Needless To Say, Louisiana Didn’t Place Any Cities On Amazon’s HQ2 Short List

The Wall Street Journal had Amazon’s HQ2 short list yesterday, and interestingly it isn’t really all that short.

It was, of course, plenty short enough to exclude the Sportsman’s Paradise

– Atlanta
– Austin, Texas
– Boston
– Chicago
– Columbus, Ohio
– Dallas
– Denver
– Indianapolis
– Los Angeles
– Miami
– Montgomery County, Md.
– Nashville
– Newark, N.J.
– New York City
– Northern Virginia
– Philadelphia
– Pittsburgh
– Raleigh, N.C.
– Toronto
– Washington D.C.

When Newark makes the list and New Orleans and Baton Rouge don’t it’s a good indication we’re doing it wrong.

Now, it should be said – and we’ve said it – that Amazon is looking pretty obviously for NFL-scale corporate welfare in the siting of this new second headquarters, and there is a tremendous amount of moral hazard involved in playing along on the part of myopic politicians who get suckered into Jeff Bezos’ game. After all, in most cities of size there are companies who are competitors, either directly or indirectly, with some aspect of Amazon’s operations – and virtually every company in those markets would be competing with Amazon for employees. So if they dropped into a New Orleans, for example, and began hiring their 50,000 employees they’re advertising they’ll be hiring to staff HQ2, they would instantly create a giant labor shortage. That would abate over time, as people would move in to the city, but the upward pressure on wages that labor shortage would create would likely be permanent.

So if you’re an incumbent business in one of these cities and Amazon plops down in the neighborhood and starts raiding your employee roster, you’re going to have to give out raises to keep your people and your new hires will either be the folks Amazon doesn’t want or you’ll have to meet their pay scale in lots of cases – even if your business is totally different than Amazon’s, as office workers do relatively similar jobs across lots of industries.

It’s fairly obnoxious to those incumbent businesses to make them pay high taxes to support hundreds of millions or even billions of dollars in incentives to bring that competitor into the market.

Obviously there are economic benefits to having an employer of that size in your city, so we’re not going to say this is a uniformly bad thing. It’s a mixed bag, though, and it’s going to be a fairly obvious example of how politicians spending other people’s money will show a complete lack of discipline in throwing it at a whale.

That’ll show up as the short list becomes shorter. For us here in Louisiana it’s a pretty good indication of how poorly we rate in terms of economic competitiveness – and that’s an indication which, coming on the heels of the state being snubbed in favor of Alabama by Toyota and in advance of Monday’s announcement of John Bel Edwards’ doom-and-gloom state budget, ought to be paid attention to.

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