So, can we now turn lemons into lemonade in the wake of the Amazon announcement that our community didn’t make the company’s Top 20 list?
The odds were always astronomical that Memphis would ever make the list despite a good team try by economic development agencies, City Hall, and assorted civic and nonprofit organizations.
When the Top 20 list was unveiled, it largely included the usual suspects and it mostly was the speculative list that has circulated for months. As for Memphis, it was always obvious that no amount of incentives would offset the shortfalls in the Amazon priorities, notably a major airport, effective public transit, and deep reservoir of technical and college-educated talent.
We are unaware of anyone involved in the Memphis process who deluded themselves into thinking that Memphis’ odds were not akin to the odds for getting struck by lightning. But Amazon was just a highly public, highly publicized failure. There have been similar results that have taken place with no media coverage or acknowledgement.
It’s Our Choice
Here’s the thing: the Amazon list of priorities, setting aside for the moment the company’s ravenous gluttony for cities’ revenues as incentives, is not unusual. Its criteria are relatively standard for companies with higher paying jobs and are looking for locations that are attractive for their workforce, particularly millennial workers.
So, the question is whether we are going to pat ourselves on our collective back for doing our best or are we going to make this a learning experience for the Memphis region and mobilize the same energy and effort to up our game.
It’s been said that Memphis does its fishing downstream when the big fish are being caught upstream. The moral is clear: our community is not competitive for the big fish we need to reel in to improve per capita income, expand opportunity, increase economic performance, and diversify our jobs makeup.
At this point, our metro – we emphasize the word, metro – is running in place. Most economic indicators for the 50 largest metro areas still place Memphis near the bottom as our competitor cities improve their economies faster.
Yield Not To Temptation
As a result, we renew the suggestion we made when Amazon first made its announcement: we admit that our economic development strategies aren’t producing the results we need and want and that we really don’t have a shared comprehensive economic development plan that can at least catapult us up toward the middle of the top 50 metro regions in economic performance.
What we need is for the entire community to be engaged in an honest post mortem about where we fell short on the Amazon priorities, to evaluate the key factors that characterize proposals from the top 20 contenders, and to develop an ambitious, aspirational to-do list for us to get into the competition for more highly sought after companies.
This shouldn’t be an evaluation by a single organization. It shouldn’t be an evaluation by a single sector or by the usual suspects. It should be broad-based, involving people not often involved in these kinds of discussions but whose suggestions could bring new thinking and intellectual capital to the work.
It is always a temptation in the wake of a failure like Amazon for people to call for a plan for the future that just happens to be centered on what they do. The truth is that future success will not result from anyone’s favorite magic answer or a specific tactical initiative.
Rather, success is tied to doing so many things right, and most of all, it is about acting with the new, broad-based sense of urgency that is required for the Memphis metro to get into the race for better-paying, more highly coveted jobs.
It’s The Quality, Stupid
A review of the 20 best-loved cities by Amazon shows that most of them are doing many things right at the same time but they do not share a single profile.
There are cities that are losing population like Chicago and Pittsburgh, there are fast-growing cities like Austin and Denver, there are college towns like Columbus, Nashville, and Boston, there are emerging tech hubs like Indianapolis and Philadelphia, and there are some like Toronto and Raleigh known for the caliber of their workforce.
But if you’re looking for a theme for the finalists, it is quality. Where the Memphis metro decided many years ago to go for cheapness, these cities invested in quality – quality tech workforce, quality of life, quality public services, quality green space and parks, and quality economic plans of action.
Many cities were like Memphis and pitched Amazon about their low cost of living, but they were largely left out of the final 20, proving again that there is no relationship between cheapness and economic success. In fact, many of the most successful cities in the U.S. have higher taxes that fund higher quality services that attract the kinds of workers that are key to economic growth (and cities rich with these workers are getting richer).
In fact, the final list should inspire a look at messaging extolling our low cost of living. After all, every one of the 20 cities on the Amazon list has higher costs of living than the Memphis region.
Memphis Kept Its Dignity
In other words, what Memphis needs is a “quality agenda” on which a better economy can be built, and it needs to adopt a “no excuses” attitude as it begins. It’s time to put to rest once and for all the excuses for why the Memphis economy can’t compete for the best jobs in today’s highly competitive environment. It is time to stop justifying the overreliance on low-paying jobs and tax breaks that shift the overall tax burden to homeowners and deprive revenues from local government that are needed to create the quality public services that are essential in creating the conditions for economic success.
Another excuse that we have heard for way too long that Memphis is too poor, too low-skilled, and too close to Mississippi for our economy to soar. Meanwhile, about seven of the Amazon finalists also have metros that cross state lines, and yet, they have found ways to succeed.
There will be some who say that Memphis was not in the finals because its incentive package was not big enough, but that too is a dodge. Our elected and Chamber officials are to be commended for showing some dignity in this process while many of their peers embarrassed their cities with pandering and groveling that made them laughing stocks (Fresno, and Chula Vista, California, essentially offered to turn their cities over to Amazon).
In its way, the Amazon process was an aberration. There’s never been anything like the public process that led 238 cities to submit proposals although the company surely knew who most of its finalists would be from the beginning, the massive, out-of-control incentives offers that got as high as $7 billion (that was an aberration of its own when compared to most of the proposals), and the size of the project.
So, we’re not saying that Memphis should be ready to sell its soul for a company like Amazon that is willing to decimate the public sector revenues in their new home. We live in a time when government – local, state and federal – are perceived by many politicians to exist to serve the interests of capitalism and business.
It is seen in the elimination of all kinds of federal policies to protect water quality, air quality, consumers, and the environment and to eliminate rules to prevent another Wall Street financial meltdown and disasters like massive oil spills. It is seen at the state level in checks being written directly to companies as incentives and to do it behind policies that obscure the public from knowing all the facts. It is seen locally as more and more of the tax burden is shifted from big businesses to homeowners and small businesses.
“Diverting tax revenues directly to private held corporations is a step away from democracy, a step away from responsible governance,” said Matt Gardner at the Institute of Taxation and Economic Policy.
It is in subsidizing these corporations that cities cancel out the economic benefit that the jobs bring, according to columnist David Dayen. “They’re worse than a zero-sum game between Metropolitan areas. They’re net negative, because the corporation extracts the subsidy while cities lose revenue that would otherwise go to education or infrastructure investment to benefit the common good,” he wrote.
No Simple Answers
But we digress. An honest analysis of our economic development program is not about putting together bigger incentives, but to develop a plan that produces the kind of quality of life and inclusive prosperity and opportunity that are the penultimate drivers today for economic success today.
In the wake of the Amazon decision, there are people with various recommendations, but most of them do not touch on the comprehensive nature of the improvements that have to be made. It is not as easy as that. The answer is a shotgun blast, not a rifle shot.
For example, there are some that suggest that the cure to our running in place is in better marketing, but we have no criticisms of the Memphis Regional Chamber’s marketing program. They are doing the best with what they have.
It’s not about telling the story better. It’s about a better story to tell.
No Time Like The Present
There’s no better time to work on this story than now. Rather than engage in personalities and concentrate on blame, we should now engage in policies and concentrate on benefits.
Here’s the thing: it’s too easy to put the blame on a single organization or a single politician when responsibility rests with all of us. If we want an economic development plan anchored in quality, we need to exercise our citizenship to demand it. If we believe that we lack the kind of comprehensive plan that can accelerate our economic progress, it is our obligation to press appropriate officials to put that on the civic agenda.
In the end, we are a point to decide whether we treat the Amazon decision as the reality check that triggers action or whether we treat it as a time for talking points and platitudes. As Ed Glaeser, author about cities’ economics and Harvard professor, said: “At its best, the competition for Amazon has spurred cities to think about how to improve their quality of life more generally. At its worst, the competition has become a distraction and a contest for throwing cash at the giant.”
We can be on the list for the best.
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