The saguaro used to court Amazon, which was returned to sender.

Amazon continues to garner fervent attention in cities across the United States in what has become a municipal sweepstakes to win the prize of its next headquarters without the necessary scrutiny on its total economic impact. At Local First Arizona, we find the growing Amazon effect to be the largest threat to a strong local economy. A recent report from the Institute for Local Self-Reliance called “Amazon’s Stranglehold: How the Company’s Tightening Grip is Stifling Competition, Eroding Jobs, and Threatening Communities” makes the case for how Amazon is undermining competition, small businesses and workers while reducing economic opportunity and consumer choice.

The major findings of the report are startling, including the following:

Amazon captures nearly $1 in every $2 that Americans spend online.

Amazon pockets at least $613 million in public subsidies for its fulfillment facilities since 2005 and more than half of the 77 large facilities it built between 2005 and 2014 have been subsidized by taxpayers.

According to Good Jobs First, a non-profit that tracks state tax breaks, since 2000, Amazon has received $1.115 billion in 129 communities in the U.S., surpassing Walmart, and has an entire team just to seek out these tax breaks by not collecting sales tax and offering an effective discount on every product and to lower the cost of building new shipping facilities.

Amazon reduces the overall number of jobs in the economy by eliminating approximately 149,000 more jobs in retail than it has created in its warehouses, with the pace of layoffs accelerating as the growth of Amazon continues. Amazon has been found to create only 14 jobs per $10 million in sales compared to 50 jobs with chain retailers and 110 jobs with independent retailers, according to a Civic Economics study.

Despite the obvious barriers for the majority of businesses and consumers in the economy, cities and states are competing at a feverish pace to win Amazon’s second headquarters. A Tucson economic development group sent a 21-foot saguaro cactus to Amazon that was quickly rejected and sent back. Amazon just released 20 finalists in its search for its second headquarters, and no sites in Arizona’s proposal were selected for the finalists. Such a development should lead to a thoughtful analysis about the benefits and comparisons to other economic development strategies in actual need of public dollars including local procurement policies and local investment strategies for new and expanding businesses.

Amazon does not need the support of state or local governments to pay them to build what they already plan to build to meet the ever growing demand for their services but cities and states continue to persist. 

What can be done about this massive challenge fundamentally shifting our economy as we know it? First, public policy plays a critical role in countering the current trend to subsidize this giant that needs no taxpayer support for success. Ways that public policy could be effective include: develop and enact strict standards such as number of jobs and the level of salaries and benefits; utilize existing antitrust laws to prevent Amazon to use its financial resources to acquire a monopoly and make competitors unprofitable; break up Amazon to prevent anti-competitive conflicts of interest; and adopt any common carrier rules for Amazon’s platform similar to successful efforts of the past such as transportation. 

Next, we all need to shift greater levels of our spending to locally-owned businesses as much as possible. Studies demonstrate a widespread return on investment, with up to four times more money staying in the local economy when spending with a local business instead of a national chain. That translates to more jobs and revenue right here in Tucson. For every $100 spent at a locally owned business, $43 remains in the economy compared to only $13 spent at a non-locally owned business, according to an Indie Impact Study Series by research firm Civic Economics. These extra dollars circulate in the community through both secondary and tertiary jobs, i.e business services such as accountants, graphic designers, website developers and others, which ensures additional local job creation and preserves diverse and prosperous communities with opportunities for all.

In addition, consider becoming a “Localist,” or become a business or nonprofit member of Local First Arizona to provide support for building a stronger Tucson economy through your regular actions. Join at You can also volunteer to spread the movement by clicking on “Take Action” to be updated on all localist opportunities and be part of the needed mindset and actions for a better economy. 

This is a regular series of columns from Local First Arizona on local sustainable economy issues. Get involved as a member or volunteer of LFA by signing up at