A new study showed that tax subsidies granted to Amazon by local governments in Florida have provided little to no economic benefit for their communities. The study analyzed 20 years of data from 134 localities nationwide and was conducted by economists from the University of Wisconsin-Whitewater and the Jack Kemp Foundation.
According to data from the advocacy group Good Jobs First, local governments in Florida have granted Amazon more than $43 million worth of tax subsidies over the past two decades.
The report found that Amazon only created 23 jobs for every $1 million in subsidies. This is only 12% of the jobs Amazon and its proponents have claimed to create, according to economist Ike Brannon, senior fellow at the Jack Kemp Foundation and co-author of the study.
“Subsidies designed to attract Amazon to communities in Florida created far fewer jobs than promised and at a very high cost per job,” Brannon said. “Local taxpayers are effectively paying the wages of Amazon workers in the first year and more, with little to show for it.”
According to the study, governments spend about $44,000 for each job created due to a new Amazon fulfillment center, which is almost 40% higher than the average wage for an employee at an amazon facility.
Talent.com reports that the average salary for an Amazon warehouse worker in the US is about $32,000 annually.
Additionally, the report also found that "Amazon does not create jobs beyond its own company, and in many situations it effectively crowds out jobs elsewhere." It concludes that the subsidies have accomplished relatively little, and that rather than continue to provide direct subsidies to certain companies, they should instead pursue job growth by "improving the business and social environment of their community."
According to Good Jobs First, Florida's largest subsidies came from Duval County ($18 million), Miami-Dade ($6.8 million), Polk County ($4.5 million), Volusia County ($4 million), Leon County ($2.5 million) and Deltona ($2.5 million).
According to Brannon, most new Amazon facilities are located in communities where unemployment is already low, as Amazon tends to build new warehouses and distribution centers in areas with strong economic conditions and demand for their products. The subsidy simply shifts jobs from other employers to Amazon, exacerbating the already tight labor market and causing local businesses to lose employees, Brannon argues.