Mayor Marty Walsh and Boston lawmakers have been among the most vocal cheerleaders for Amazon to bring its second headquarters, better known as HQ2, to our city. But a look away from Beacon Hill and toward businesses on Main Street will show that rather than rolling out the red carpet, many small business owners think this move goes against our local community by offering unprecedented tax breaks to Amazon.
Their concerns are worth airing in light of a possible HQ2 deal. Overall, rather than creating countless exemptions worth billions in corporate welfare to the third richest company in the world, lawmakers should focus on supporting the growth of local small businesses, which pay their fair share in taxes without asking for special treatment.
Moreover, forced to compete with Amazon on an uneven playing field, small businesses would find it nearly impossible to retain talent if HQ2 comes here. Amazon would be able to leverage its advantage to offer cushy arrangements for executive-level and high-skilled positions at HQ2—all while failing to pay its warehouse workers a living wage. Worse, Amazon would likely poach the best and brightest from local companies to join its ranks, a practice it has done across the country. That would leave small businesses across a range of industries gutted.
The ripple effects would be significant, considering roughly 44 percent of all company employment in Boston happens in small businesses. They generate about $15 billion in annual revenue and employ 170,000 workers—they are the heartbeat of our local economy. Instead of cozying up to Amazon, we should be working on ways to help small businesses capitalize on the vast opportunities created by the digital transformation.
In addition, the unintended consequences of HQ2 would be substantive. Locating the large-scale building in Boston would cause the price of rent to go through the roof. Boston already has little room for commercial expansion and growth. As the fourth most densely populated city, and with our land supply locked in, adding thousands of tech elites from Amazon would result in rent prices that few hardworking Bostonians could afford. Small businesses and mom and pop shops could be forced to give up their offices and retail spaces. By supporting this single corporate behemoth, we diminish the capacity of our vast small-business community.
For these reasons and others, it’s imperative that we rethink our interest in HQ2 and refocus on the 80 percent of all companies that are small businesses. The local and communal benefits of these family firms will have far more positive long-lasting effects for the region and all the employees within it.
Benyamin B. Lichtenstein is a professor of management at UMass Boston.
