Slashdot Mirror
Apple's Top Assembler Foxconn Confirms Plans for US Investment, To Create 50,000 Jobs (bloomberg.com)
Foxconn, the biggest assembler of Apple devices, is in preliminary discussions to make an investment that would expand the company's U.S. operations. From a report on Bloomberg: The disclosure came hours after an announcement by U.S. President-elect Donald Trump and SoftBank Group's Masayoshi Son to invest $50 billion in the U.S. and create 50,000 jobs. The money will come from SoftBank's $100 billion technology fund, which was announced in October, a person familiar with the matter said. A document that Son held up after the meeting in Trump Tower also included the words "Foxconn," "$7 billion" and "50,000 new jobs" in addition to SoftBank's numbers. "While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant U.S. officials," Foxconn said in a statement. "Those plans would be made based on mutually-agreed terms."
Only fair.
Finally with an entrepeneur taking the reins we may be staring down a new golden age for America... withtout all the BS and fake numbers spewed by the recent federal government regimes. Unemployment at less than 5%? Puh-leeze. I guess maybe if you count crap work and part time jobs with no benefits. Trump is going to take the world by the balls and basically start squeezing and say "stop fucking us over OR ELSE. Now would you like to talk?"
Trump is cracking down on that
I suppose this doesn't have anything to do with current regulators blocking of Spint's merger with T-Mobile. Softbank president Son owns Sprint, so perhaps he's looking for a little favor when Trump assigns new folks over at the FCC.
50000 workers, at $25000 is 1.2 billion per year.
These 'factories' are not going to be using employees at $10/hr to assemble PCBs.
I note a story earlier this year "One factory has "reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots", a government official told the South China Morning Post. ".
Most of the putative 50000 jobs are going to be construction work building the factories.
The factories are then going to be - if not totally lights-out - reducing employees to the bare minimum.
If you're building a new factory in the USA, and contemplating employing workers at $10/hr for 5 years (three shifts), that's $500K per station or so (probably more costing all costs of employees.
If you have even 100 employees constantly doing a very similar job, you can easily afford to spend 5 million developing a custom robotic solution, and deploying it for another $5m ($50K/station), and come very considerably out in front.
($10/h*24h*365*5 = 438k. Employers taxes and obligations add to this comfortably exceeding the 500k figure for three shifts)
That's a million dollars a job. Seems like a lot.
He'd need at least eight years and two unicorns to accomplish that but I hope he does.
Damping absorbs vibrations. Dampening is caused by moisture.
You mean local MILFs in my area that want to talk to me?
Actually, it's not.
50,000 American jobs created by factory work? Okay. Now, those iPhones have to generate revenue to pay for those jobs. Apple has huge profit margins, so this isn't much fair (the US business average is under 10% profit margin); but let's say Apple isn't altruistic and is trying to keep those huge profit margins, or just pretend Apple is a normal US business with normal profit margins that fit its business growth and risk control needs (because the only violators of this are what, Apple, Google, and Microsoft?).
To keep the same margins at higher American worker costs, you charge more for the phone.
If you ship fewer phones, you'll have fewer jobs. That includes fewer exports, too, so less international revenue coming to the U.S.; but let's assume that doesn't happen. Everyone buys iPhones at $1,400 instead of $700.
Someone concluded 36 million iPhones sold in the US. If we're imagining a doubling in price above (for illustration; order of magnitude is controlled by depth of price difference, and the difference isn't at 0--we'll get to that), that's $25.2 billion. That's equivalent to 1.52 million minimum-wage incomes.
So for 50,000 jobs shipping 36 million iPhones to US customers (which I doubt actually happens) at $700 additional cost (doubling the price), you lose a maximum of 1.52 million jobs. It's only 50,000 jobs lost if the wages are on average $262/hr for those lost jobs ($524,000/year).
As I said: the price increase controls magnitude. If you increase it by $100 ($700 becomes $800), you're looking at $3.6 billion. That's 218,000 minimum-wage jobs, or 50,000 $72k jobs ($36/hr average wage). That's your exchange.
All of that is based on the sales of US phones to US people. That doesn't count international sales. The biggest take-aways here are that job creation or loss in practice depends on how much you pay the workers--pay them less and you create more jobs, as you noticed--and that everyone who isn't a factory worker and who buys the factory worker's product has less money to spend.
At best, this is a way to enrich factory workers at the expense of all other Americans, reducing the number of available products and services (e.g. we could have expensive iPhones and no Spotify) by drawing both domestic and international money to a subset of peoples's hands, with the international money being spendable back into the US economy. At worst, this is a way to create poor US factory workers, a poor US middle class, and less-competitive United States business, causing a rapid fall in sales as people in Europe roll their eyes at higher-priced iPhones and just go to buy the Chinese-made competitor's product--or maybe Apple will sell Chinese-made phones outside the US and stay competitive, but the US factory workers won't get that international money (14,000 employees at Apple HQ are still getting that cash and propping up Cupertino's economy with $2 billion of wages from across the world).
Again, as you observe: the net job change will be positive (an increase) if we pay the factory workers little and abuse them with minimal benefits and other cost-cutting measures, making them poor even as the products they produce become more-expensive than the import product. Even then, the US consumer still has less money to spend on everything else, and is thus poorer: he can buy fewer things with the same income.
Support my political activism on Patreon.
So shifting jobs to low wage countries has come a full circle.
bickerdyke
Trump is cracking down on that
Obligatory... [citation needed]
So much crying and so little understanding of systems theory.
Sure, americans want more money than chinese children. However, what does it cost to support all the unemployed people and to fight the higher crime and other problems that come with unemployment?
Also, money goes in circles. The american worker paid well will spend a large part of his salary on some other american business (say, the fast food store near work, the gas station on his way to work, etc.) while the chinese child spends his money somewhere in China.
Ford was the first to understand that paying his workers well would actually give him an advantage - if they can afford to buy one of his cars, they will. The same is true of this. Maybe the price of iPhones will rise - or maybe more people will buy them and the price stay the same. Or something inbetween.
It's too easy to just cry that prices will rise. In fact, that's usually a strawman.
Assorted stuff I do sometimes: Lemuria.org
Trump has stated that he would be "looking into" the H1B situation. Many talking heads, supporters and haters are assuming this means that changes are coming. The money thinks changes are coming, so likely changes are coming but he's not in office yet. In either case this is more winning for Trump even before he's entered office. Very much new CEO strategy.
Right now how much does the government get in taxes from a factory that does not exist?
$0
After the factory is built, let's say the government gets just $1 a year in taxes from the factory. How is that not still better than today? And of course we know the company will be paying more that that...
If tax breaks mean the factory, and the jobs to build it, and the jobs to maintain it, and the jobs created by shipping material in and products out, gets built how is that not inherently better no matter what "tax breaks" are given?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The suicide rate at Foxconn during 2010 remained lower than that of the general Chinese population at the time[6] as well as all 50 states of the United States.[38]
And yet he's getting a Taiwanese company to create jobs in the US. Seems that phone call with the Taiwanese president may have been good for something, and not only for pissing off mainland China.
I agree with a systemic look. Which is why I'm against state-aided companies just to keep people employed. It's economically inefficient.
Despite what people think, moving production to a cheaper location (like China) isn't just beneficial to the Chinese. If you follow economic theory, free-trade isn't just good for exports, it's good on the import side as well. Because you get cheaper goods for the same quality.
You don't want to get rid of that. You don't want to slow down the economy by making goods more expensive. What you *want* is to allow companies to make tons of profit, *tax* that profit and use that money to pay people who were unemployed due to jobs moving away.
In that scenario, you grow the overall net amount of wealth and use tax and UBI policy to distribute the wealth.
In the scenario of using tax money to incentivize where manufacturing goes, you shrink the overall net wealth (because manufacturers are being less efficient in terms of money spent per goods produced) just to distribute wealth to those who would've been unemployed.
Systemically, it's less efficient to go the later route than the former. Economically speaking.
Here, mod this down, too. I need to take away your modpoints before you use them to hurt someone who won't get another shitload of upmods plenty soon enough.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"