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Eric Starkman is a former business reporter for The Detroit News, Toronto Star and other newspapers. He also managed a PR and crisis communications firm in New York and San Francisco. Starkman lives in Los Angeles and is writing a television pilot. This column first appeared in the Toronto Star.
By Eric Starkman
As a former Torontonian who still cares deeply about my birthplace, I’m hopeful that Amazon.com Inc won’t locate its second headquarters in the region.
Mayor John Tory thinks Toronto "made the playoffs," being named one of 20 cities on Amazon’s short list, but it's a tournament the city would win if it lost. Heed Seattle-based columnist Timothy Egan: "Be careful what you wish for."
Amazon derives its success because of its deliberate Darwinian culture that encourages combativeness and pits employees against each other. It is a fundamentally ruthless and predatory company. Seattle residents have a name for the sorts of people it attracts: "Amholes."
A major company’s toxic culture can spread like a cancer and adversely impact the behaviors of other corporations in its shadow. Consider this insight from Canadian Stacey Tozer, a former BlackBerry sales rep in Seattle, who took a 75-percent pay cut to work at a Waterloo startup.
"As much as I love Seattle, it was an individualistic, career-driven situation," Tozer told The New York Times. “(Waterloo), it’s not about competition. It’s about building a community helping companies grow."
Amazon has to pay top dollar to attract employees, which will drive up wages and make it more difficult for other Toronto start-up companies to attract or retain employees.
Help or hindrance?
Startups and small businesses generate considerably more job growth than big corporations, studies show. So that while Amazon claims its second headquarters will generate 50,000 technology jobs, the company may ultimately be responsible for hindering even more job generation.
Amazon is a notoriously lousy corporate citizen. The IRS is pursuing the company for allegedly owing $1.5 billion in unpaid taxes, the European Union in October hit the company with a $294 million tax bill, and last month Amazon had to pay $118 million to settle an Italian tax probe. It's only been in recent years that Amazon and Bezos have supported local Seattle charitable efforts, following years of criticism.
For insight on how Amazon will impact Toronto, Mayor Tory should visit San Francisco and interview some longtime working-class residents. Good luck finding them: Rents have become so prohibitively high that many were driven out of the city.
San Francisco, once a mecca for idealistic do-gooders, has become a soulless city overrun with overpriced, single-origin coffee bars, artisanal ice cream shops, and pretentious restaurants charging mega dollars for measly portions, albeit organic and locally sourced.
Toronto’s homeless advocates should be especially concerned about an Amazon presence. Silicon Valley’s invasion of San Francisco worsened the city’s already chronic homeless problem. “Tech bros” — the industry is mostly male — are notorious for their disdain for the downtrodden. They also are known for their sexism and increasingly sex orgy parties.
Toronto Offers No Tax Breaks
Kudos to Toronto for not offering Amazon any tax breaks, which clearly aren't a determining factor. Detroit and Michigan offered to let the company forgo taxes for decades, and Amazon still gave the Motor City a-thumbs-down.
Ontario’s more humane and protective labor laws could pose a problem: Washington is an “at will” employment state, meaning a company can fire someone without establishing cause. Ontario Human Rights Commission better bulk up mightily if Amazon comes.
Amazon’s reality show search for a second headquarters is a very harmful PR stunt, an example of its culture promoting ruinous combativeness. How humiliating for Detroit that Amazon has declared the region so lacking in talent they wouldn’t locate there even if they could legitimately get away without paying taxes. That’s going to make other major companies think twice before locating there.
Toronto is a world-class city and it doesn’t need to genuflect to Amazon, or any other company, to attract business. Mayor Tory should maintain his dignity and stop obsequiously courting the company. Amazon is quite experienced with site selection, and where it locates its second headquarters will be determined by reams of Big Data that no city or region can influence.
Toronto should consider itself blessed if it isn't chosen.
