The Amazon data center project may prove to be a bigger boon to Mississippi than first reported. An Amazon official told a Millsaps College audience last week the company will hire more than 1,000 people and will invest "tens of billions of dollars" in the project.
Amazon Web Services made big news in January when it announced it will occupy two Madison County locations for the historic buildout for hyperscale development centers. Mississippi lawmakers completed a $259 million incentive package for the Amazon Web Services $10 billion project in Canton and Madison County. "We were lucky to find Mississippi," Wehner told the audience at Millsaps. "Let me make one thing clear, all of the news articles say we are going to invest $10 billion dollars. That's actually not true. That is our minimum public commitment. We are going to invest far more than $10 billion. Rest assured it will be tens of billions of dollars."
The newspaper reported that Wehner said the project will create "far more" than 1,000 jobs. Construction will take place for the next five to seven years.
"There won't be this flurry of manufacturing and then construction jobs go away," Wehner said. "We will build on both sites simultaneously as needed as we go along. That means we are continuously under construction. So, the thousands of construction jobs. There will be thousands of construction jobs and billions of dollars that will be invested in your community is the No. 1 benefit of us going to a community. We literally will drive a big segment of the economy. … This money will ripple through the local economy," reported the Clarion-Ledger.The executive also said the average salary for AWS Mississippi employees will start at approximately $80,000.
The legislature approved the following package for the project:
* $32 million for training grants and education
* $12 million for site assistance
* Loaning Madison County $215 million for infrastructure development (roads, water, sewer)
* $13 million for new fire station near plants.
The loans will be repaid through fee in lieu of payments from Amazon.
The loans will be repaid through fee in lieu of payments from Amazon.
Wehner also disputed the notion Amazon will receive corporate welfare:
Let me be clear about this, we are the largest tax payer in every jurisdiction we are in. That's a fact," Wehner said. "In fact, our modeling currently predicts that for the school systems in Madison County, we will double their revenues in the first year. So, whatever the current budget is for Madison County schools, there will be a two-x factor in a year and a half or two years." He said that in Loudoun County and Prince William County in northern Virginia, two of the wealthiest counties in America, AWS provides 51% of their tax revenues for their schools systems. Article
39 comments:
Just wait until they experience the workforce...or lack there of.
Just wait until they experience the workforce...or lack there of.
April 15, 2024 at 9:27 AM
That's the reason for all the "Extra" Jobs...Like the Continental Tire Plant, they had to "Over Hire" to be sure to get a close to complete work crew evey day...When a business Pays Too Much the employees won't come to work reguarly...Go Figure...
And here come the Crotches.
"$32 million for training grants and education"
Someone qualified for an $80,000 a year job should not need much training and education.
On the other hand, I personally remember and was involved when Bechtel broke ground at Port Gibson for the nuclear plant. In conjunction with Hinds Junior College (name at the time) we recruited and trained hundreds. Trained them to use a ruler, a mechanical pencil, taught them sixth grade math. That was 1972. There were no illegals at the time to absorb the demand.
We are paying for everything for this business to locate here so I will want to see a posting of the projected "return on our investment ". The current school budget is $135 million so we will look for $270 million (the promised double) in no more than 2 years for starters.
I want to also see how many Mississippians are actually hired and trained and what their salaries will be and their advancement.
How on earth did so many of the international companies that are already here and have been for decades every manage to get started without a corporate handout from us?
Oh wait, they had to get investors who then got to share in profits or they had to borrow from banks that charged interest.
and the losers said "we refuse to accept success!"
"We were lucky to find MS"
In 1970s Aspen, locals lumped all Southern young women, whether from Georgia or Arkansas or anywhere in Dixie, as redneck Texans with rich oil daddies and too much makeup and jewelry. "Finding MS" probably took an Amazon geographer.
Anonymous said...
Just wait until they experience the workforce...or lack there of.
Nissan seems to be running pretty well. They draw a workforce from 21 counties. Perhaps one of these new jobs will attract a great employee like you. Of course your individualized training program would require about five weeks of attitude adjustment.
This is fantastic news for MS. As an executive at a local technology company, this is only good for the state as a whole. Looking at it otherwise is only possible through the lens of pessimism.
No mention of the millions of gallons of water used daily, enough "dirty energy" to power 700.000 homes, the toxic waste materials, nor the cancer rates among those who work in these data centers. Cant wait until the water use for all the cheerleaders is restricted and for all the Madison County brown-outs to come! Great for Amazon to find this bastion of unsuspecting hicks and rubes!
Who will supply electricity? Data centers use a lot of electricity.
Overall, it's very encouraging for Mississippi to get this facility.
Damnit!
I'm here to tell you these numbers will prove to be typical corporate hyperbolic bullshit in time.
Lucky they have yet to deal with Shock-Way
Are they not getting some kind of property tax exemption for X number of years? Seems like that is case when most big companies locate somewhere. If they are then how will they double the budget of the school.
11:57 If you would read up on things they can't exempt school taxes. Quit complaining everyone, I'm sure the Alabama Mercedes plant people thought the same, wait till they get a look at the workforce! New people will come in and realize that the easy going life style will suit some, others won't. Biggest thing is to get a good education for your kids you may end up at a private school.
10:54 - The only ones sounding like hicks and rubes are the pessimistic dunces who nitpick every little detail on this biggest economic development news to ever hit the state.
Seriously. Some of you sound like total morons. What would you rather Amazon do? Not come? So then ya'll could continue to whine about nothing good ever happening here. I really think alot of you small-minded twits only want negative news and bad things to happen to Mississippi.
Who gives a rip how much Mississippi had to pony up? Who gives a rip of if it's 8 billion instead of 10? Who gives a rip if it's 750 jobs vs. 1,000 permanent? The fact of the matter is it is money from outside the state getting invested inside the state in the long term. But, ya'll would probably rather continue being a welfare state.
To answer a few questions from other posts:
Power infrastructure improvements are part of the plan. Would not surprise me if local providers build new generating facilities.
The water leaving these facilities will probably be in better shape that when they entered the facilities.
The communities will directly benefit from the infrastructure improvements implemented AS A RESULT of this development. But ya'll would probably rather cry about crappy water and roads instead of have a means (private investment at that) to bring us into at least the 21st century.
It seems the good news has lit a fire under the ass of the naysayers.
April 15, 2024 at 10:54 AM
Are you aware that Jackson Metro is powered by a Natural Gas plant in North East jackson by Tougaloo and nuclear?
I am all for economic development and hope this is a positive for our state.
My concern is that the tax breaks which affect ALL taxpayers in Ms. may only benefit certain areas of the state. Is that the case or can someone explain to me the positive ramifications for all of us ? Also, concerning the EV battery plant, hopw many of those jobs will be filled by out of state employees while Ms. taxpayers provide the incentives ?[ 35 million of these dollars going to benefit a Chinese Company] If I have my locations wrong I apologize but I know one of these will be located in the area around Desoto County.
So what economic project would benefit ALL areas of the state, as you put it? Name one.
I dont know that any would benefit ALL areas of the state, but the majority of these projects seem to be concentrated in certain regions of our state. I do not think my area has seen very much benefit from most of these projects.
The flag people aren't going to like this...
April 15, 2024 at 2:09 PM, preach, brother. There's people that need to hear what you're saying.
"As an executive at a local technology company" now that's rich. We have only had one of those since 2000 and he has turned into a dooms day predictor. Well, we have two, but one is now a radio DJ.
I'd vote for 2:09. I bet she could fix PERS also!
News Flash…..Amazon is doing this in every state….not just MS
What is wrong with you people? Amazon will provide data services for a lot of out of state companies and then spread much of those incoming new $ around here in the form of payroll and vendor payments and taxes. When such businesses close it is a tragedy. Surely you can see one coming as a positive. On a side note, I have been told, when wondering why Mississippi, it has more to do with cheap real estate being located next to the big data pipes running through here than the local officials or the work force. Not a tech person but wondering if Cspire being based here has something to do with the big pipes. But that stuff is not my area. Just what I heard.
Lack of workforce will be no problem. People will gladly move here for an $80,000 salary. No doubt about it this is a huge economic boost for the metropolitan area.
2:09 pm Seriously, some of us have actually studied business and economics and the history of both when an MBA was two years instead of 1 or the 6 months in which some executives get an honorary degree. We also studied the systems that support free enterprise. Also included were business law and business ethics so one came to understand why they were needed.
Critical is competition and a level playing field where the best ideas can emerge. You don't get that by aiding existing business at the expense of competition and taxpayers.
Forgotten is that business exists in a larger environment...that of a functioning prosperous society.
History tells us that monopolies are bad. And, so is making legal what was once illegal for good reason. Yet, that is what we have done.
If you wonder why prices are still at Covid levels and inflation is hard to control, your answer can be found in all the laws that once regulated businesses and protected consumers and taxpayers that were erased.
You also can find, if you want, the one place where business was unregulated. See how that worked out.
But you won't. Money is everything. It's the only measure of importance, right?
Part 1 of 2
First, Roger Wehner is not a finance or "money" guy. Here's a starting point, www.al.com/live/2013/06/incoming_mobile_airport_author.html . I am not implying he is a bad person. I don't know him or anything more than what has been reported. Just pointing out his career as, in his own words, "a business development guy." Since he spent much of his career in Alabama, he knew Mississippi existed long before he had heard of Amazon (which is much newer than either Mississippi or Alabama). His career information has nothing to do with how much Amazon is actually spending in Mississippi even if it provides some insight to the source.
Outside money entering Mississippi is a positive and it may have some negative offset. See, for example, Enviva and its economic and environmental impacts (the wood pellet company that recently declared bankruptcy, of which there are numerous articles and information for anyone interested in Googling). With Amazon, an obviously serious and well-funded company, the chances of bankruptcy in the near future are essentially nil. From all indications the data centers will be built and will be in use for years. From all indications, the overall environmental impact will not be zero, but it will not be that of pellet mills, etc.
The total cost expended by Amazon will not come to or benefit Mississippi, its residents, or its taxpayers. On a smaller, more-easily understood hypothetical, if XYZ Corp buys 1 million iPhone 15 Pro Maxes for $1 billion elsewhere and stores them for regional distribution in the $10 million dollar warehouse it built in Mississippi, it does not mean that Mississippi gets equal benefit from the total $1.01 billion spent. But it did get some benefit from the $10 million spent on the warehouse and it may get some tax rev, depending on the exact circumstances. Further, if XYZ also hires 10 Mississippians at $80,000 a year to staff the warehouse, there is some economic benefit from that, but unless those hires were previously unemployed Mississippi citizens, it would not be $800,000 in "new money" or "10 new jobs." For example, if the hires were previously working for C-Spire at its iPhone warehouse and making $60,000, C-Spire's replacement plan comes into play. If they only replace 3 of those workers and buys an automated shipping "robot" from outside of Mississippi, using rough numbers the impact is the $200,000 increase for the 10 XYZ jobs ($60K to $80K from "outside" money), plus the $180,000 in replacement jobs, and that assumes the 3 hires are unemployed Mississippians, not out-of-state hires. Whether any NET new jobs were created is not a certainty, although at scales larger than a few jobs in a spectrum of labor areas, there are likely some number of new jobs created. But again, the economic impact is whatever the increase to existing payroll in the economic system might be (in this case, Mississippi) and not simply the total of the "new" payroll unless all hires were previously unemployed.
Part 2 of 2:
So, does Amazon expending "more than $10 billion" on data centers in Mississippi mean more than $10 billion will be spent in Mississippi and enter its economy? No, not even close. But that still doesn't mean that the AWS project will not be a positive thing for Mississippi.
As to the creation of jobs, it appears that vast majority of labor, labor cost, and labor need will be in the construction of the facilities, not at the facilities once operational. Note that "labor need" is not "jobs created" and that the "labor" in "labor cost" does not mean "manual labor," it is everything from ditch-digging to engineering to management, i.e., the guy digging footings and the CEO of the prime contractor are "labor cost" in this calculation. Even assuming all labor will be performed by Mississippians (an unrealistic assumption, but...), if that labor is simply hired away from other companies or moved from other projects, there are no "new" jobs until that labor is replaced by "new" hires. The data to make a defensible prediction as to real job creation and real economic impact(s) could be obtained, analyzed, and reported, but it will not sound nearly as impressive as "1000 NEW JOBS!!!!" However, it will create some number of jobs. Some will be Mississippi hires and some will be out-of-state.
Making a rough, back-of-the-envelope guesstimate, it looks like the AWS project will be a net-positive for Mississippi. Especially if it brings more "high-tech"/STEMish industry to the state but making such assumptions is not reasonable, only calculable in hindsight if it occurs.
In my opinion, what folks like Wehner ought to insist upon from their companies is real-world impact numbers to report. Those numbers would not sound nearly so impressive, but they would be real/realistic and defensible to any reasonable attack. Of course, if Amazon or other companies did that, it would be harder to gain concessions from state and local governments, whose decision-makers are largely from the pool of the same people impressed and influenced by "$10 billion!!!!" and "1000 NEW JOBS!!!!" but without the knowledge to properly analyze the real dollar impact, or with the venality to think there will be a lot of skim in "$10 billion!!!!," and in either case, know that voters will be impressed and not know how to analyze them. And since the personal risk to those involved, from pols to spokespeople to pundits to AWS management is essentially non-existent, none have any incentive to tell the whole truth, assuming they actually know it and aren't just as caught up in the hype as others.
“As an executive at a local technology company" now that's rich. We have only had one of those since 2000 and he has turned into a dooms day predictor. Well, we have two, but one is now a radio DJ.”
Hey, smart ass… there are companies other than Bomgar and Venture. I run a software company with a $60mm run rate. Right here in the metro area.
You don’t have the slightest clue what the fuck you’re talking about. Go back to bed.
Luck had little to do with it. Just look at two lists. You will find Mississippi at the top of one list and the bottom of the other list.
Nissan seems to be running pretty well.
I went for three interviews for a senior level supply chain position at Nissan a few years ago. I was shocked at the contempt that these managers and supervisors have for their employees.
I was told over and over that Nissan made a big mistake by opening the busiest production assembly plant in the world in an area where most people cannot hold a part-time job let alone a busy auto assembly plant where overtime is mandatory. The same is true in regards to is showing up on time.
They have redone the point system so many times that they started giving out bonuses for people that showed up on time and did not call out or leave early. Something most normal work forces do with out incentives.
Everything the politicians promised about Nissan - $25-$30 per/hr jobs, elite healthcare package, stocks, pension - all lies.
The quality of a Nissan used to be on par with Toyota and Honda before they were assembled in Canton.
Nissan is the Walmart of the auto industry pushing volume and sales.
Entergy already built a substation next to the Amazon center. Since the new facility will also be run by Amazon I am sure there is capacity for the new location.
As I read the comments, I understand why Mississippi is last in almost all of the economic indicators. No wonder our children have to go out of state to get good jobs.
To the genius from 4/15 @ 2:09....today's Premium Report from the Epoch Times, "How Big Tech Is Consuming America's Electricity and Water". P.S. You also need to work on your grammar.
Amazon is so lucky to find a fresh set of rubes. I'm sure they're overjoyed that no one suspects a thing.
https://www.washingtonpost.com/business/interactive/2024/data-centers-internet-power-source-coal/
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