The ‘Amazon Effect’ and the Gender Wage Gap


The battle to land Amazon’s second home is shaping up to be one of the fiercest competitions to lure a corporate headquarters in modern history. From serious incentives like massive tax breaks to headline grabbing stunts like offers of bear wrestling and giant cacti, it’s safe to say cities are pulling out every stop imaginable to attract the online retailer.

Nearly 240 cities in all but 7 states nationwide have set forth the bids for Amazon’s HQ2, and it’s no wonder why. The online retail behemoth is planning to bring a $5 billion construction budget for its new headquarters to the chosen city, along with 50,000 jobs with average annual salaries exceeding $100,000, and that’s just the start. Civic and business leaders making their pitch to Amazon need look no further than Seattle to see the additional benefits of attracting the company. Since 2007, the company has virtually transformed Seattle, investing in everything from local non-profits to new transportation initiatives to sustainable energy. According to Amazon, more than 53,000 additional jobs have been created in the city as a result of the company’s direct investments.

Amazon’s new “home away from home”—wherever that may be—will also likely laud the company’s efforts to bridge the gender pay gap. Despite rollbacks of Obama era regulations like the Equal Pay Pledge, the company has publicly boasted a nearly equal pay for men and women who hold the same jobs. However, data we analyzed at LiveStories suggests that Amazon alone—even with its size and commendable commitment to wage equality—would not close the gender wage gap in many American cities.

The pay “canyon”: Highly educated women fall way behind in Seattle

As is the story nationally, women in Seattle trail their male counterparts in pay across the board. A recent report we produced on the city finds a much deeper disparity in positions that require more training and skills: Women who hold a graduate or professional degree—the education typically required for a tech or specialized job at Amazon— make just 68 cents for each dollar earned by men. What’s worse, the wage gap widened between 2010 and 2015, meaning despite Amazon’s laudable efforts internally and its rapid growth in the city during that period, the “Amazon effect” hasn’t been seen in the larger community.

This is worrisome. Cities of similar size—including Baltimore, Boston, Denver, and Nashville—do not exhibit this pattern, and in fact have near parity in pay for men and women with more advanced education.

Cities that stand to gain the most in tech pay

Despite Seattle’s struggles with the pay gap for those with advanced degrees, there’s no argument that Amazon’s workforce pay parity will have at least some benefit to the chosen city for HQ2.

In a breakdown of income data by LiveStories for computer science and mathematics jobs in seven major cities between 2011 and 2015, we found that Atlanta and New York are fared the worst when it comes to the wage gap. In Atlanta, highly educated women in tech made 81 cents for each dollar earned by men. Chicago comes next last for large cities at 87 cents on the dollar, with Boston and Dallas tying at 88 cents on the dollar.

If Amazon is looking for a major city with a comparatively low gap in tech pay, Washington, D.C. is the place. Women in the District make 97 cents on the dollar. In Denver, it’s 92 cents on the dollar.

Will fairer economies prevail?

While it remains to be seen what exactly will factor into Amazon’s final decision, the company’s request for proposals for HQ2 states a preference for “the presence and support for a diverse population.” Considering the company needs a city with a talent pool of 50,000 workers across industries, economies that have historically provided more equal pay to women and men might have an advantage. While a diverse workforce entails more than equality for men and women in the workplace, cities that have made strides to close this gap are already ahead and poised to diversify further.

Additionally, Amazon has requested labor and rate information for jobs that will be created, and specifically called out a need for a city to prove its ability to attract software development engineers to the region. If a city or region doesn’t currently have jobs that pay equally, it’s a reasonable assumption that they’re losing female talent to areas that offer women fairer rates—a disadvantage for the HQ2 bid.

While it’s clear that Amazon’s presence alone will not magically fix the wage gaps that exist nationwide. Even the influx of 50,000 jobs with more equal pay will not shift the statistics one way or the other, as Seattle’s data shows. However, one would hope the company’s internal goal toward gender pay parity ultimately influences the local economies of its headquarters cities.

Adnan Mahmud is founder and CEO of LiveStories. Follow @adnanmahmud

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