In Nashville, Will Amazon Overpromise and Under-Deliver?

A transparency measure passed last year in Nashville has unlocked new information about Amazon’s plan to build an operations center there, including hints that the company may not fulfill its employee salary promises. The document, which also reveals Amazon’s local hiring projections, offers the clearest look yet at Amazon’s employment plans in an HQ2 city. And as Nashville’s Metro Council prepares to vote on the city’s incentive package on Tuesday, advocates are hoping to use it to push them to defer approval, and organize a public hearing with Amazon.

In its November public announcement, Amazon pledged it would build a 1-million square foot “Operations Center of Excellence” in downtown Nashville, investing more than $230 million in the city and hiring 5,000 full-time workers paid “an average wage of over $150,000.” In the more detailed resolution released this week, Amazon reaffirmed those commitments, and for the first time provided a breakdown of what the positions might look like. The majority of the jobs (3,000) are projected to be in business and financial operations, and 40 percent of the total jobs are expected to be held by “residents of Davidson County.”

What’s less clear is how much each of these jobs will pay. Amazon reiterated in its resolution that overall, the jobs will have an “average salary of over $150,000.” But instead of including its own specific projected salary ranges, Amazon posted Davidson County’s median annual wage for each category of job, and promised that almost all of Amazon’s Nashville employees will be paid more.

The county’s overall median annual wage is $47,110, and Amazon promises that 90 to 95 percent of Amazon jobs will top it. The top Davidson County salary listed goes to those in management jobs, who are paid a median annual wage of $104,830. Amazon is projected to employ 50 of them, and pay them “above” that median. The lowest salaries are projected to go to Amazon’s 400 office and administrative support workers, 90 to 95 percent of whom will also be paid “above” the Davidson County median of $37,540.

All of those baseline salaries are a far cry from the $150,000 average salary Amazon promised, notes Ann Barnett, a campaign and community coordinator with the Central Labor Council of Nashville and Middle Tennessee, and an organizer with Stand Up Nashville. “Let’s give Amazon all of the benefit of the doubt—let’s say they’ll pay all employees $50,000 over the median wage,” she said. That average still comes to about $118,000 a year. “Literally, they’d have to almost triple these wages to reach the number they’ve been promising all along.”

Amazon declined to comment to CityLab on the record about how these medians would affect its salary decisions.

Part of the problem could be that Amazon promised median salaries of $150,000 in all three cities it initially chose to host new campuses, seemingly regardless of local costs of living. And $150,000 goes a lot further in Nashville than it does in Arlington County, where Amazon plans to build another campus; or in Seattle, the site of Amazon’s original headquarters. According to Sperling’s Best Places, Nashville’s cost of living ranking—accounting for things like home prices, utilities, and transportation costs—is 110, more than the U.S.’s average of 100, but much lower than Arlington’s 194.2 and Seattle’s 204. Comparing housing prices alone, Nashville median home costs$250,000, versus Arlington’s $685,000 and Seattle’s $761,000.

“I wouldn’t want to get into an argument about how little they deserve to be paid,” said Barnett. “The bottom line is that Amazon has promised an average of $150,000. If they’re lying about that, what else are they lying about?”

The “Do Better Nashville” law that led Amazon to release this information was introduced by council member Anthony Davis in November 2017 and passed last January, amid controversy over Nashville’s role in the bidding war for Amazon’s HQ2. The Nashville Metro Council has final approval power over the incentive package offered to Amazon, even though it was not fully briefed on the contents of Nashville’s HQ2 bid, which included up to $15 million in cash grants, contingent on hiring. (For each job created over the next seven years, the city has pledged $500 to the company, pending the Metro Council’s Tuesday vote.) The state has separately approved a $65 million cash grant, also contingent on hiring, along with $21.7 million in job tax credits.

In the past, there has been little public oversight over what companies that were promised incentives​​​​​​ actually delivered, says Barnett. “We had seen a lot of projects come into town promising to deliver a certain number or type of jobs and once they get the lucrative tax deals, they change their whole business plan,” she said. “We wanted to get more transparency, and get answers concretely upfront in writing so the council folks—and by extension the community members—could make a more informed decision on the front end.”

Under the new law, every company given economic and community incentive grants or payment-in-lieu-of-taxes (PILOT) incentives by the city must outline the number, quality, duration, and compensation of the jobs they’ll create, both during and after construction; whether they’ll go to Davidson County residents; and the number of labor and OSHA violations the company has had in the past decade.

Barnett says that in its resolution, Amazon has failed to adequately address all these points. The company pledged that 40 percent of its employees will be residents of Davidson County, but Barnett notes that it did not break down the number of people relocated versus the number of people hired from within the community. She fears Amazon could be counting employees that move from Seattle or elsewhere and become residents thereafter.

“I feel incredibly frustrated,” said Barnett. “They haven’t given us any answers, even though we have this mechanism to get these answers.”

Amazon has made other commitments to developing a relationship with Nashville’s local talent, however. In its resolution, Amazon announced it would hold “two job fairs or recruiting events” annually, in partnership with local universities and HBCUs, “focused on diverse hiring over the initial two years.” Just this week, it pledged $800,000 to “endow a computer science professor at Tennessee State University,” according to the Nashville Business Journal, “in an effort to start establishing its own pipeline of diverse prospective employees.” Amazon has also committed $100,000 to Project Return, a local organization that helps the formerly incarcerated return to civilian life.

And while there are few ways to claw back incentives once they’re given, Nashville has given itself an escape route by passing the “Do Better” law, which mandates that companies submit quarterly reports to the mayor’s office of economic and community development providing updates on hiring and wages. If Amazon gets two years into the project—paid $500 for each job it creates—but doesn’t hold to its salary and local hiring commitments detailed in the resolution, the council can suspend or terminate incentives, said Barnett.

Arlington County, which has been chosen to host another 25,000-employee Amazon campus, does not have similar transparency measures in place. Virginia Governor Ralph Northam quietly signed away up to $750 million in state incentives (some of which is contingent on hiring) to Amazon last month; and the Arlington county council will vote Saturday on the county’s own incentive package of $23 million, which is tied to projected increases in the local hotel tax.

Activists hope to use a public hearing before the vote to raise their own concerns over Amazon’s cooperation with federal immigration agents, its perceived lack of public engagement, and its potential to inflate already-high housing prices—though local polling shows that county residents are overwhelmingly supportive of the deal there, and they have few allies on the county council.

“We’ve lost 25,000 jobs in this century,” said Christian Dorsey, the Arlington County Board’s vice-chair. “Amazon is effectively going to bring us back to the peak of our prior economic performance.”

But as activists in New York City proved last month when they drove Amazon away from building its planned campus in Long Island City, Queens, nothing’s a done deal until it’s done.