Robert Reich: Amazon Is Everything That's Wrong With America
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While America was fixated on the most tumultuous midterm election in modern
history, Amazon reportedly decided that its much-vaunted "second
headquarters" would be split between Long Island City in Queens, and Crystal
City, across the Potomac from Washington, D.C.
What does Amazon's decision have to do with America's political tumult?
Turns out, quite a lot.
Amazon's main headquarters is in Seattle, one of the bluest cities in the
bluest of states. New York and metropolitan Washington are true-blue, too.
Amazon could have decided to locate its second headquarters in, say,
Indianapolis, Indiana. Indianapolis vigorously courted the firm.
Indianapolis is also a Republican city in a bright red state.
Amazon's decision wasn't based on political partisanship, but it reveals
much about the real political and economic divide in America today.
Amazon's business isn't just selling stuff over the Internet. It's getting
consumers anything they want, faster and better. To do so, it depends on a
continuous flow of great new ideas.
Like the other leading firms of the economy, Amazon needs talented people
who interact with each other continuously and directly - keying off one
another's creativity, testing new concepts, quickly discarding those that
don't work, and building cumulative knowledge.
Technology isn't a thing. It's a process of group learning. And that
learning goes way beyond the confines of any individual company. It happens
in geographic clusters, now mostly along the coasts.
As the Times' Emily Badger has reported, the digital economy has been great
for places like Seattle, New York, metropolitan Washington, and the other
big talent hubs like San Francisco, Boston, and LA. But it's left behind
much of the rest of the country.
The result is widening inequalities of place.
For most of the last century, wages in poorer parts of America rose faster
than wages in richer places, as inventions were put to work in the
hinterlands. After Henry Ford invented the Model T, for example, workers on
assembly lines all over the Midwest built it.
Now it's just the opposite. Bright young people from all over America,
typically with college degrees, are streaming into the talent hubs of
America - where the sum of their capacities is far greater than they'd be
separately.
The invention sparked inside these hubs is delivering streams of new designs
and products to the rest of the world - including to other global hubs.
In return, the money pouring into these places is delivering high wages,
great living conditions (museums, restaurants, cafes, recreation), and
unbounded wealth.
Yes, corporate rents and housing costs are skyrocketing, as are the costs of
sending kids to school (even many "public" schools are in effect private
ones because nobody but the rich can afford to live in the school district).
But the incomes and profits more than make up for it. Which is why Amazon
chose New York and metro Washington.
As money pours into these hubs, so do service jobs that cater to the new
wealth - pricey lawyers, wealth managers, and management consultants, as
well as cooks, baristas, and pilates instructors.
Between 2010 and 2017, according to Brookings, nearly half of the America's
employment growth centered in just 20 large metro areas, now home to about a
third of the U.S. population.
Relative to these booming hubs, America's heartland is becoming older, less
well-educated, and poorer.
The so-called "tribal" divide in American politics, which Trump has
exploited, is better understood in these economic and cultural terms: On one
side, mega-urban clusters centered on technologies of the future. On the
other, great expanses of space inhabited by people left behind.
Another consequence is a more distorted democracy. California (now inhabited
by 39.54 million) and New York (19.85 million) each get two senators, as do
Wyoming (573,000) and North Dakota (672,591).
Even though Democratic Senate candidates in the midterm elections received
12 million more votes than Republican Senate candidates, Republicans still
gained at least one more Senate seat.
The biggest talent hubs - like San Francisco, Seattle, and Washington - also
harbor large and growing populations of poor who have been stranded by the
turbo-charged gentrification. These gleaming cities are becoming the most
Dickensian locales in the land, where homelessness and squalor mix with
luxury high-rises and toney restaurants.
So as the American middle class disappears, the two groups falling
perilously behind are white, rural, non-college Trumpsters, and the urban
poor.
It's not Amazon's business to know or care. That falls to the rest of us.
Robert Reich
Robert B. Reich is Chancellor's Professor of Public Policy at the University
of California at Berkeley and Senior Fellow at the Blum Center for
Developing Economies. He served as Secretary of Labor in the.
