Right-leaning commentators such as Connor Sen and Ben Winck are heralding the future of Amazon “company towns” as a way to lift the working class. Left-leaning commenters, particularly on social media, are raising the specter of 19th and 20th century coal towns (cue “Sixteen Tons” by Johnny Cash) where employees get paid just to give the money back to the company because they have to shop at company-owned stores and live in company-owned housing. Amazon’s recent union-busting campaign hasn’t exactly helped that image.
The reality is somewhere in between. The hope is that new Amazon (and Walmart and Chewy) warehouses and fulfillment centers, popping up generally in more rural areas but with easy interstate access, will prompt housing developments and other businesses (such as grocery stores) to build up around them.
Sen, in his Bloomberg op-ed, describes an ideal “factory town”: “People can live close to work with shorter commutes — plus the possibility of employer-provided shuttle buses — when their jobs are in a cheaper, less-crowded part of a metro area. If there’s a push to increase density by building affordable apartments or townhomes for workers, there’s less likely to be wealthy homeowners mobilizing to stop it, since those sorts of homeowners probably will live closer to the city core. As wages rise and more jobs are created at warehouses and distribution hubs, you’ll get a secondary increase in economic activity as amenities like retail and dining are built close by to appeal to the workforce.”
The idea of the Amazon (or Walmart, etc.) company towns has some merit, but there are so many ways it can go wrong.
What Sen describes doesn’t sound like the coal towns of West Virginia’s past, but it does sound like the former boom towns of the Rust Belt: Entire communities built around a singular employer that then disintegrate into poverty when the company decides to take its business elsewhere.
Amazon and Walmart are both multi-billion dollar companies, but it sounds like the only investment either company would put in is the creation of the warehouse; all the other infrastructure — houses, roads, water, electricity, etc. — would have to be bought and paid for by someone else. And if — or, perhaps, when — the company finds an opportunity to make more money at a different location, it will have no qualms about picking up stakes and leaving the community behind.
Of course, it could go the other way. Amazon or Walmart fronts all the money for the houses, roads, stores, health care centers and so on. (Look up Disney’s Celebration development to see how such an endeavor might fail.) Then we may very well have a modern-day coal town.
The key will be to strike a balance between private and public investment. Amazon or Walmart should front some of the cost for basic infrastructure, but the company must not be permitted to own the utilities or necessary amenities. The town will also need its own governing body, separate from the company, and municipal rules. In addition, there must be enough job opportunities in or near the town to sustain it if the warehouse ever closes, or we’ll be looking at a new Rust Belt.
It’s a curious idea, this new iteration of the company town, that can either be a resounding success or a devastating failure that just repeats the mistakes of the past.
