An attempt by the U.S. authorities to tax big businesses has brought to unlikely foes together – Amazon and organized labor in Seattle.
Some leaders in Seattle have expressed their desire to charge large employers for every employee of them working in Seattle keeping in mind the housing crisis being faced in America’s prosperous cities.
Amazon has bene forced to stop a construction of one of its office towers and relocate 7000 employees outside of Seattle because of the proposed “head tax” despite it being the largest private sector employer in the city and behind the real estate boom in Seattle.
The measure was opposed by union construction workers who fear that there would be a slump in Seattle building market if Amazon forsakes the city.
Corporate titans have been identified as the easy villains by the leaders in Seattle as have some others in other left-leaning cities.
In 2014, a $15-an-hour minimum wage push saw most of the fast-food chains including McDonald’s, facing the music from the politicians. The minimum wage was passed subsequently. And a campaign for imposition of sweetened beverages tax in 2016 similarly targeted Pepsi and Coca-Cola. Seattle based Starbucks was however given a break from the tax.
No such break was given to Amazon from the head tax that was put forward at the city council this spring.
T5he council has reportedly identified 500 businesses for imposition of head tax which is aimed only at the largest for-profit employers in Seattle. According to estimates, about $75m could be generate din funds for affordable housing and homeless services for the city if the proposal is enacted.
However, the mayor of the city Jenny Durkan has said that the $500-per-employee tax which has bene drafted by the council, “hurts workers”. “I cannot support it,” said Durkan, who had said that that $250-a-worker charge would be more justified.
In the last decade, the real estate prices and rents have significantly risen in Seattle in the last decade and the money generated form funds would be pout to use to address that housing crisis within the city limits. People are struggling to pay their rents despite a 27% increase in household income between 2012 and 2017 in the city.
“We have a public health crisis. People are sleeping outside every day,” council member Teresa Mosqueda said on Friday. “Frankly, people are dying in our streets.”
Announcement of stopping construction on Block 18, a 405,000 sq ft office building of Amazon was made by the company on 2 May because of the fight on the tax. It is also reportedly reconsidering the lease on another downtown tower.
“Pending the outcome of the head tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sub-lease all space in our recently leased Rainier Square building,” Amazon vice-president Drew Herdener told the media.
The Amazon driven real estate boom in the city could be stifled because of the tax and would be a blow of the construction industry in the city which is now considered to be the create capital of the country since July 2016, said Monty Anderson, executive secretary of the Seattle Building & Construction Trades Council.
“The ability of us to work is based on companies wanting to come here and build. That’s just a fact for us,” said Anderson, who leads a collection of trade unions representing 10,500 workers.
“In ’08 and ’09, when the economy tanked and my members were homeless, drug addicted, committing suicide, it was a tragedy … Now people are building here, and we’re seeing an uptick of our membership into the middle class. Don’t take that away from us.”
(Adapted from TheGuardian.com)