The 14-months-long Amazon drama concluded last week when the company finally announced its location choice for its second headquarters. In the process, Amazon learned a lot about cities, and we learned that Amazon is magic: It made billions of dollars that previously never existed suddenly appear overnight. For example, Philadelphia offered $1.1 billion in incentives, with an additional $4.6 billion from the state.
Yes, this is the same state that had to borrow more than a billion dollars to pass a budget two years ago. Naturally, the $4.6 billion, or the city's $1.1 billion, is not written as a check, but rather is the value of incentives and tax breaks, with the idea that the investment will return far more over time. Still, it's clear: You can always find the money if it's important enough.
Getting the 50,000 new jobs promised by Amazon is certainly important, but the fact is, most of those jobs – requiring technical education and expertise — would not necessarily have moved the needle on the city's deep poverty rate.
And that makes us wonder what kind of returns we'd get if the city decided to target that $1.1 billion investment — about $55 million a year — in altering the poverty rate. For example:
Help small- and medium-size businesses grow: For example, to help businesses add one more employee to their payroll, especially one who was unemployed for a certain period of time, the city could subsidize a portion of the wage for a limited period of time and pay for vocational training in community college. This is a win-win: More jobs are created, more people get skilled, and businesses grow.
Streamline the city: Opening a business requires permits and inspections, and if a city can't process these requests in a timely fashion … they'll go elsewhere. Spending money to upgrade systems and services to streamline the process would certainly encourage more business development.
Feed people: A report released this month by Hunger Free America found that almost 1 in 5 Philadelphia residents, 302,685 people, live in food-insecure households. The cost to make those households secure is $158 million per year, according to the report. Having a fifth of the population hungry has grave implications for our economy and public safety. Hungry employees can't concentrate as much at work and hungry students can't concentrate as much at school.
Invest in education: Innovation takes education. An investment in Philadelphia schools is a direct investment in the future economic growth of the city. That starts with having toxic-free schools that do not rob children of their potential by exposing them to environmental hazards such as lead — as Philly schools do. The money could be invested in school infrastructure to make schools hazard-free.
Fix transportation: Philadelphia's congestion problem is bad for business and workers. The money could help fund City Council President Darrell Clarke's plan of creating a special class of traffic enforcement officers, eliminating SEPTA transfer fees, or investing in technology to better estimate real-time public transportation departure and arrival times. Further, the state allocated an additional $100 million for transportation if Amazon picked Pittsburgh or Philadelphia. That is still a worthwhile investment.