Mississippi Gov. Tate Reeves has recently announced an economic development deal that soars past the state’s previous investment record. The new deal will bring two Amazon Web Service locations into Madison County, a project totalling $10 billion. Reeves boasts that 1,000 jobs will be created by the new job sites. The deal will also benefit companies like Entergy, which will power the Amazon centers.
We must ask ourselves two questions before accepting the deal at face value: How will this project affect taxpayers, and how will this affect Mississippians?
The answer to the first question is a brief one: $44 million taxpayer dollars will be spent on the creation of this large project, but Bill Cork, executive director of the Mississippi Development Authority, says this money would be made back in as soon as 10 months after the implementation of the project.
The second question is unfortunately a much more nuanced one; we will not truly understand the impact to Mississippians until the development project has come to fruition.
Reeves claims that 1,000 jobs will be created in two new locations, but it has not been made clear how many of these jobs will be filled by Mississippians. When passing the bill to clear the project, Democrats in the state legislature attempted to write in that 25% of the new jobs created must employ Mississippians. However, Republicans shot down the proposal and passed the bill without the addendum. As it stands, there is no guarantee that these new jobs will be filled by Mississippi workers.
Another alarming factor is the misleading efficiency of mega-tech projects like this one. Some studies have shown that while big tech companies promise the moon, they deliver little in terms of employment and economic stimulus to their host state. The best jobs are usually taken by outsiders.
With this in mind, Reeves’ new project likely will not assist in retaining STEM students with relevant degrees, thus brain drain will continue. This sort of project may not be the best for fostering sustainable growth in the state in the first place.
Think of it like this: The new project creates 1,000 jobs with the snap of a finger, jobs that require (or prefer) extensive experience in the field and a degree from a renowned STEM university. There are not many people who fit either of those descriptions in Mississippi.
These are the major problems with the Amazon project that need to be addressed.
It is easy to get lost in the weeds talking about the economic input and output of a project, but we must take an honest, comprehensive look at the deal and how it affects real Mississippians, all without being dazzled by meaningless buzzwords like “big tech” and “job creation.”
Reeves’ claim that the project will bring unprecedented economic development should be carefully examined before Mississippians fully buy into the deal. For decades, Mississippi was overlooked by large corporations. These big businesses asked themselves, “Why would we invest millions of dollars into an underdeveloped state?” Though the tide has begun to turn in recent years, I wonder whether or not this is a result of lawmakers’ eagerness and naivety.
This, however, is not to say that there are no benefits from the deal. Obviously, increased employment and economic stimulation will come from the project (although to what degree is debatable), but school districts in Madison County will also benefit. It is estimated that $30 million will be given to the C-rated Canton school district and $10 million given to the Madison County school district. Also, improved infrastructure is touted as a benefit of this project, which will indirectly create more jobs.
It can be easy to poke holes in such a large economic development project, but the important takeaway is that this plan is a step in the right direction. Economic development in Mississippi has long been the basis of Reeves’ political platform, and he is taking steps to realize it.
Will Amazon be our savior? Time will tell, but this is no doubt an important time in Mississippi’s history. The costs and benefits of Amazon’s new developments will help determine how the state’s comeback story is told.
David Ramsey is a public policy leadership major from Madison, Mississippi.
