Fact Checker

Fact Checker: Math doesn't quite add up for Andrew Yang's Amazon.com Iowa claim

Democratic presidential candidate and businessman Andrew Yang speaks Sept. 21 among bales of hay and pumpkins at the Pol
Democratic presidential candidate and businessman Andrew Yang speaks Sept. 21 among bales of hay and pumpkins at the Polk County Democrats Steak Fry in Des Moines. (Kathryn Gamble/Reuters)

“Amazon’s soaking up $20 billion in business each year causing 30 percent of your stores and malls to close. How much is Amazon paying in federal taxes each year? (Audience: Zero.) That is your math, Iowa — $20 billion out, zero back … The most common job in your state is retail clerk. A 39-year-old woman makes between $9 and $10 per hour.”

New York businessman and 2020 Democratic presidential hopeful Andrew Yang made the comment during his speech at the Nov. 1 Iowa Democratic Party Liberty and Justice Celebration in Des Moines.


Yang packed a lot of claims into a short sound bite. We’ll delve deeper.

Graded a C

The online retailer negatively impacting brick-and-mortar stores is well-documented and even has a name — “The Amazon effect.” But we want to see if Yang’s numbers add up.

His campaign provided sourcing for each claim, but the citations mainly came from news reports and, even at that, some did not directly address the claim.

To support the $20 billion number, Yang’s campaign cited a Business Insider article about how the online giant accounts for 43 percent of U.S. online retail sales.

“If Amazon controls about half of all e-commerce, and the market is growing by $40 billion a year, we can assume that about $20 billion is being ‘sucked up’ by Amazon,” Yang’s team said.


However, the article doesn’t provide those figures, nor were we able to recreate that math independently.

Amazon’s Securities and Exchange Commission filings showed Amazon in North America had $141 billion in net sales in 2018, a 33 percent increase from 2017. Amazon earned $7.2 billion in operating income in North America, which is revenue minus expenses, such as wages, depreciation and cost of goods.

Neither case matches Yang’s number.

For retail closings, Yang’s team linked to a Forbes article citing an official from Transwestern, a real estate company, who predicted “328 malls — roughly 30 percent — will likely close or be re-purposed over the next decade.” A 2017 Credit Suisse research note predicted 1 in 4 malls would close by 2022, according to Fortune.

No support was provided for the details on individual store closings.

The National Retail Federation reports there are over 1 million retail establishments in the United States.

A Business Insider analysis in October reported 8,600 stores were expected to close in 2019, and Coresight Research, a global firm analyzing retail business and technology, reported in 2018 that major retailers closed 5,524 stores.

In neither case does that come to 30 percent.

We found no documentation compiling the total number of closed or abandoned malls, only examples of it occurring. In the Corridor, even as malls have struggled they have not formally closed, but in some cases been repurposed in different ways.

Another way to look at this is retail closure by square footage.

Business Insider, citing estimates by the commercial real estate firm CoStar Group, reported retailers closed 102 million square feet of store space in 2017 followed by 155 million square feet closed in 2018. A Morningstar Credit Ratings report from October 2017 estimated there was 23.5 square feet of retail space per person in the United States. Based on a population of about 325 million, that would mean there is about 8 billion square feet of retail.

Again, these don’t get to Yang’s 30 percent.

On to the claim Amazon doesn’t pay federal taxes, the Institute on Taxation and Economic Policy, a nonprofit, nonpartisan tax policy organization, backs this, saying Amazon “didn’t pay a single cent of federal income taxes” and was “far from paying the statutory 21 percent income tax rate on its U.S. income in 2018.”


The SEC filing shows Amazon has been owed money back for federal taxes each of the past two years. Tax credits and deductions for stock-based compensation for employees were factors for owing little to the federal government.

The filing also shows Amazon owed $322 million in state taxes in 2018, and in 2018 had $565 million in deferred federal taxes. So it is somewhat misleading to suggest the company doesn’t pay any taxes. But, clearly, Amazon is not paying much relative to its earnings.

Yang mixes national and state data in his next claim about retail workers.

Nationally, the average retail worker’s age is 38 and the average wage for a female retail worker is $10, according to Data USA, a free platform allowing users to collect, analyze and visualize U.S. government data. Data USA is a partnership of Deloitte, Massachusetts Institute of Technology Collective Learning Group and Datawheel.

Iowa data from the Bureau of Labor Statistics, compiled by Iowa State University economist Dave Swenson, shows the top two jobs in Iowa are cashiers, who earn an average of $10.49 per hour, and retail salespersons, who earn $12.92 per hour. The data was not broken down by gender.


The overall sentiment about Amazon’s impact on retail and that the company pays little in taxes is on point, but we could not find support for some of Yang’s claims, including that Amazon is “soaking up $20 billion in business each year.” While experts suggest we will see a 30 percent reduction in shopping malls in the future, data does not support we are there yet. Yang was mostly correct in his assessment of retail workers in Iowa.

We give Yang a C for these claims.


The Fact Checker team checks statements made by an Iowa political candidate/officeholder or a national candidate/officeholder about Iowa, or in ads that appear in our market. Claims must be independently verifiable. We give statements grades from A to F based on accuracy and context. If you spot a claim you think needs checking, email us at factchecker@thegazette.com.

This Fact Checker was researched and written by B.A. Morelli of The Gazette.

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