The economics of Minnesota’s Amazon bid for a second headquarters should be straightforward. The goal of any company is to make money, and the easiest place for Amazon to make money is right here.
The list of metropolitan areas that have a significant chance is very short, and we are on it. There are 54 U.S. and Canadian metro areas with more than 1 million people. Of these, we can exclude those lacking either a reasonable cost of living or a highly educated workforce. If avoiding a high cost of living and the increased employee and real estate costs that go with it weren’t important, there would be no need for Amazon to look outside the familiar confines of Seattle. And Amazon’s need for a highly educated workforce is self-apparent.
Applying just these two requirements, the list shrinks to eight: Denver; Dallas; Austin, Texas; Houston; Atlanta; Minneapolis-St. Paul; Detroit; and Baltimore. Of these, which metro area has two Fortune 100 retailers that have not only adapted and survived but even thrived through the retail apocalypse of the past two decades? Just us, of course.
The naysayers may say Minnesota has no chance for the Amazon HQ2 given our “business unfriendly” taxes. But if taxes and government subsidies were everything, Silicon Valley would be in Ireland or the Cayman Islands.
It’s clear to everyone except self-absorbed public officials that people, not governments, form the foundation of economic and business prosperity. If you need a talented software engineer for your new startup, Silicon Valley is the place to be. If you’re a Fortune 100 retailer looking for talent, Minneapolis-St. Paul is the place to be.
Gov. Mark Dayton should reach out to Target and Best Buy to ask for their support in the Amazon HQ2 bid, not apologize to them for it. Amazon’s magnetic pull for talent will benefit our local retailers, who have to compete nationwide. Just as Medtronic, Boston Scientific, St. Jude Medical, 3M Health Care and hundreds of smaller medical device companies in Minnesota all benefit from their mutual draw for talent in their field, so will Target, Best Buy and Amazon mutually benefit from being based in Minnesota.
In the world economy, talent trumps protectionism every time.
We’re entering this contest from a position of strength, and our bid should reflect that. For a company with $135 billion in revenue last year, it doesn’t make sense to trade an opportunity to grow with the best people in the business for a few billion in tax breaks.
Win or lose, the business opportunities we create through our ongoing investment in a talented workforce will continue to pay us back for generations. The real losers in this process are the cities and states that should realize they have no chance. Only after neglecting education does paying $3 billion for 3,000 low-paying jobs like our neighbors in Wisconsin seem like a good deal.
Dan Lund is the mayor of Newport.