Why America Doesn't Need More Tech Giants Like Apple

Hugh Pickens writes "Optimists says that if only America produced more companies like Apple and Amazon and Google and Facebook, the country's economic problems would be fixed — America could retrain its vast, idle construction-and-manufacturing workforce, and our unemployment and inequality problems would be solved. But Apple's $1 billion new data center in North Carolina has been a disappointing development for many residents, who can't comprehend how expensive facilities stretching across hundreds of acres can create only 50 new jobs, especially after thousands of positions in the region have been lost to cheaper foreign competition. In fact, Apple actually exemplifies some of the reasons why the U.S. has such huge unemployment and inequality problems: 'Digital' businesses like Apple employ far fewer people than traditional manufacturing businesses, Apple's 60,000+ jobs are not just in the U.S. — they're spread around the world. Companies like Apple 'create amazing products and vast shareholder wealth, but they don't spread this wealth around as much as earlier industrial giants did,' writes Henry Blodget. 'So, yes, we should celebrate the success of Apple, Google, Facebook, and Amazon. But we shouldn't delude ourselves into thinking they're going to solve our unemployment or inequality problems.'"

Comments

Re:Americans

[diersing]

Who hurt you man, why so jaded?

Maybe that comes from the fact that Asians are not as lazy and against "stupid jobs" (when they are in fact the most useful ones) as Americans?

A quick google search reveals the average manufacturing job in China pays $134 per month. It has little to do with laziness or stupid jobs, its simple economics.

I've been saying this for YEARS!

[sirwired]

Municipalities and state governments are MORONS. There is not one reason to spend a single cent of tax incentives on a data center. They hear "Google", "Apple", "Facebook", and they have visions of hundreds of highly-paid software engineers sitting in row upon row of cubicles, and then going home to their brand-new houses, spending all their millions in local stores, etc.

Not even the companies themselves promise much in the way of jobs, but the governments aren't paying attention.

If you have finite electrical generating and grid capacity, it's far better to lure in SOME kind of manufacturing facility (they do still exist) then a data center that will book a huge portion of the output while employing a tiny handful of people that really don't get paid that much.

Re:Americans

[SimplyGeek]

The Foxconn suicide scare has been disproven. Given their large workforce, they're going to have suicides. When taken against the national average, it's actually lower.

But no; everyone just looks at absolute numbers and not relative numbers.

"Triple the costs"

[Kupfernigk]

This is nonsense. Labor is typically quite a small part of the cost of electronic products. (In fact, before the rise of China automated assembly was doing very well, but Chinese labor undercut it and the products were redesigned for manual assembly. I actually costed one product line that had been largely automated and discovered that hand assembly in China cost almost exactly the same. But the company owners regarded "manufacturing in China" as some kind of dick-swinging club that they aspired to join. Yet products could easily be redesigned for automation again.)

You underestimate how little money companies are prepared to save by betraying their countries.

Re:50 jobs

[mcgrew]

Yup, and now that the $1B construction job is done, do we just ship the construction workers off to "somewhere else"?

My dad is a retired lineman, and he spent half his career doing electrical construction. Yes, shipping construction workers somewhere else is exactly how it's done. I didn't see much of my dad as a teeneger when he was tramping around the country building towers and stringing cable.