In a time of growing worries about wealth inequality and the yawning gap between the haves and have-nots, news that Amazon is opening an eight-floor homeless shelter inside its Seattle headquarters sounds downright heartwarming. 

But even a quick dive into the backstory of the company's history with initiatives to reduce homelessness in its hometown makes it clear things are a lot more complicated than just 'billionaire businessman does his local community a solid.' 

A tax too far

Seattle may be booming thanks to companies like Amazon and Microsoft, but that success comes with its own set of problems, namely a 42 percent rise in rents between 2007 and 2017 and, as a result, a spiraling homelessness problem. More than 10,000 people bed down on Seattle's streets each night. 

Moving to address the crisis, the Seattle city council introduced a series of initiatives including a $15 minimum wage in the city (its knock-on effects are hotly debated by economists), as well as spending tens of millions combating the problem. But when the city implemented a new tax of $275 per employee on companies with over $20 million in revenue to help pay for the fight against homelessness last year, Amazon stepped in. 

"Amazon and other major employers in the city vocally opposed the tax," reported Vanity Fair's Maya Kosoff at the time. "The company played hardball with the city council, saying that while the council considered the tax, it would temporarily pause construction on a high-rise near its headquarters in protest." 

In response to the pressure campaign from the giant company with a market cap of more than $800 billion and founder worth $112 billion (even after he split his fortune with his ex-wife in the divorce), the city called off the tax. 

"The onus is very much on those who fought so hard against this solution to identify a better one," Lisa Daugaard, a member of a Seattle city task force, commented in the wake of the failed tax effort. "Or admit they're O.K. with the city having shanty towns and favelas in our public spaces indefinitely."

A better solution? 

Jeff Bezos and Amazon have responded. First, Bezos pledged $100 million to fight homelessness, offering unusual no strings attached grants to charities across the country working on the problem. Then Amazon offered to turn eight floors of a building at its headquarters into a temporary homeless shelter run by charity Mary's Place, even covering rent and utilities for the organization and providing pro pro bono legal help to residents.  

The new facility is about to open its doors. You can check out plenty of images over at Business Insider. But before you start feeling too warm and fuzzy about Bezos and Amazon, remember how hard they fought publicly funded solutions to this problem. 

As Vox has pointed out, Amazon's approach suggests that Bezos, "like other billionaire philanthropists before him, think the problems of homelessness, poverty, and displacement should be solved by a network of donors and nonprofits -- and not by elected officials."

Bezos has even said as much outright: "If you have a mission you can do it with government, you can do it with nonprofit or for-profit," he has been quoted as saying

Some small government fans will no doubt agree, but as the scale of the inequality problem gets larger, it becomes harder to imagine that anti-tax billionaires like Bezos (but not Bill Gates or Warren Buffett) will do enough self-sacrificing to fix the problem without government involvement. 

After all, a homeless shelter is just a band-aid. The real cure is building more affordable housing and helping people train for jobs to pay for their own place -- just the sort of knotty, long-term, market unfriendly problems government exists to help solve. 

All of which means that, philanthropic window dressing aside, billionaires and behemoth companies that fight even modest tax rises appear to be fine with living in a society where thousands of their fellow citizens sleep on park benches. Remember that before you are too touched by the announcement of their latest charitable initiative. 

Published on: Nov 12, 2019
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