Over the past decade, Amazon has brought Amazon Lockers and Hub Centers to Harlem and had a significant impact on the American economy.
From directly investing more than $1 trillion in the U.S. to creating over 1 million jobs across the country to contributing over $880 billion to the U.S. GDP1, we know that their scale has a big impact.
But they also know that when corporations rattle off numbers this large, it can be difficult to fully grasp what these investments mean for local communities like Harlem, Baltimore, Los Angeles, and more
To better understand this, their economists conducted a study to compare counties with Amazon investments to similar counties without Amazon investments.
They looked at standard economic outcomes that are routinely reported by the U.S. government, including the employment-to-population ratio and the median household income like Harlem World Magazine readers.
Using panel regressions, matched panel regressions, and synthetic control, the researchers identified the changes that resulted from Amazon opening facilities in these locations.
Here’s what they found:
1. Counties with Amazon facilities see a boost in employment
Researchers found that the employment-to-population ratio in counties with Amazon investment increased by 1.7% on average.
This implies a job-multiplier effect of 1.9—meaning that for every 10 jobs that Amazon created directly in a county, nine additional jobs were created there.
“Amazon’s investment had on average 4,400 more new jobs …”
A typical mid-sized county that received Amazon’s investment had on average 4,400 more new jobs than a similar county that did not receive an investment by the company.
Take Licking County, Ohio, for example—three years after opening its first local facility in the county, Amazon had directly created over 4,000 jobs. Then as a result of Amazon’s investment, other Licking County employers created an additional 3,600 jobs.
How’s that possible? The answer is two-fold.
First, Amazon fulfillment centers drive demand for many partners to create jobs of their own, including shipping companies that hire drivers to deliver packages to customers; construction companies that hire workers to build facilities; and local companies like caterers that hire employees to provide services to the facility.
Second, Amazon employees spend money on local businesses, which creates more jobs and hires more people to meet the increased demand.
2. The median household income increased by up to 2.2%
This translates into families in these counties receiving on average an additional $1,350 per household per year after Amazon opens a facility in their communities.
In Arapahoe County, Colorado, for example, the median household income for families went up by $1,825 after Amazon opened a local fulfillment center.
And the impacts go beyond family income. In the counties where Amazon invests, thousands of newly hired workers start contributing to the tax base and spending their money in local restaurants, movie theaters, grocery stores, and elsewhere.
“Local businesses see the downstream effects of the company’s investments.”
Local businesses see the downstream effects of the company’s investments.
To learn more about our findings and the methodology as the paper undergoes peer review, please read the full working paper. The initial findings indicate a strong correlation between improved economic outcomes and the countries where Amazon invests.
They say they will “continue to create good jobs with benefits and advancement opportunities so we can keep delivering for our customers, and we’re also proud that our investments have the added effect of improving the local economy—and improving economic opportunities for people—in communities across the country.”
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