Amazon’s New Headquarters
Liza Sjoberg
Amazon recently announced that they were looking to expand their company by adding a second headquarters in North America. By doing this they are estimating an addition of 50,000 jobs and an ultimate net worth of $5.5 billion (Palmer). Cities across North America are placing their bids and trying to bring the headquarters near them. They want this because it will definitely increase employment and create jobs for many individuals in their city. While there are mostly benefits for the city by bringing the new Amazon headquarters to them, some Seattle residents (where the only headquarters are now) do make it know that there are negative impacts to it. Despite any negatives, however, 50,000 jobs is an extremely large number of employment and therefore this will outweigh many other options.
Scarcity of land will definitely impact the future of the Amazon headquarters. Although Amazon desires a metro location, they will have to find a city where there is space to build. Many cities are already very populated and built on top of each other and since Amazon desires 50,000 extra jobs, there needs to be a place in which their headquarters are easily accessible to these individuals. When making their decision they will encounter many trade-offs as they will find perhaps in one city the space to build, however they may have poor transportation alternatives which could defer a labor force for the company. They will have to evaluate the gravity of the opportunity cost of each option to determine where the best location will be. This video actually explains the benefits certain cities have, however this also showcases the opportunity costs for the selected cities that we can infer based off the difference in benefits for each.
Despite the large investment, Amazon realizes that by establishing a new headquarters growth will increase. Their company will be responsible for the 50,000 added jobs in our country. Amazon estimates that the average wage for workers at the new headquarters will be $100,000 so these would greatly increase the economy of a city. With more workers who are being paid substantial amounts, they are bound to increase their sales and efficiency as a company overall. Amazon wants to continue to increase technology and propose innovative ideas all the while increasing the success of the Amazon company. As seen in the chart below Amazon revenue has skyrocketed in the previous years and is continuing to grow showing the that with the new headquarters this will simply be a helpful aid among their growth.
While many news sites try to predict which city Amazon will choose--ranging from Denver to Washington D.C. to Atlanta--no one truly knows what Amazon will decide. CEO, Jeff Bezos will have to weigh the options according to his own standards to identify the future of the headquarters. The decision will likely take some time as cities across the US continue to bid for the new headquarters, each explaining why their city would be the best option. It is however said “some locations make more sense than others” (McFarland). The opportunities for the company are endless, but so are the options for locations for the new headquarters. Wherever this new investment takes place, however, will bring growth to the company no matter the location.
The negatives however do exist to the situation. Wherever Amazon decides to establish themselves, the local businesses will likely suffer. Additionally for other residents of the city that are not employed by Amazon will most likely face increases in cost of living such as increase in house costs as well as more traffic throughout the city (Lutz). Despite these negative impacts, overall the city will become wealthier and have a greater employment rate. The benefits outweigh the negative impacts and this explains why cities across North America are placing their bids.
Works Cited
cnbc. “Here Are The Cities That Match Amazon's Wish List For Its Second Headquarters | CNBC.” YouTube, YouTube, 8 Sept. 2017, www.youtube.com/watch?v=HuNb4wSmiZI. Accessed 24 Sept. 2017.
Lutz, Ashley. “Cities are in a vicious, $5 billion battle over Amazon's headquarters - here's why they're crazy.” Business Insider, Business Insider, 13 Sept. 2017, www.businessinsider.com/amazon-headquarters-battle-2017-9. Accessed 24 Sept. 2017.
McFarland, Matt. “8 cities fit for Amazon's second headquarters.” CNN, 11 Sept. 2017, www.npr.org/sections/alltechconsidered/2017/09/18/551773552/cities-try-convincing-amazon-they-re-ready-for-its-new-headquarters. Accessed 24 Sept. 2017.
Palmer, Annie. “Why Amazon Is Building a Second Headquarters Worth $5.5 Billion.” TheStreet, TheStreet, 10 Sept. 2017, www.thestreet.com/story/14297542/1/why-amazon-is-building-a-second-u-s-headquarters-worth-5-5-billion.html. Accessed 24 Sept. 2017.
Tulsa, Mayors from Toronto to. “8 cities fit for Amazon's second headquarters.” CNNMoney, Cable News Network, 11 Sept. 2017, money.cnn.com/2017/09/11/technology/amazon-cities/index.html. Accessed 24 Sept. 2017.
I enjoyed reading about this topic because I feel like Amazon is used a lot in our generation and becoming more popular in general. They are becoming known for their high level technology and their large facilities. I think that it is a good idea for Amazon to build a new headquarters because the amount of jobs that it will bring overweigh the negatives. Amazon has already proven that they can provide thousands of jobs and the factories that they have already built have been proven useful. You gave a lot of good information about the pros and cons to the situation, but not a lot of background information that might have been helpful. I haven’t heard about Amazon building a new headquarters, so it was very interesting to read.
ReplyDeleteWhile I knew that Amazon was seeking to establish another headquarter, I didn’t take the affects it would have on local businesses into account. It would heavily decrease the economic status of the other smaller and local businesses of any state. Therefore, I believe that it is important for whichever state Amazon chooses to build in, to consider whether or not they want locals to succeed. This decision would cause a lot of controversy within that state and definitely anger residents with businesses. Seeing as how Amazon largely supplies goods to U.S. consumers, local businesses would suffer with the loss of desires for their goods. While I do understand that Amazon, itself, will be bringing in various positions, how willing would the locals be to join Amazon. Overall, I believe that it was an interesting topic, I just feel that there would need to be a lot of decisions that would need to be reviewed before Amazon settles down.
ReplyDeleteGreat topic Liza! The $5 billion bidding war that Amazon has triggered to find the perfect city for their new headquarters is causing a lot of competition across the U.S. It's likely that Amazon will select a city with at least one million people, an international airport, and a stable and business-friendly environment so they can continue to grow and raise their employment rate, like you mentioned. As cities continue to offer incentives to Amazon and plan to submit formal proposals to the company, Amazon must evaluate the opportunity-costs for each location in order to ensure maximum production. Promising to include as many as 50,000 high-paying jobs, smaller companies and private businesses must work hard to maintain their clientele... not everyone can win from Amazon's huge investment.
ReplyDeleteThis topic is very interesting, as it involves people from around the US, all waging on the creation of one building. I completely agree that despite the city the headquarters is placed in, the positives will definitely outweigh the negatives. After, all, 50,000 new job opportunities is huge for a US city. However, the increased cost of living for nearby citizens and traffic issues would be an extreme daily inconvenience. This topic is a very interesting two-sided debate, and overall will be a big decision for the company.
ReplyDeleteI feel as though the creation of jobs at 50,000 is a HUGE number. I do not know if there would be a big enough demand for the jobs in the field that amazon is providing. Also would the pay that these jobs are offering be substantial enough so that people would be willing to quit jobs or move to obtain these new ones. Also I think Maddie brought up a great point where it could be harmful for citizens to get used to new traffic patterns and a more crowded city overall. Ultimately it comes down to is this building going to produce enough revenue to where the pro's outweigh the cons.
ReplyDeleteI think that 50,000 new job opportunities is huge for the US. I agree that the positives definitely outweigh the negatives in this case and that this will definitely be a huge step for the US. I also agree with Maddie in how it could be harmful for the nearby citizens and the traffic issues. Ultimately, this is an interesting debate topic and a giant decision for the company.
ReplyDeleteAmazon creating their new headquarters is a large advantage for our country due to all of the benefits it entails. 50,000 new jobs will help boost the United States' full employment rate and include more civilians in employment that would not be seen without this new project. Whether Amazon decides to build the HQ in a metropolitan area or rural, the transportation to and from the building will be easily accessible. I don't believe that the building needs to be in the center of everything, however it will succeed regardless of where it is due to the fact that all cities have people in need of work.
ReplyDeleteThis feels very much like the Foxconn situation and it is interesting to see how two people have found a different perspective on it. In the Foxconn article, it says how Wisconsin paid Foxconn too much to build in Wisconsin and how it was a poor investment. Whereas, the bidding for Amazon's HQ is seen differently.
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Having a headquarters could bring many opportunities to fresh faces, it gives many people in different locations to have experience with Amazon. By having one, more jobs will come into the scenario. Wherever they put it, even though more traffic is expected, there will be more options of transportation and resources for personnel in HQ services.
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