick.
By contrast, housing first strategies, which involve housing the homeless before matching them with available services, cost an average of $22,257 per person annually for so-called “high-need” homeless, and $14,177 per year for those with more moderate needs.
In fact, the AHCS study found that every $10 invested in housing-first services reduced the service costs for high-need homeless by $9.60 on average, and for moderate-need homeless by an average of $3.42.
Those types of numbers might surprise some readers – they surprised me when I first read about them – but as University of Winnipeg professor and AHCS member Jino Distaso put it in a CBC column about his organization’s study, they make intuitive sense: people without a home, who often suffer from mental illness and addiction, heavily draw from social services including shelters, agencies, and hospitals, in addition to interacting more frequently with emergency services.
Giving them permanent, affordable shelter – a recognized component of the updated national housing strategy – reduces their dependency on services such as shelters, not to mention the likelihood of an altercation with the police or an emergency that requires an ambulance.
Back to Seattle: that $48 million USD, which the city plans to collect annually for five years (that’s right – it has an expiration date), will be used to fund 591 affordable housing units outright, support another 302, subsidize rents for 250 basic and enhanced shelter beds, and fund services to collect 570,000 pounds of garbage.
It won’t get every one of the city’s 8,000 homeless off the streets – but it’s a start.
Granted, I don’t have access to audits for the City of Seattle’s civic budgets between 2010 and 2017, though I do remember visiting the city last year and finding it far more run-down than I expected; it certainly didn’t look like the economic engine that powered three (Microsoft, technically headquartered in a Seattle suburb, hasn’t said anything about the tax) of the U.S.’s most high-profile corporations.
Maybe Amazon and Starbucks are right and the money they’ve already paid Seattle could have been better allocated.
But – and I think this should matter to companies concerned enough about their reputations to close more than 8,000 stores for sensitivity training in response to a racism-fuelled incident and
fire accept the resignation of a high-ranking executive accused of sexual harrassment – I have a much easier time believing they don’t want to contribute to their city’s well-being.
Amazon, after all, has long had a reputation for bullying suppliers to lower its prices, thereby increasing profits, and the publishers who began the cry have since been joined by other industries as the e-commerce and cloud storage giant worms its way into sectors such as entertainment, food, and healthcare – heck, it essentially started punishing Seattle for its tax policies last year when it launched its much-publicized search for a second headquarters.
The company’s May 14 statement, in which Herdener wrote that “we remain very apprehensive about the future created by the council’s hostile approach and rhetoric towards larger businesses,” just added fuel to an already existing fire.
And note the phrase “larger businesses.” The tax, which adds up to about $275 USD per employee, explicitly applies only to companies that can afford it.
I don’t work for Amazon, so I doubt my words will have the impact I wish they did. But if I were an employee, I’d quote founder Jeff Bezos’ request to report situations that exhibit a lack of empathy to him at [email protected], and tell him I’m apprehensive about the future created by his company’s hostile approach and rhetoric to some of the most marginalized residents of its community.