Councilmember Sawant discusses findings that "Amazon Tax" would spur job growth

Remember, so on and we're ready to go.

Thank you for your patience, everybody.

Good morning, everyone.

I will echo Jonathan's thanks to everybody for your patience, both members of the media and our esteemed panelists for today.

I wanted to explain the reason for the delay.

We just have heard from the city council that they have canceled meetings for the discussion on the tax Amazon legislation through May 31st.

And I have to say, I am not surprised, actually.

But I'm completely stunned and scandalized by this decision.

We don't know how long this pandemic will go on.

We don't know how long the stay at home orders will need to be kept alive in order to keep people alive.

And in reality, what the decision that has been taken is not only at the doorstep of the city council members and Mayor Durkan, but also Governor Inslee, who are all pretending to be in denial that the need to tax big businesses to immediately make sure that we don't have a major slashing of budget.

And furthermore, we immediately enact a job creation.

The idea that this is not an emergency is complete dishonesty.

This has been disguised as some sort of responsible governance.

But in reality, It is the democratic establishment at the city and state levels colluding with big business and the wealthy to undercut what has decidedly been a tremendous momentum for the tax Amazon movement in Seattle.

And in the context of the destitution faced by a majority of Seattle's working people, this is an absolutely irresponsible and reckless decision on the part of politicians.

Councilmembers Gonzalez and Herbold, who have now at this moment led the charge that somehow discussing this legislation is in violation of emergency measures, these two councilmembers were among the seven of the nine councilmembers who voted to repeal the last Amazon tax that we had won in 2018. At that time, they were fully prepared.

They were fully prepared to violate the Open Public Meetings Act in 2018 in their defense of big business and the wealthy.

And that was also in the face of tremendous momentum to the tax Amazon movement.

So at that time, they were fully prepared to violate the Open Public Meetings Act.

And now they are using a supposed adherence to the Open Public Meetings Act I completely, you know, I call this into question.

In 2018, they were fully prepared to violate the OPMA in their defense of big business and the wealthy.

Now they're using a supposed adherence to the OPMA in service of big business and the wealthy.

So it is not about the open public meetings.

It's not about their loyalty, supposed loyalty to democratic laws, it's their loyalty to big business.

And at both times, in 2018 and in 2020 now, they have made these decisions behind closed doors.

And this is absolutely shameless.

The notion that taxing big business in order to immediately provide $200 million cash assistance this year to the neediest households, and then immediately next year starting a public works program for social housing and Green New Deal, measures is not COVID related is completely absurd.

It's false on its face.

The city is facing a triple emergency, public health, housing affordability, and jobs.

My question to these politicians is how many emergencies do we need to be in for them to act responsibly?

And the last thing I will say about this before we turn to the main business of this press conference to highlight the incredible jobs numbers for the Amazon tax is that even if we were to take this position at its face value, the question is, how long will the establishment plan to postpone this?

Because we don't know how long we will have to carry out to stay at home and social distancing policies.

And I absolutely reject this notion that the only choices for working people is either you stay home without income or you go out there and risk your very lives.

There has to be a third option.

And that third option is making sure that everybody has income and the ability to survive and live out this crisis until we have viable vaccinations that have been developed through the research that is taking place right now.

But in order to fund that kind of social safety net, we will need to tax big business.

And that is why we are here today at this important press conference where we are going to be discussing with local workers and national experts the economic impact of the tax Amazon legislation, and to unveil some important and exciting new data about job creation with our legislation.

And the data that we're going to look at today, they really reveal the two choices that Seattle's political establishment has.

They can either choose to side with working people, save lives, rebuild our community in the wake of COVID by investing in jobs, housing, and the Green New Deal, or they can do what they are doing right now, which is double down on the misery for working people, not for them, because all council members are getting their lavish paychecks, but double down on the misery for working people with austerity policies, with splashing of budget, mandatory furloughs of public sector employees, while maintaining the corporate tax haven for big business and the wealthy.

The national unemployment figures from this morning are absolutely staggering.

33 million workers have filed for unemployment in the last seven weeks.

And we know this is a vast undercount because it does not factor in people who work in the gig economy, like Uber and Lyft drivers, workers in the informal economy, and people who've had their hours reduced but not completely eliminated.

As of the end of April, one in every five Washington workers had filed for unemployment since the COVID crisis began.

And we've just learned that another 110,000 Washingtonians on top of these figures filed for unemployment last week.

Economists have stated that we are entering a period of long and profound economic disruption with long-term impacts on access to housing, jobs, and other basic necessities of life.

Harvard economist Kenneth Rogoff, who studies recessions, has estimated that we might be about to see the mother of all financial crises.

By comparison to the present moment, the Great Depression lasted a decade, with unemployment peaking at about 25%.

The Federal Reserve now estimates that unemployment could peak at 30%, well above the Great Depression peak.

Capitalism is a failed system that has had recessions written into its DNA.

And in the absence of serious mass movements successfully winning different outcomes, and we can see now why we need an even more powerful movement, the political establishment under capitalism, both Democrats and Republicans, serve the interests of big business and the wealthy.

by brutally pushing the costs of the recession on the backs of working class and the poor.

And you can see from today's example that the democratic establishment is not averse to using laws this way and that, twisting and turning them to serve their own purpose, to serve big business interests.

The cost that is put on the backs of working people from recessions is extracted in the form of massive and prolonged joblessness and loss of income, almost overnight destitution and impoverishment, slashing of already underfunded social programs, attacks on union rights, retaliation against whistleblower workers and worker organizing.

And in the United States, the absence of Medicare for All policy also implies huge loss of health care protection for workers who are laid off and lose employer-based health insurance.

All of this ensures that the elite, the major shareholders, the millionaires, multimillionaires, and billionaires are not only shielded from all the ravages of the recession, but in fact, profiteer from the crisis.

Recessions and other disasters have been used by the wealthy to orchestrate wealth grabbing and snatching away of reforms hard fought for by mass movements in previous generations.

Thus, the permanent decimation of public schools in Louisiana in the wake of Hurricane Katrina, and the nearly 8 million foreclosures in the decades since the 2008 Great Recession, which permanently destroyed home equity in the middle and working classes.

And already now, in this recession, the Institute for Policy Studies has reported that as of April 15, Jeff Bezos' fortune has increased by an estimated $25 billion since January 1, and between March 18 and April 10, You know, the same three in the three week period when over 22 million people lost their jobs over that same three week period US billionaire wealth increased by 282 billion, which is an almost 10% gain and during the Great Depression and in the aftermath of the Great Depression.

It was only because of determined and organized mass movements, especially historic general strikes led by socialist leaders in the labor movement in the 1930s, that the federal government under FDR was finally forced to enact the New Deal programs.

And that was nearly four years into the depression.

And by that time, the jobs and housing crisis had greatly exacerbated.

So you can see, you know, there's already huge empirical evidence to show that if there's delay in acting on these policies to create public works programs, that what cost it will extract from the working class in terms of job losses, housing losses, increased homelessness, and lack of money to even buy groceries.

And so all these emergencies are wrapped up as one big emergency for working people.

And there has to be a single integrated emergency response to the historic crisis.

And that's why we have introduced our tax Amazon legislation to address this triple emergency.

As the media know, it will provide $200 million in emergency relief immediately this year.

which will be a lifeline for households.

And then starting next year, invest in a massive expansion of social housing and Green New Deal programs.

Also beginning next year, our tax Amazon, in addition to housing, and as I said, the Green New Deal programs will also be introduced, which include weatherization and insulation projects, electrification, solar installations, and other projects to increase home energy efficiency, which will also reduce Seattle's pollution output.

And as Naomi Klein, Bill McKibben, and climate scientists from throughout the nation have told U.S.

Congress, the climate emergency is wrapped up in the COVID emergency.

We need public works programs that will create jobs, good-paying union jobs, which will eliminate or at least reduce the fossil fuel footprint of the United States.

Our council central staff has consulted with industry experts and determined that in the aggregate, the tax Amazon legislation will create or support up to 34,000 jobs over the course of the first 10 years of this legislation.

I hope My staff can put the infographic in front of the media, and we'll also share this electronically with you all.

But I think this infographic really captures the essence of what is happening here, not just the Amazon tax legislation, but why the Amazon tax legislation is necessary in the context that we're facing.

And, you know, coming in, when I woke up this morning, I knew this infographic in our press conference was going to be important.

I just didn't know how stunningly important it was going to be.

Now, you know, given the context of this absolutely shameful, shameful, historically shameful decision taken by the city council.

And as you can see in the infographic, there's a stark contrast.

Depending on whose side the city council is on, there's a stark contrast between what will happen if there's austerity and what will happen if there is a tax on big businesses.

If there's austerity, then there's going to be massive crisis.

And what it will do is maintain the tax haven for big business and the wealthy.

Instead, if we enact an Amazon tax, then what we will have is an explosion of jobs, an explosion of social housing.

That is the right kind of explosion we want, of good-paying jobs, of affordable, permanently rent-controlled housing.

The National Association of Home Builders, NAHB, not exactly a pro-worker, socialist organization, has given us these estimates, you know, we have these estimates, has found that the construction of a 100-unit multifamily building will support 90 jobs.

This includes direct construction jobs and indirect jobs in the wholesale and retail trades and in business and professional services.

The NIHB also reports that the economic activity generated by this construction will support another 71 jobs by the induced spending in the local economy.

So that's why those numbers are included in the infographic.

Our legislation will invest $125 million per year in Green New Deal home renovations.

And the American Council for an Energy Efficient Economy estimates that for every $1 million in energy efficiency investments, 17 jobs are supported.

And finally, in the permanent supportive housing that we will create with the Amazon tax, we will be able to generate hundreds of permanent social work and other support jobs.

Again, good paying jobs.

This is what our tax Amazon legislation is about.

It's about doing the right thing.

at this historic moment.

It's about taxing the wealthiest corporations in our city, many of whose profits have soared in recent months, to fund emergency aid and to create and support thousands of badly needed jobs to build and operate affordable housing and fund the Green New Deal.

We do not share the vision, the dystopian vision of the elite and of the political establishment that serves them, which would leave working people to struggle and suffer on their own while facing massive cuts to public services and facing a prolonged and uncertain period of joblessness.

It is astounding for me to read letters from corporate executives who are complaining about having to pay 1% of their budget in taxes.

It's just astounding given that the bottom is being pulled off from under working people's lives.

The mayor has also come out against our plan.

But none of these politicians who are against our program have any alternate proposals.

Their only alternative is austerity.

So ultimately, it's about us, about workers, about the movement.

Are we going to accept that austerity?

Or are we going to fight back?

Are we going to accept their There are false positions that this is against the law to actually pass this tax right now or even discuss it right now.

Or are we going to fight for our rights?

The urbanist recently noted a 10% cut to the general fund would be devastating.

The austerity meat cleaver will hit social services that people count on, especially during a pandemic recession double whammy.

So it's up to us if we're going to fight back or not.

And so today we are fortunate to have with us a number of experts.

First, we have a pair of rank and file construction workers who can speak from their direct experience about how this legislation will create jobs for them in their industry and why it is that they and their co-workers support this.

And then we will hear from two leading national experts in economics and employment policy.

First, I'd like to introduce Logan Swan, rank and file member of Ironworkers Local 86. Logan and his co-workers do the structural steel installation in the high rises we see all over downtown and South Lake Union.

Their work requires great skill, training, concentration, and care, building the buildings that we live in and work in every day.

Welcome, Logan.

Hi.

My name is Logan Swan.

I'm a rank and file union iron worker, works in Seattle.

I support the tax Amazon campaign because it meets multiple desperate needs of working families.

Prior to this pandemic, workers were experiencing a housing crisis.

My commute to work is a half hour to an hour each way.

And I'm considered extremely fortunate.

Many of my brothers and sisters spend three to four hours a day in their cars.

Falling asleep while driving is a running joke on the job site.

We come into the city, we risk our lives to build it, but have been economically pushed out, unable to afford what we've created.

The private housing market has completely failed us.

This tax on big business will build 10,000 homes in the next decade, giving us an alternative to increasingly unaffordable housing for profit.

The economic downturn only adds to the need to tax these highly profitable corporations.

Much like the private market failed to meet our needs for housing, we can see how the last crash led to devastating unemployment.

The private market failed to provide us with jobs with 30% unemployment in the building trades.

In the first decade, tax Amazon will put 10,000 of my brothers and sisters to work addressing the profit-driven housing crisis.

34,000 jobs will be created or supported overall from the construction workers in the field to the manufacturing and transportation of materials.

I've read that this economic bust is a bad time to tax corporations, but I remember being told at the height of the boom that was also a bad time.

Workers are told if we tax big businesses, if we fight for better wages and conditions, that they'll go somewhere else, that tax breaks for big business means more jobs for the rest of us.

But contrast this trickle down theory with reality, and you see a different picture.

Boeing was given $8.7 billion, and union machinists got raked over the coals in 2013. But since then, Boeing's moved 13,000 jobs out of state.

A movement of tenants and workers denied Amazon $3 billion in handouts for their headquarters, HQ2.

They're building there anyway.

According to anti-labor talking heads, the $15 minimum wage was forecasted to destroy Seattle's economy, which obviously didn't happen.

What did happen is the movement we built here spread across the country, winning substantial victories and putting billions of dollars into the pockets of some of the lowest paid workers.

What's good for the goose is not good for the gander when every dollar the boss gets was taken from those of us who do the work.

Washington State has the most regressive taxation structure of any state in the country, and Seattle has the most regressive tax in the state.

Somebody has to pay for roads, bridges, schools, and government infrastructure.

Since corporations aren't paying their share, that means workers like me have to pick up their slack.

Why else do you think property and sales taxes are so high?

Companies like Amazon lobbying to dodge taxes is why all these roads and bridges are told and why living here is so ridiculously expensive.

Forbes and many other outlets have reported on how billionaires are getting richer during the pandemic.

The most recent numbers I've found state Amazon CEO Jeff Bezos has increased his wealth by 33 billion over the course of the outbreak, while Amazon stock has reached its highest value per share.

This is while 33 million are unemployed and a third of renters couldn't pay rent last month.

The rest of us not only do the work of making the economy run, we then have to pay for the infrastructures that businesses profit from.

It's past time for them to pay into the society that they've so lavishly benefited from.

I have an obligation as a union member to stand in solidarity with working families.

And that's why I fully support raising this modest 1% tax on 2% of the biggest corporations, an appeal to my brothers and sisters in the labor movement and our unions to join this movement of working people fighting to tax Amazon for jobs and housing.

Thank you, Logan.

have with us also today Nathan Morlock, a rank-and-file member of Piledrivers Local 192. Nathan and his co-workers do marine work.

They build bridges and they drive the pilings that are at the foundations of all the big buildings going up in Seattle.

Welcome, Nathan.

Thank you for having me.

Yeah, my name is Nathan Morlock.

I'm a journeyman pile driver based out of Local 196 in Fife, Washington.

And for me, what stood out most was the fact that 75% of the tax revenue generated from this legislation is going to be invested in the construction of affordable union built homes and gives priority higher to local and young people going through their apprenticeships, which will create thousands of good paying jobs with the highest safety standards.

Now, I think especially in light of the COVID-19 pandemic that we're all dealing with, workers are in desperate need of the competitive wages and safety protections that our unions provide.

And they need to know that if they do get sick or they have to be hospitalized, that they're gonna be able to take paid sick leave and have health insurance cover the hospital expenses that they need, should they need them.

which are offered as a benefit of being a union worker.

Now, a lot of my brothers and sisters that I personally work with support this legislation as well, because again, it'll provide opportunities for workers to complete the training required to graduate to journeyman status while working under union level safety standards, which has never been more important than it is now.

And, you know, when we're talking about apprenticeships, what we're talking about is giving people the training they need to become professionals in their craft and develop the lifelong skills necessary to enable them to make a living wage, put food on the table, and pay their rents and mortgages for the rest of their careers.

And especially now, as you know, hundreds of thousands of people all over the country can't afford their rent.

It's campaigns like this, which are the means by which we get ahead, and the way we set the safety precedent in the construction industry.

So I think union members and organized labor in general should all support this initiative.

Thank you so much, Nathan, and especially for noting the priority hire programs that are included in the tax Amazon program legislation that will allow young people from working class and poor communities to gain training and good paying jobs.

And also, as you correctly said, the union level safety standards that are so crucial and that can and will be enforced in the public housing and green deal program.

We're now very lucky, as I said, to have two national experts in economic and employment policy.

First, I'd like to introduce Lenore Palladino, who is assistant professor of economics and public policy at the University of Massachusetts at Amherst.

She's a fellow of the Roosevelt Institute and a research associate at the Political Economy Research Institute.

She holds a PhD from the New School University in Economics and a JD from Fordham Law School.

She's also a contributing editor at the Boston Review and a fellow at the Rutgers Institute for Employee Ownership.

Professor Palladino has published extensively on corporate power, the relationship between corporate governance and the labor market, and tax policy, and has testified before Congress.

Welcome, Professor Palladino.

Thank you.

Thanks so much for having me.

I want to talk today about why all Americans need public investment, not austerity, in the midst of an economic emergency resulting from the public health crisis.

And I applaud the Seattle City Council for considering this important bill, at least in some way it sounds like, to levy a small tax on corporations as a means to support working families in the short term and to invest in Seattle's future in 2020 and beyond.

I wanted to make just two points about the proposed legislation.

The first is why Seattle and really all of the United States needs public investment in this moment, not austerity.

The second is why a small corporate tax is fair and likely will not change actual corporate decision making.

So first, we know that families in Seattle and across America have stopped working and consuming in an effort to keep us all safe.

For anyone who has taken an introductory macroeconomics class like mine, we know that public investment is crucial to stabilize an economy and not allow families to descend into poverty and fear.

We know from the history of the Great Depression and the Great Recession that public investment is needed when the private sector economy collapses.

Putting money into the hands of working families is the best way to support the economy at this time.

The recent experience of the Great Recession showed us that austerity doesn't work.

states and cities slashed spending rather than raising revenue, and unemployment took years to recover.

Prolonged unemployment should be our greatest economic fear.

When people aren't working, they don't buy goods and services, and the economy can get stuck in a low gear.

The responsibility of public policymakers at this time is to invest in the local economy.

My second point is why fair corporate taxation is productive and equitable.

The key thing economists consider The key thing economists consider when evaluating a tax proposal is how the entity or person being taxed will respond to the tax.

Will they behave differently?

Will they make different decisions about how they produce goods and services, or who they hire, or as a result of the tax?

Large corporations have seen their taxes go down for years, particularly after the 2018 federal tax reform.

which reduced the federal corporate tax rate from 35% to 21%.

Going into the crisis, plenty of large corporations had made record profits for years while building up large cash holdings and spending billions on shareholder payments.

For example, American corporations spent $6.3 trillion, with a T, on stock buybacks in the last decade alone, propping up their own stock prices and wasting money for everyone except those who cashed out before the market fell.

The key here is that a 1.3% tax is unlikely to change the behavior of large corporations.

There is simply too much profit that can continue to be made from ongoing corporate activity.

While the data is not transparently available to determine which corporations would be subject to the tax, it is clear that Amazon will be taxed.

And as Logan spoke so well about before, I'll give you a few reasons why Amazon is doing particularly well in this moment.

Amazon's growing in this time of national crisis as millions of Americans shop online, According to their most recent quarterly filing, their net sales were $75 billion in the first quarter of 2020, up from $59 billion in the first quarter of 2019. Meanwhile, they have $221 billion in assets.

Their wealth will continue to grow, and they are unlikely to cut back on hiring and expansion when there is strong demand for their services.

After all, just two years ago, they were paying a much high federal rate, and they continue to expand and grow.

Bottom line, the small corporate taxes and equitable way to raise badly needed revenue from the entities that are least likely to change their behavior as a result of the tax.

The long-term investments in housing and the Green New Deal are crucial for Seattle and as an example for the rest of us around the nation.

But right now, as we wait to see whether GDP has fallen 20%, 25% or more in this quarter, policymakers must act faster than they have ever acted before and invest in Seattle's future.

So I urge the Seattle City Council to move quickly to adopt this important revenue-raising measure.

Thank you.

Thank you so much, Professor Palladino, especially for using your academic expertise and service of the needs of the most vulnerable and the majority of working people and for your clear remarks, dispelling the lies and distortions we hear from corporate politicians and corporate media.

And just to echo what you just said, policymakers must act faster than they ever have done before.

And I think your words stand in stark contrast to the decision that has been made by the city council today.

And it really highlights the need for us to keep escalating our movement building so that we are able to reverse this disastrous decision by the city council and make sure that they act faster than ever before.

We're also honored to have with us today Professor Gordon Laffer from the University of Oregon's Labor Education and Research Center.

Professor Laffer's work focuses primarily on industrial and policy research, and he has written widely on issues of economic and employment policy.

In 2009-10, Leifer served as a senior policy advisor for the U.S.

House of Representatives Committee on Education and Labor.

He serves as a research associate for the Economic Policy Institute in Washington, D.C., which has done tremendous research over the decades.

And Professor Leifer's most recent book is The 1% Solution, How Corporations Are Remaking America, One State at a Time.

Thank you so much for being with us, Professor Leifer.

Welcome.

Thank you for the opportunity to be here.

As others have noted, the COVID crisis, with one in five Washington workers losing their jobs in the last three months, has put millions of families in danger of losing their homes, their cars, their health insurance.

It's also forcing both government and nonprofit charities to cut back on essential services, like food banks or services for the homeless, exactly at the time we need them most.

The COVID crisis comes after decades of unprecedented inequality.

The richest 1% of Americans now take home a bigger slice of national income than at any time in the last 100 years.

And the top 1% now earn significantly more than the bottom 50% of Americans put together.

Partly because of this inequality, the pandemic has created two very different realities.

Professionals who can work from home are experiencing the weirdness of permanent quarantine.

But everyone else is either out of work and facing economic desperation or forced to put their health at risk by going to work every day.

And this is a time when what happens to any of us affects all of us.

An employee who comes to work sick because they can't afford to take a day off impacts every customer they serve.

Every person forced to live on the streets creates a risk both for themselves and for everyone they come in contact with.

We all know what has to be done.

Immediate health services for all to prevent a resurgence of the virus, financial support to get families of unemployed workers through the crisis, and a serious plan for jumpstarting the economy through job creation.

The only question is who's gonna pay the costs for doing what we all know has to be done.

After 40 years of increasing inequality, it makes sense that those costs should be paid by those with the greatest resources rather than those most vulnerable.

In other words, by the biggest corporations.

The Seattle Times has criticized this proposed legislation by saying, quote, relief must come from the federal government.

In theory, they're right, but the federal government is filled with politicians who are in debt to corporate donors and who shape federal laws mostly to benefit their big money backers.

In the recently adopted CARES Act, for instance, hundreds of billions of dollars that should have gone to workers or to small business are instead going to some of the country's largest corporations.

And they don't have to create jobs with that money.

They can use the money just to enrich their shareholders.

One of the major provisions in the CARES Act will provide tax benefits of more than $90 billion a year and goes entirely and exclusively to people who make more than a million dollars a year.

You can say till you're blue in the face that the federal government should be different, but we can't wait for that fantasy to materialize.

Local communities need to take responsibility and to act now.

What this legislation does is simply correct the injustice of the federal legislation by removing windfall profits from the country's biggest corporations and ensuring that the cost of doing what we all know needs to be done is paid by the best off among us and not by those struggling to keep their families afloat.

Thank you.

Thank you, Professor Leifer.

Really appreciate you highlighting how the COVID crisis is not affecting everyone equally and the kinds of expansive social policies that we will need to protect lives and health and the livelihoods of the vast majority of people in our society.

And that we cannot wait for this fantasy of action from the Trump administration or even US Congress.

that the only question is who will pay either for the crisis itself or for the policies without which this crisis will continue inflicting a ruthless cost on the most vulnerable in our society.

I thank everyone who participated in today's press conference.

We do have a few minutes for questions from the media.

If you have a question, please go to the Q&A function at the bottom of your screen and type in your question.

My staff will read the question out.

And please, you're welcome to ask questions of any of the speakers here.

This is Jonathan Rosenblum with Councilmember Sawant's staff.

see one question in the queue from Paul Schakowsky of Bloomberg.

He asks, can you please release the council president's email or letter canceling the committee meeting next week?

I can simply let me know.

Yes, we will be putting that out as soon as the press conference is over or you can write directly to our office and we'll email it to you directly.

Are there any other

questions that media have.

Not seeing any other questions, we will now close this press conference again.

Thank everybody for participating and thank the media for attending as well.

So thanks everybody and have a good rest of the day and be safe.