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On graft, the State is a trough for those in power to gorge

By Maina Kiai | March 3rd 2019

Right across my office building at the City University of New York Law School, where I am currently based, lies the Citi building which was to be the temporary home of Amazon.com Inc. Amazon is one of the world’s wealthiest companies, and CEO Jeff Bezos is the world’s richest man.

But it is no more after New Yorkers resisted and questioned the arrangement including how the company and city would deal with the increased stress on facilities such as transport, water, sewage, and the attendant rising costs of housing in the US’s most expensive housing market.

In 2017, Amazon decided it needed to get a second home outside its Seattle, Washington headquarters and invited cities across the US, Canada and Europe to bid to host it. The carrot proffered to cities was the chance to create tens of thousands of jobs, generate millions in income tax from these employees, and some bragging rights as one of the homes of Amazon.com.

Anyone who has spent time in countries that use physical addresses -- as opposed to P.O. Boxes -- will confirm that it is almost impossible to avoid Amazon. It not only acts as an internet supermarket, stocking and delivering almost anything to your doorstep, it also now has a television and internet service that is quite popular. Amazon has driven bookshops out of business, and threatens traditional supermarkets and grocery stores with extinction as well. And it has innovated with gadgets such as the Alexa system that is becoming ubiquitous in many homes and offices.

There is no doubt that Amazon’s innovation and creativity was been widely successful and that it certainly fulfills a huge market role and niche. It is this power that has allowed it to grow into a behemoth, with the ability to dictate terms to governments.

To honour New York with its presence, Amazon was to get about US$ 3billion (Sh300 billion) in subsidies and benefits, and it claimed it would create at least 25,000 jobs, with an average salary of US$ 150,000 (Sh15 million) per year. But the math behind these figures was not revealed in this deal that was negotiated opaquely between the company, the Governor of New York and the Mayor of New York City. Nor was it clear how many of the top jobs would be reserved for New Yorkers given the subsidies.

That notwithstanding, and given the company’s business model, a vast majority of the jobs were bound to be manual, and in packing and logistics that would be paid at minimum wage which is now $15 per hour in New York state. That means that the top 1 per cent of staff in executive positions would be getting paid in the millions to arrive at an average of $150,000, further exacerbating the already horrendous income inequality in New York.

Moreover, at a hearing of the local council, Amazon officials stated that they would actively discourage workers to unionize, meaning that profits would be kept high on the backs of relatively poorly paid workers without the ability to agitate and organise for better conditions.

Now, it is not that Amazon is doing badly. Last year, the company declared taxable income of US$ 11.2 billion (Sh1.12 trillion, which is more than a third of Kenya’s budget for this year). This is not its revenues. This is taxable profit after allowable expenses are deducted.

But despite this uncountable income, Amazon paid zero, zilch, nada in federal taxes! In fact, the company got a sizeable refund after the Trump tax cuts of 2018!

Let me be clear: Any company, NGO, individual that creates or sustains jobs is critical to any economy in these trying economic and political times. But it is essential that we move beyond creating jobs that do little than allow a significant portion of society to just survive, while generating unconscionable profits for a few. It is these inequities that create anger, frustrations and marginalisation, and which ultimately tempt revolution.

It is time that we focused on jobs that dignify the lives of the poorest, most vulnerable and weakest in society. And for this we need to provide the space and tools for the workers themselves to organise, mobilise and agitate within a structured system that may be disruptive but is geared to be peaceful.

It always baffles me that a country as rich and with an economy as massive as the US can be so blind, so deaf and so immune to the plight of the poor, whose numbers grow exponentially each day. Even people in the middle class are often a paycheck or two -- or a medical bill or two away -- from homelessness and poverty.

If there is one thing that Kenya should avoid, it is running an economy in this American way that sacrifices humanity at the altar of unrestrained profits without regulation and controls. But sadly, as long as Jubilee reigns over us, our economy will forever remain one in which the state is seen as a trough for those in power to gorge on as the daily revelations of corruption show.

- The writer is former KNCHR chair. [email protected]

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