Progressive-Democrat strategist and pollster Doug Schoen is worried about new rumors that Amazon might pull out of its agreement to relocate a part of its HQ2 in New York City.  He’s hanging his hat on the commitment from Amazon to produce 25,000 jobs at an average salary of $150,000 per year.

It would be a “disaster for the city,” he wrote in the Fox News op-ed, for Amazon to pull out.

Burdened by a shrinking tax base, crumbling infrastructure, and a lack of good-paying middle-class jobs for the future, New York City needs innovators like Amazon.

Or, perhaps, New York City wants Amazon’s money.

Regardless, Schoen seems to be missing some important costs to New Yorkers in the deal currently in place between New York City and Amazon.  Immediate costs include

• tax credits equal to $48,000 per new job—assuming new jobs by amazon could be measured
• $1.5 billion in direct subsidies for Amazon

Potential additional costs include

• $897 million through New York City’s Relocation and Employment Assistance Program
• $386 million through a partial property tax abatement program
• depending on the extent to which Amazon relies on renewables, additional credits through the New York State Energy Research and Development Authority

In return, Amazon committed to providing over the first 10 years 25,000 new jobs at an average annual salary of $150,000—high-paying jobs.

There are unaccounted-for costs in this arrangement, though.

• that sharp influx of high-paying jobs will create demand for limited-supply items like homes and groceries that will inflation-price others—not just locals—out of those things. Aside from the small businesses and mom-and-pop businesses and their limited expansion opportunities, there’s little physical room left to build more, to increase supply of houses, business buildings, and so on.
• the influx of those 25,000, along with the office buildings and the commuting and shipping traffic associated a business expansion of this size will sharply increase demand on utilities, public and private transportation, and other infrastructure—which, as Schoen has already noted, is crumbling and unable to handle today’s demands
• locals—businesses and residents, and what’s left of Schoen’s dwindling middle class alike—don’t get those property tax abatements. Guess who will pay, at least partially, for those abatements

And, in the end, tax incentives rarely get paid back in contracted for outcomes; there usually is a net loss to the incentive-granting jurisdiction.

This isn’t a good deal for New York City, unless it’s looking to replace those folks with below-middle-class jobs with a better sort of families.