Tech Giants Plant Flags in Established and Emerging Talent Hubs

Tech Giants Plant Flags in Established and Emerging Talent Hubs

After a yearlong search that saw cities compete for its favor, Amazon announced in November that it had picked two locations rather than one for its second headquarters (“HQ2”) project: the Long Island City neighborhood of Queens, New York, and the Crystal City area in Arlington, Virginia, a major suburb of Washington, DC. The choices proved controversial, as the tech giant had made a spectacle of courting many bidders that may never have had a chance, while both New York and Virginia are giving Amazon generous subsidies to set up shop in their states, despite the fact that these locales are strategically desirable locations for tech companies anyway.

While some observers had speculated that Amazon would pick an up-and-coming city in the US heartland, where the introduction of such a huge employer would transform the local economy, in the end, the choice came down to talent, and the New York and DC areas simply offered better access to talent than any other city Amazon was considering. (It’s also setting up a smaller operations center in Nashville, Tennessee — more on that later.) It’s no coincidence, Recode’s Jason Del Rey observed at the time, that the winning bidders were among the country’s leading tech talent hubs:

[W]hat do you see when you look at rankings of the top technology talent pools in the U.S.? Only two metro areas rank above the Washington, D.C., metro area: The San Francisco Bay Area, which Amazon never considered, and Seattle, the home of Amazon’s original headquarters. At No. 3, Washington, D.C., makes a lot of sense. Fourth is Toronto — but despite its booming tech scene, Amazon never gave any hints that it would seriously consider a big move across the border. Which brings us to No. 5 on the tech talent list: New York City.

Ultimately, Amazon decided it needed two cities — whether it always knew this or not is up for debate — to meet its hiring demands and to reduce some of the potential downsides that Seattle has experienced as a result of Amazon’s 45,000-employee footprint there.

Establishing these new headquarters will take years, the Wall Street Journal added this month, perhaps as much as a decade, because Amazon plans to do most of its hiring for them locally rather than relocate workers from its home base in Seattle. By the end of next year, the company plans to add 400 employees in Crystal City and 700 in Queens — out of an expected total of 25,000 in each city by 2028, assuming the e-commerce giant continues its trajectory of rapid growth.

Amazon’s decision underscores the importance of talent communities for major companies making strategic planning decisions with regard to location. While many workers in tech and other digitally-enabled professions can work remotely today, most organizations still prefer to recruit and base the bulk of their workforce in centrally located offices, so it pays to set up shop in a place where the talent you need already lives or would be willing to move.

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DC’s Initiative to Raise Tipped Minimum Wage Billed as Combating Harassment

DC’s Initiative to Raise Tipped Minimum Wage Billed as Combating Harassment

Last week, the board of elections in Washington, DC, approved a ballot measure for the upcoming primary election on June 19 that will ask voters whether to raise the minimum wage for tipped employees in the restaurant industry from its current rate of $3.33 per hour to match the capital city’s minimum wage for all other workers by 2026. Advocates of the measure are framing it as a way of protecting low-income workers, especially women, from harassment and abuse, the Washington Post reported:

[C]ritics of the split-wage system say some workers face intimidation and retaliation when they tell their bosses that tips came up short. They say low-income workers in the restaurant industry deserve the same predictable income as other employees. …

“In this Me Too moment, in this Time’s Up moment, we have to stand up for women and empower women and really call this two-tier wage system for what it is: a source of sexual harassment,” said Diana Ramirez, director of the Restaurant Opportunities Center D.C., which is sponsoring the ballot initiative.

“If you know that you are getting a base wage from the employer, and a customer is acting inappropriately with you, you don’t have to put up with that behavior anymore to make a good tip,” she said.

Restaurant owners and some workers who earn much more than the minimum wage on the basis of tips oppose the measure, saying it will eat into restaurants’ already thin profit margins and force them to raise prices, cut jobs, and perhaps abandon tips altogether in favor of a flat hourly wage.

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DC’s Millennials Moving on to More Affordable Cities

DC’s Millennials Moving on to More Affordable Cities

In the wake of the Great Recession, young professionals migrated to Washington, DC and its surrounding suburbs in large numbers, attracted by a growing tech scene and the relative stability of a local economy anchored by the federal government. But now that job growth has picked up again in the rest of the country, many of the millennials who led DC’s transformation over the past decade are moving away, eschewing the capital’s high living costs for opportunities in more affordable cities, Aaron Gregg reported at the Washington Post on Saturday:

A new analysis by George Mason University researchers finds that, among those already in the United States, more people are leaving the region than arriving for the first time since the Great Recession. Millennial deserters — ages 20 to 29 — are one factor. But another big one is baby boomers leaving to begin retirement life elsewhere. Families and the unemployed are also going. …

The current exodus could complicate efforts to diversify the region’s mix of business and wean it off its dependence on the federal government. In recent years, Washington has persuaded large corporations like Nestle and Yelp to set up offices here, and local leaders are now mobilizing to lure ­Amazon.com’s second headquarters here.

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DC City Council Passes Controversial Family Leave Bill

DC City Council Passes Controversial Family Leave Bill

A bill to provide guaranteed paid parental, caregiving, and sick leave to employees in the district passed in the Washington, DC, city council on Tuesday over the objections of Mayor Muriel Bowser and business groups, the Washington Post’s Peter Jamison reports:

The bill, which passed by a veto-proof margin of 9 to 4, guarantees eight weeks of paid time off to new parents, six weeks to workers caring for ailing family members and two weeks of personal sick time. To pay for it, the city will levy a new 0.62 percent payroll tax on employers small and large to generate $250 million annually, which will be distributed by a new arm of the city government.

The tax triggered an intense lobbying campaign in the past week, led by major employers in the city as well as the Greater Washington Board of Trade, the D.C. Chamber of Commerce and the Federal City Council. Those groups argued that the city should simply mandate that employers provide paid leave and allow them to decide how to finance it.

The mandate, while popular among the public, has been fiercely debated since it was introduced last year, particularly concerning how much it would cost and who would pay for it. Even some supporters of the bill, Jamison notes, are unsure of how successful it will be:

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DC Embraces $15 Minimum Wage

DC Embraces $15 Minimum Wage

The Washington, DC city council voted on Tuesday to raise the city’s minimum wage to $15 an hour by 2020, Buzzfeed’s Cora Lewis reports:

The raise was opposed by many in the business community, with the D.C. Chamber of Commerce releasing a poll showing half of all business owner respondents saying they would reduce their payroll and eliminate jobs if a $15 minimum was approved. Some labor advocates also expressed disappointment in the bill, saying it didn’t go far enough. The City Council rejected proposals to phase out rules that allow tipped workers to be paid at levels below the minimum wage.

D.C. employers may pay tipped staff, such as servers and nail salon workers, less than $3 an hour, with the expectation that tips will make up the rest of their wages. When business is slow and tips are scarce, employers must pay their workers the difference between their paychecks and the district’s minimum. But a 2010 White House Study found that employers often fail to make employees whole, and in 18 states, the tipped sub-minimum wage is as low as $2.13. … Under the law approved in D.C., the district’s tipped sub-minimum will rise to $5.00 per hour from its current $2.77 and then be indexed to inflation.

Aaron Davis at the Washington Post observes that the measure will create a significant disparity between the capital and neighboring Virginia, which adheres to the federal minimum of $7.25 an hour. That, critics assert, will virtually guarantee an exodus of jobs from the district:

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Nobody Knows What DC’s Family Leave Mandate Will Cost

The public support for a proposal to mandate 16 weeks of paid family leave for all employees in Washington, DC, depends on how much it will cost, and who will be footing the bill, according to a Washington Post poll published in December. But determining the cost of the plan, which would cover both new parents and those who need to care for elderly relatives, is proving difficult for the city. In fact, as the Post reports, a series of conflicting cost estimates has now thrown the feasibility of the law into doubt:

Mayor Muriel E. Bowser’s administration released the first of the reports, a study funded by the Obama administration. And to the delight of proponents, it showed that salaries of every worker in the District who would take paid time off for the birth of a baby or to care for a dying relative could be covered for about the cost of a proposed 1 percent salary tax on employers.

Within a few hours, however, it wasn’t clear that the lawmakers believed those figures, which found that the initiative could cost $300 million.

Aides to Bowser (D) distanced the mayor from the study funded with a Department of Labor grant. A Washington-area business group presented a competing study to the D.C. Council, claiming that the costs would be north of $700 million, or 150 percent higher. Meanwhile, Jeffrey DeWitt, the District’s chief financial officer, said the total price tag could top all business taxes collected annually in the city, but that still may not be enough to cover costs. And in perhaps the most stunning moment of the debate, a top researcher at the left-leaning Urban Institute said that even D.C. business owners had underestimated the costs. The price could top $1.3 billion a year, he estimated, or five times the cost that the researchers funded by the Obama administration had concluded.