The Unintended Impact of Amazon’s HQ2

Based on detailed talks with two communities, people are increasingly sure of where Amazon will locate its second home. Rather than a single place, it looks like it’s two. One could be located near Washington D.C. and the other, just outside of Manhattan.

The probable decision took me to a recent report on the geography of prosperity.

Where the Wealth Is

Many struggling U.S. communities are falling farther behind regions that are prospering. To understand the gap, The Hamilton Project (Brookings) looked at “The Geography of Prosperity” through a Vitality Index. In the index, positive numbers indicate the counties that are faring better than those with a negative rating.

These are the components and their weight:

1. median household income (45%)
2. unemployment (4%)
3. the poverty rate (24%)
4. life expectancy (13%)
5. house vacancy rate (5%)
6. prime age employment-to-population ratio (9%)

And this is the map. As you look, first think “blue” to see the areas that are thriving. and “yellow” for those that are not. Meanwhile, population is conveyed by intensity with darker hues representing more people and lighter, fewer:

For a second perspective, you can see below that there is a vast difference in economic and physical well-being between counties with a high score and those at the bottom:

Next, doesn’t the income component especially display a regional prosperity split?

And finally, do consider an historic lens. During the past 36 years, the Mideastern states, more than any other region, have boosted their economic and physical well-being:

Our Bottom Line: Human Capital

In eight pages of instructions for HQ2 hopefuls, Amazon says it could create (a whopping) 50,000 full time jobs. The pay? Exceeding $100,000 a job. The jobs? Many require human capital that is composed of technical talent.

And where is that technical talent?

Among the top metropolitan areas with tech jobs, the Washington, D.C. area is #3 and New York City is #15:

So, if we had a crystal ball that showed a future Vitality Index, I suspect we’d see stronger regions getting even stronger (and the unintended impact of HQ2).

My sources and more: It’s always nice when two separate topics converge as did this Hamilton Project/Brookings report and Amazon, here and here. Then, if you want to read onward, I recommend a second Brookings article on tech networks. However, if your time is limited, do go to the Amazon proposal form. Their needs are mind boggling.

Please note that several of today’s sentences were in a past econlife post.