Amazon's creation of 3,000 well-paid jobs could simply displace 3,000 other people

Three years ago, the announcement that one of the world's biggest companies would be bringing 3,000 high-paying jobs to Vancouver would likely have drawnapplause from virtually all corners.

But when the benchmark price of a home increases by 67 per cent in those three years, as is the case in B.C.'s Lower Mainland, everything gets viewed through the lens of affordability.

Which is why, in light of Amazon's decision to expand its Vancouver operations, people consider the ramifications of thousands of extra workers needing homes in a city already stretched for affordable units.

"It's a supply issue, and it's going to exacerbate the housing crisis,"said JoeBowser, a software developer with Adobe. "You have more people, making more money, who are going to displace people making less money,"

Bowserhas worked in the region for a decadebut lives in Burnaby because he can't afford property in Vancouver. He acknowledges Amazon's decision is good for people in his industry, but worries what the net effect will be in a region where vacancy rates are so low.

"Interns [at Amazon]make 75 or 80,000a year, still in school making this money, and they're going to displace people [from the rental market] making 40 to 50,000... they're going to be paying the rent that went up that you're no longer able to afford," he said.

"If you're not keeping up with these wages, you're not going to be able to afford Metro Vancouver anymore."

Trickle-up effect on wages

How much Amazon employees in Vancouver will make is a matter of conjecture: while the company discloses the median salary of workers ($28,446 USin 2017), the vast majority arewarehouse workers, making it difficultto get a precise figure for white-collar workers.

But conventional wisdom, gleaned from media reports and online wage-comparison sites,is that the median salary will be somewhere around $100,000US. And considering the average wage for a software engineer in Vancouver was approximately $60,000 USin 2017, that will create upward pressure on wages in the city's tech sector.

"For people who are already in Vancouver, most understand that the salaries are low, especially given the housing market," saidAllen Pike, CEO of Steamclock Software, a Gastown-based app design and development studio with 11 employees.

He saidAmazon's increased presence will not only increase the average salary, but also act as an incubator for the city's tech scene.

But Pike saidwho else it will help is an open question.

"Given the housing bubble we have in Vancouver, salaries overall need to rise in order for people to live here.But obviously, if only some people's salaries rise, that can potentially increase the cost for people who don't work for Amazon."

'Affordability has 2sides'

Absent the real estate bubble burstingor tens of thousands of social housing units coming out of thin air, it seems like an unsolvable paradox: for people to live in Vancouver at current housing prices, the city needs more jobs at higher salaries.

But if those jobs create more incentives for renovations and higher-end housing developments, then it increases the exodus of working-class people from the city.

"It's going to present a lot of opportunityfor more people to afford housing," said Sean Elbe, the manager for thetechnology sectorof theVancouverEconomic Commission, a city-run organization, during an interview with GloriaMacarenko, the host ofCBC'sOn The Coast. "Affordability has two sides. It's our ability to payand also the cost of housing,"

He used the example of a "good friend" of his in Vancouvergoing back to university for a computer science degree. Amazon coming, Elbe said, was an opportunity for him to get a higher-paying job than he could before.

What percentage of these new jobs,Macarenko wanted to know, would go to people already in Vancouverand how many would go to people who don't live here?

"That's a really good question. I don't have that data for you," said Elbe. "However, our understanding of what we've seen locally, that even amongst...."

The telephone line went dead and the radio interview was suddenlyover. Just one more queryto addto the growing list of unanswered questions about Vancouver's housing market.

If you are interested in housing affordability, check out CBC's newpodcast,SOLD!Host Stephen Quinn explores how foreign investment in real estate divides community, class and culture. Find itatCBCPodcastsorApplePodcasts.