Jacob Miller grabbed a backpack and set off around America to explore issues of urban economic growth and inequality. Looking at local applications for the Amazon second headquarters, he suggests there may be better ways for cities to thrive, including plans for a universal basic infrastructure and a new square deal.
My first few steps back on American soil were crossing Montlake Bridge in Seattle on a hot late summer day. Each way I looked I saw vignettes into modern America. Below my feet passed two party boats full of dancing and drinking young professionals, on one side of the bridge a seemingly middle-class neighborhood and a university, on the other an informal tent encampment.
Those first few steps illustrate the tensions in America today. Staggering urban growth brings starkly defined divisions between the affluent and working and those not in the formal economy. For reasons that will become clear, I am personally deeply invested in understanding this relationship between growth and inequality to find solutions to create sensible and inclusive growth, so I took a backpack and a small amount of savings and traveled across the United States looking at urban growth through the lens of the Amazon second headquarters application process. I couch-surfed, lived in boarding houses, met with city officials and had dozens of conversations with people from every class background and spent countless hours walking around each city.
My conclusion from that journey is clear—cities do not need to spend time trying to attract Amazon and companies like it; instead we should double down on a plan for a universal basic infrastructure and a new square deal.
The Return of the Company Town
Last year Amazon put out a request for proposals that had cities compete to host their second headquarters. Over 200 locations across North America submitted applications promising tax breaks, free land, increasing local talent development and other incentives to woo Amazon to locate 50,000 high-paying technology jobs in their zip codes.
As the cities put in their applications, I began studying at the University of Cambridge. This took me a long way from home, in more than just geography. I grew up and lived my whole life within a ten-mile radius around New Bedford, Massachusetts. I am truly a local kid, a first-generation college student educated at my local vocational high school, community college and university – I had never spent more than a few weeks away from home. Cambridge, a beautiful city with a world-leading university and also the highest levels of income inequality in the UK, inspired me further to understand the relationships between growth and inequality.
I decided to start my journey in Seattle to get a first-hand view of how Amazon style growth effects a place. Then I traveled from Seattle, to Detroit, to Cincinnati, before heading back to the city grew up in, New Bedford, Massachusetts. Each city applied, but did not make the finalist list. I went to each to understand what lessons were learned in the application process and why these former company towns were competing to become company towns again, and, most importantly, what should be done without Amazon. There seemed to be two clear lessons.
Key Lessons
1. Use funds from incentives to create an environment where individuals and businesses can thrive through a plan for Universal Basic Infrastructure
Amazon gave feedback to cities that did not make the finalist list. Each city that I traveled to cited talent and physical infrastructure as the reason given why they weren’t selected. What could the billions being spent on incentives and other big ticket projects go towards if diverted away from inducements to Amazon? One clear answer and need I saw in each city: investing in the basic infrastructure to support success.
Diane Coyle, Bennett Professor of Public Policy at the University of Cambridge, outlines the idea of a Universal Basic Infrastructure (UBI): “Our version of UBI would give all people, places and businesses access to the physical infrastructure they need – such as transport, energy, and digital – and also to the ‘soft’ infrastructure of high quality health and education services that are essential to everyone’s well-being and capacity to find jobs.”
2. Implement a new square deal
In the early 20th century, Theodore Roosevelt called for a square deal which he defined with three C’s: consumer protection, corporate control, and conservation of the environment. Many have compared America’s current political and economic system to the Gilded Age that Roosevelt operated within. Each city that I traveled to had this dynamic play out. Corporations control them, consumers and workers are living with increasing precarity, and the environment is secondary to development.
Massachusetts State Senator Mark Montigny points out that current tax incentives for industries including film, bio-tech and financial services cost the state billions in taxpayer funds, yet produce little result. “Bio-tech is thriving because brilliant people want to be in Massachusetts,” said Senator Montigny. He argues that higher education institutions and already existing industrial clusters (not state tax incentives) are the reasons for the industry’s success. Senator Montigny describes incentives as part of a regulatory system that “goes way out of the way to reward the wealthy.”
Today’s square deal should take inspiration from Roosevelt’s, but at its core it should grapple with what Doris Kearns Goodwin, a U.S. presidential historian, describes as “a new vision of the relationship between labor and capital, between government and the people.”
A physical plan for a universal basic infrastructure and a political movement for new economic and political relationships are necessary to curb the extreme inequality that comes from our current flavor of urban growth.
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
