Amazon: The Thread | 5,000 Jobs | 1M SQFT in Nashville Yards

[PruneTracy]

1 minute ago, Armacing said:

Why do you think so?  I have observed that recent rural economic development efforts have focused on manufacturing, some of it quite sophisticated.  Consider the new Nokian plant in Dunlap or Wacker Chemie in Charleston.  Are you against having manufacturing as part of the state's economic portfolio, or are you saying manufacturing should be located right in the city?

1 minute ago, DDIG said:

That's right. If it is money pumped into a rural area to artificially keep it alive that's bad. If it is equipping them with Broadband so more business can be done or attracting manufacturing investment, etc. - that's good. 

Not @Rockatansky obviously but the general problem is the mismatch of the area to the expected availability of employment.

Lots of digital ink gets spilled on this forum about TDOT and their four-lane divided highways to nowhere. The vast majority of these have economic development in their purpose and need statements. While I don't mind them (mostly because I get paid to plan and design them) many question their ROI.

But the more nuanced question is whether encouraging small factories, distribution centers, etc. spread out across the state is a healthy growth model. Is it prudent to set up a system where geographically-isolated communities rely on one employer for their livelihood? What happens when these businesses close or relocate, as they frequently do? Can workers whose skills revolve around manufacturing, etc. pivot to the jobs remaining in a rural area after the one factory packs up and leaves town? The state of many small towns in Tennessee (and in particular coal country) suggests otherwise.

The hard truth is that many of the jobs being promoted by these efforts are better suited for more urban areas. For any community you need a critical mass of both employees and employers where one is not put out if there is a shortage of the other. This critical mass is smaller for many small-town businesses (restaurants, banks, etc.) that only employ a handful of people, but it's larger for industrial businesses that often have hundreds of workers. The critical mass isn't necessarily Nashville-sized but it's not, say, Linden-sized either. I hate to see people forced to leave their homes but it's a reality of the industrial and post-industrial world.

Of course the other side of this is that rural residents still play a vital role in the state's economy. Agriculture accounts for ~15% of Tennessee's GDP (which is about the same as Nashville's contribution as a whole). People on here and elsewhere like to turn up their noses at the serfs out in the hinterlands but these are the people who are growing your food, mining the materials you need to build cities, etc. They're citizens of the state just as much as any urbanite and they're suffering too: low economic mobility, opioid epidemics, etc. Again, look at coal country. The state can't ignore them just because there's a bunch of sexy towers going up in the capital.

[Tennessine]

6 hours ago, Rockatansky said:

Throwing good money after bad IMO.

I disagree. Lot of manufacturing jobs are based in rural areas, which is a massive part of Tennessee's economy and a significant reason why we are seeing so much growth in Nashville itself. Just yesterday, Hubner Manufacturing announced it will open a new plant in Dunlap, which is in the middle of nowhere (closest metro is Chattanooga). 

3 hours ago, PruneTracy said:

Of course the other side of this is that rural residents still play a vital role in the state's economy. Agriculture accounts for ~15% of Tennessee's GDP (which is about the same as Nashville's contribution as a whole). People on here and elsewhere like to turn up their noses at the serfs out in the hinterlands but these are the people who are growing your food, mining the materials you need to build cities, etc. They're citizens of the state just as much as any urbanite and they're suffering too: low economic mobility, opioid epidemics, etc. Again, look at coal country. The state can't ignore them just because there's a bunch of sexy towers going up in the capital.

Excellent analysis, PruneTracy. A lot of the complaints I read on this board are lodged by edgy Millennials blaming all of Nashville's problems on everybody else, especially rural Tennesseans. I'm glad somebody here knows who does the dirty work for some of these snooty yuppies.

 

And yes, I understand this is Urban Planet. Don't worry, I don't like suburban sprawl and wasteful state spending either.

[titanhog]

3 minutes ago, nativetenn said:

I disagree. Lot of manufacturing jobs are based in rural areas, which is a massive part of Tennessee's economy and a significant reason why we are seeing so much growth in Nashville itself. Just yesterday, Hubner Manufacturing announced it will open a new plant in Dunlap, which is in the middle of nowhere (closest metro is Chattanooga). 

I agree.  So many try to divide us into urban, suburban and rural...but in all actuality, all 3 serve a purpose in supporting one another....and are an extension of one another.  

[Armacing]

3 hours ago, PruneTracy said:

But the more nuanced question is whether encouraging small factories, distribution centers, etc. spread out across the state is a healthy growth model. Is it prudent to set up a system where geographically-isolated communities rely on one employer for their livelihood? What happens when these businesses close or relocate, as they frequently do?

Honestly, I think that *is* the business model.  Manufacturers want to locate in a place where they are the only game in town because it (A) means they aren't completing for workers with another business, so wages stay low, and (B) they keep the union out because the implied threat is that the company will leave the locals high-and-dry if they start to agitate for higher wages/fewer hours.  I could make the argument that manufacturing flight to the hinterlands is a mirror of upper-middle class flight to the suburbs, except instead of running from public schools the factories are running from union organizers.  There's also the fact that nobody wants to live next to a factory, so they locate in places where they get minimal blow-back from nimby's.  For the average nimby, a factory is barely one notch above a landfill.

[grilled_cheese]

15 hours ago, nativetenn said:

I disagree. Lot of manufacturing jobs are based in rural areas, which is a massive part of Tennessee's economy and a significant reason why we are seeing so much growth in Nashville itself. Just yesterday, Hubner Manufacturing announced it will open a new plant in Dunlap, which is in the middle of nowhere (closest metro is Chattanooga). 

Excellent analysis, PruneTracy. A lot of the complaints I read on this board are lodged by edgy Millennials blaming all of Nashville's problems on everybody else, especially rural Tennesseans. I'm glad somebody here knows who does the dirty work for some of these snooty yuppies.

 

And yes, I understand this is Urban Planet. Don't worry, I don't like suburban sprawl and wasteful state spending either.

I understand you're upset because you're from buttholeville but there is not need to call other users names.  I'm sure we would have no issue with the hill people if they pulled their own weight and didn't introduce bills that named their fave religious snake as the state animal or recognize their fav benzo on the house floor.

[smeagolsfree]

Come on guys, am I going to have to drop the hammer! Be nice and treat each other the way you would want to be treated.

 

Besides lets get this back on topic AMAZON!!!!!!

[Tennessine]

1 hour ago, grilled_cheese said:

I understand you're upset because you're from buttholeville but there is not need to call other users names.  I'm sure we would have no issue with the hill people if they pulled their own weight and didn't introduce bills that named their fave religious snake as the state animal or recognize their fav benzo on the house floor.

Pick a Sonic

58 minutes ago, smeagolsfree said:

Come on guys, am I going to have to drop the hammer! Be nice and treat each other the way you would want to be treated.

 

Besides lets get this back on topic AMAZON!!!!!!

It's only one user... Everyone sees that.

[titanhog]

That Sonic line makes me laugh eveytime I see it! 

[WebberThomas4]

 

[markhollin]

Amazon says that 8 of every 10 workers it will hire for the Nashville hub will make no less than $67,000 per year.  The average salary will be $150,000.

Metro Council is expected to vote next week on the $17.5 million incentive plan for Amazon.

More behind the NBJ paywall here:

https://www.bizjournals.com/nashville/news/2019/03/14/amazon-expects-to-fill-its-nashville-hub-with-high.html?iana=hpmvp_nsh_news_headline

 

[markhollin]

Amazon will invest $800,000 to endow a computer science professor position at Tennessee State University's Avon Campus, in an effort to start establishing its own pipeline of diverse prospective employes. This campus is next door to the site of Amazon's twin towers at the north end of Nashville Yards.

Metro filings also disclosed Amazon will host "two job fairs or recruiting events in partnership with the local universities annually, including HBCUs [historically black colleges and universities], focused on diverse hiring over the initial two years. … [and] are also dedicated to hiring veterans and military spouses, as the men and women who have served our country in the armed forces bring invaluable experience and perspective to our fast-paced work environment."

More behind theNBJ paywall here:

https://www.bizjournals.com/nashville/news/2019/03/14/amazon-paying-for-local-professor-to-begin.html?ana=twt

[nashvylle]

That is awesome! 

[DDIG]

And look at these anti-5000 tech jobs idiots who can't read a chart 

 

Edited March 15, 2019 by DDIG

[bigeasy]

I kind of see what they are saying, and I am a bit skeptical on the salary part. Especially how it is being publicized. I think lots of people hear that # and think that if they get a job there then they will be making $150K. If I did my math correctly, the median wage for those positions is $68, 508.80. To get that average to $150K you have to increase the wages by 120% across all jobs. I just can't see Amazon doing that. Why would they want to pay that much above the market average?  At first I was thinking that maybe just the high paying jobs in management and legal will be the reason but those account for such a small % of jobs that their wage increase would have to be astronomical to impact the average. Maybe they are including Jeff Bezos salary of like $123M into that bucket haha.

 

Maybe I am missing something obvious?

[Craiger]

2 minutes ago, bigeasy said:

I kind of see what they are saying, and I am a bit skeptical on the salary part. Especially how it is being publicized. I think lots of people hear that # and think that if they get a job there then they will be making $150K. If I did my math correctly, the median wage for those positions is $68, 508.80. To get that average to $150K you have to increase the wages by 120% across all jobs. I just can't see Amazon doing that. Why would they want to pay that much above the market average?  At first I was thinking that maybe just the high paying jobs in management and legal will be the reason but those account for such a small % of jobs that their wage increase would have to be astronomical to impact the average. Maybe they are including Jeff Bezos salary of like $123M into that bucket haha.

 

Maybe I am missing something obvious?

The city should definitely ask for Median salary numbers for these incentives. As you sort of point out, how much does it actually help our city if a single person with a several million dollar salary "moves" here vs hundreds with 6 figure salaries? 

I wonder if Amazon is spreading around the "home office" of each of it's top execs to make these numbers work out nicer. 

[titanhog]

There was an article the other day stating, with quotes, from an Amazon rep that said the pay would average out to $150k across the board...with something like 80% of the jobs being over $68k (I think).  That means there will have to be a LOT of jobs into the $200k+ range...right?

[Craiger]

7 minutes ago, titanhog said:

There was an article the other day stating, with quotes, from an Amazon rep that said the pay would average out to $150k across the board...with something like 80% of the jobs being over $68k (I think).  That means there will have to be a LOT of jobs into the $200k+ range...right?

Or like bigeasy said, just one 100 million dollar salary to pull the average way up. I know a 100 million dollar salary is a bit of joke, but even just a couple low millions executives would skew the averages. Again, this is why median is a much more valuable measurement from a data set like this. 

[bigeasy]

Exactly.

 

 Say you have maybe 20 management positions in the $10M range. This alone bumps the average from $68K to $108K. Then I am assuming their number is what the average will be once all 5,000 positions are filled, which was a 7 year rollout??  So add in maybe a 3% cost of living increase each year and the average goes from $108K to $133K. Getting real close to that $150K number without actually doing anything except adding some leadership positions.

[dmillsphoto]

6 minutes ago, bigeasy said:

Exactly.

 

 Say you have maybe 20 management positions in the $10M range. This alone bumps the average from $68K to $108K. Then I am assuming their number is what the average will be once all 5,000 positions are filled, which was a 7 year rollout??  So add in maybe a 3% cost of living increase each year and the average goes from $108K to $133K. Getting real close to that $150K number without actually doing anything except adding some leadership positions.

Thing is, nobody in this industry makes that kind of money. Hell, where I work (Fortune 50 tech) the top 8 people whose name isn't the company name pull a salary less than $2M (more with bonuses, but still). Will there be some of the upper echelon making $300-500k? Yes. But nobody will pull in a 7 figure salary at the Nashville campus.

[Mr_Bond]

The answer probably lies somewhere in the world of math and statistics.  When a data set includes some extreme values, the median gives a clearer picture of the "middle" than the mean (average).

Also note that Amazon has not said how their jobs compare to those in the broader categories listed.  It's possible that some of their jobs fall into the stated categories but are at the higher end.

Here are some definitions:

Mean
The mean is the average of all numbers in a data set. For example, in the data set {1,1,2,3,6,7,8}, add the total and divide by seven, the number of items in the data set. The calculation would show that the average is four.

Median
The median is the middle number in the data set. For example, given the data set {1,1,2,3,6,7,8}, the median is three because there are an equal amount of numbers greater than three and less than three.

[titanhog]

Yeah...I don't think it will go over well if we soon find out that there will be 4000 jobs at $68k...and the rest get us up to the $150k average somehow.  Not that $68k is anything to sneeze at (a lot of people would love to make that much)...but it wouldn't definitely change a few minds about what we're getting.

[nashvylle]

2 hours ago, titanhog said:

Yeah...I don't think it will go over well if we soon find out that there will be 4000 jobs at $68k...and the rest get us up to the $150k average somehow.  Not that $68k is anything to sneeze at (a lot of people would love to make that much)...but it wouldn't definitely change a few minds about what we're getting.

A lot of the complaints are Nashville residents are being priced out of their city. $68K is a good salary in Nashville, but you're certainly not a millionaire. 

StandUp Nashville's main concern is affordability. If $0 incentives were paid by city or state to Amazon, they still would be complaining about traffic and lack of affordable housing. 

Amazon in Nashville opens up a tech talent pool the city needs. Their $800K grant to TSU is a great start for creating and maintaining not only a tech pool, but a diverse tech pool.

Let the private sector work with the city to obtain enough housing. Minneapolis is a good example. 

Edited March 15, 2019 by nashvylle

[timmay143]

{23, 24, 25, 26, 27}

{23, 24, 25, 50, 75}

Same median of 25, different averages: 25 vs 39.4

2 hours ago, titanhog said:

Yeah...I don't think it will go over well if we soon find out that there will be 4000 jobs at $68k...and the rest get us up to the $150k average somehow.  Not that $68k is anything to sneeze at (a lot of people would love to make that much)...but it wouldn't definitely change a few minds about what we're getting.

According to Mark's post above

21 hours ago, markhollin said:

Amazon says that 8 of every 10 workers it will hire for the Nashville hub will make no less than $67,000 per year.  The average salary will be $150,000.

Then 4,000 employees will make $67k/yr or ABOVE.

[tragenvol]

Rubbing my eyes at folks scoffing at $67K salary....especially if most of these jobs are entry level or require limited experience as these are would appear to be brand new positions.  My first job out of college, a true entry level position, paid much less.

[Nashvillain]

https://www.citylab.com/equity/2019/03/nashville-jobs-amazon-hq2-salary-do-better-law/584983/