A few weeks ago, the Progressive Policy Institute (PPI) announced that Amazon ranked number one in its American investment hero’s study. The research study evaluates companies’ abilities to help drive economic expansion, grow wages, and create jobs. So it’s no surprise that Amazon is one of the most prominent investors in the United States. The company seems to have a footprint in many facets of our lives, from IoT devices and eCommerce to web services and physical retail operations. With over a million employees, Amazon supports a significant portion of Americans with good employment opportunities. Moreover, the number of employees and capital spending continues to rise as the business diversifies to offers new products and services.
I have been covering Amazon for years, and at first, I was shocked by the company’s capital footprint in the United States. The longer I cover Amazon; the less shocked I become at the amount of capital the company puts into the US economy every year. Let’s look at how Amazon achieved the number one investor in America rank.
Pandemic slows down capital investment, but Amazon ramps up
It’s hard to get away from the sheer diversity that Amazon has in its products and services. I don’t have a single friend or family member who isn’t an Amazon Prime user, and most of them have Amazon IoT devices throughout their homes. So Amazon touches many parts of our lives, and the revenue and reinvestment follow.
It is impressive that Amazon invested 34 billion dollars in American Infrastructure in 2020 alone. Keep in mind that we have been living in a COVID environment for the better part of a year and a half. At the beginning of the pandemic, I saw many tech businesses acting extremely cautious with capital investment and spending as a whole. I remember hearing that some of the most considerable Fortune 500 companies were freezing hiring, pausing 401K matches, and down ramping its capital spending plans. All the while, Amazon was putting its foot on the gas. The company invested a lot in building physical real estates like fulfillment centers, wind and solar farms, and other forms of infrastructure. Amazon’s capital investments net result was that the company created over 400,000 new jobs and spent 34 billion dollars on infrastructure.
I think it’s worth mentioning that most of these created jobs were full-time positions offering starting pay of $15.00 an hour. For those that haven’t worked for minimum wage in some time, that’s double the federal minimum wage as it currently sits. So I think its pretty simple, the more you pay employees, the more capital flow through other businesses in the economy will see. Full-time employees at Amazon also have access to medical benefits and free skills training. With free skills training, employees can use their new skills to land better, higher-paying positions within the company.
Every year the Progressive Policy Institute study identifies the top 25 American companies that invest in the United States. Before the 2020 PPI study, we knew that Amazon has a massive capital investment footprint throughout the United States. However, the study revealed what we already thought to be true. Amazon is one of the most prominent investors in the United States economy and will likely hold that crown for a while.
I think it’s worth looking at the different areas of spending that allowed Amazon to rank as the number one company investing in America. Below I listed some of the ways the company invested in infrastructure.
- Opened 150 delivery stations
- Built 20 new solar and wind farms
- Opened 45 Amazon Fresh, Amazon Go, Amazon 4-star, and Amazon Books locations via pop-up or within Whole Foods Markets
- Built Tech Hubs in Boston, Dallas, and Phoenix while expanding its second headquarters in Arlington, Virginia
- Amazon labs built for testing Amazon employees for Covid-19
- Opened 17 neighborhood health centers in 5 cities
- Invested in Robotics Innovation Hubs in Massachusetts and Washington in hopes to produce low earth orbit satellites for supplying high-speed broadband internet to hard to reach places throughout the world
As you can see from above, there is a wide range of investments that Amazon has made within the United States. The one commonality that they all share is creating jobs and pumping more capital into the United States economy. That is never a bad thing. Customers benefit from better products and services as a result of the significant capital investment from Amazon. That benefit could range from faster shipping of packages due to a closer fulfillment center or having fresh groceries show up at your door via Amazon Fresh in the middle of the pandemic. Likewise, the 400,000 new employees gain great jobs and benefits while the country is in one of the most significant unemployment cycles in American history.
Ecommerce boomed due to social distancing and work-from-home conditions, and as a result, Amazon’s business grew tremendously. Many people may look down upon Amazon for massively benefiting due to the conditions spurred by the Covid-19 pandemic, but I see it a little differently. Companies need to grow revenues to invest more into the economy and hire more workers. While Amazon is winning in this environment, its customers and the 400,000 new employees are benefiting tremendously.
Amazon took bold steps in investing capital during a time when many companies were on the fence and taking more of a reserved approach. As a result, hundreds of thousands of new employees benefitted from Amazon’s capital investments and expansions. When the United States economy needed development and those out of work required good-paying jobs, Amazon stepped up to the plate. I admire Amazon’s approach to capital investment, and I believe we will see the company as one of the most significant contributors to the United States economy for the foreseeable future. Great work, Amazon.
All of this is good for America. It also can’t hurt Amazon when the FTC, DOJ, and Congress look at those being investigated like Apple, Google, and Facebook and think about what penalties could mean to America if imposed upon Amazon.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.