Greg Linden, Jason Dedrick and Kenneth L. Kraemer [are] a troika of scholars who have made a careful study in a pair of recent papers of how the iPod has created jobs and profits around the world,” Chrystia Freeland reports for Reuters. “The latest paper, ‘Innovation and Job Creation in a Global Economy: The Case of Apple’s iPod,’ was published last month in The Journal of International Commerce and Economics.”
“One of their findings is that in 2006 the iPod employed nearly twice as many people outside the United States as it did in the country where it was invented — 13,920 in the United States, and 27,250 abroad,” Freeland reports. “You don’t need to read the iPod study to know that a lot of those overseas workers are in China. But, given how large China currently looms in the U.S. psyche, it is worth noting that fewer than half of the foreign iPod jobs — 12,270 — are in the Middle Kingdom. An additional 4,750 are in the Philippines, which, with a population of just 102 million compared with China’s 1.3 billion, has in relative terms been a much bigger beneficiary of Mr. Jobs’s genius.”
“Now come what might be the surprises. The first is that even though most of the iPod jobs are outside the United States, the lion’s share of the iPod salaries are in America. Those 13,920 American workers earned nearly $750 million. By contrast, the 27,250 non-American Apple employees took home less than $320 million,” Freeland reports. “That disparity is even more significant when you look at the composition of America’s iPod workforce. More than half the U.S. jobs — 7,789 — went to retail and other nonprofessional workers, like office support staff and freight and distribution workers. But those workers earned just $220 million.”
“Here in microcosm is why America is so ambivalent about globalization and the technology revolution. The populist fear that even America’s most brilliant innovations are creating more jobs abroad than they are at home is clearly true,” Freeland reports. “In fact, the reality may be even grimmer than the Tea Party realizes, since more than half the American iPod jobs are relatively poorly paid and low-skilled.”
“But America has winners, too: the engineers and other American professionals who work for Apple, whose healthy paychecks are partly due to the bottom-line benefit the company gains from cheap foreign labor. Apple’s shareholders have done even better,” Freeland reports. “In the first of their pair of iPod papers, published in 2009, Mr. Linden, Mr. Dedrick and Mr. Kraemer found that the largest share of financial value created by the iPod went to Apple. Even though the devices are made in China, the financial value added there is ‘very low.'”
Much, much more in the full article – recommended – here.
Ryan Avent writes for The Economist, “All Apple has done has put thousands of people to work making products consumers love. We can look at Apple and ask why it hasn’t created jobs in the way Detroit did decades ago, but that’s a stupid question. Detroit’s employment machine depended on a set of technologies and prices that vanished long ago. We can have those technologies and prices back if we want, but we have to give up Apple—and many of the luxuries we now take for granted, not to mention a healthy chunk of current incomes.”
“The question is not why Apple doesn’t employ more Americans,” Avent writes. “The question is why there aren’t more Apples.”
Full article – recommended – here.
[Attribution: TIME Magazine. Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Yes, because Apple’s Gross Margins are so high, most of the cost of the sale of an iPod or other iOS device is retained in the US. The value-added is highest here in the US. That’s why the Designed in California etched on the back of your iOS device is just as prominent as the place of manufacture.
Let’s not get too excited with the results. Most of the profits on the global sales of Apple products stays in the countries where the purchases were made.
Most of Apple’s multi-billion warchest resides offshore.
Most of the profits on the global sales of Apple products stays in the countries where the purchases were made.
Most of Apple’s multi-billion warchest resides offshore.Probably true. When you see such a seemingly-ridiculous, head-scratching fact, think stupid government policy [e.g. U.S. is only Western country that taxes income generated “offshore”. No wonder all those billions never come home.]
And, Remember that Apple has already paid tax on those monies to these other governments. Generally much higher taxes. Why should they pay again?
As you would hope and expect. I mean if Honda sold a car here, you’d hope that the most of the money would stay in the USA.
I think, to be accurate, you have to look beyond the jobs directly connected to Apple, Inc and see the thousands of additional jobs the whole iPhone, iPad, iPod ecosystem has generated also. From app developers that didn’t exist four years ago to all the home-grown accessory suppliers.
Before globalization itself was popular, I have said that America would be the greater loser. I also predicted that China and India would be the biggest beneficiaries of American largess. This at a time when America thought that it could do nothing wrong. I have many friends who inveighed me for such unconventional stand.
Now I would further predict that America would join the rank of a third-world order within a decade. All this achievement was made by the courtesy of the cream of America’s smartest people in public and financial policies who led down America to the cesspool.
Utter nonsense. Globalization has raised the overall global standard of living. A more cost-efficient labor force is making our goods now. The average US consumer benefits from lower prices. The workers in China and India benefit from better wages. The losers, and there are some, are those workers, with little higher education, who were being paid far more than global labor markets deemed it worth.
Our mfring jobs which were being paid at overly high rates eventually succumbed and reverted back to the kinds of jobs they were. Low skill, low wage jobs. Sorry, but it’s true. Just look at how much they were paying GM workers before the recession, and how much they are paying VW workers at the new plant in Tennessee.
America will never join “the rank of a third-world order within a decade”. That is just moronic. People with little understanding want to blame someone, but you know, that’s capitalism. It’s what free markets are about. It’s what free markets have always done. It’s what the north did to the south. It’s what has happened since time immemorial, to the shoe industry where I live, the leather industry, the furniture industry, etc. This is not something that has happened recently, it has been evolving for centuries.
If you think you’re in a cesspool, maybe, you’re right, but the vast majority of the country is not there with you.
It’s always the blue collar workers that are overpaid for what they do never the white collar workers! And we all know those people deserve their pay and work so hard for it, and do everything to benefit the company.
More nonsense. It’s what market competition dictates. If US assembly line workers are more productive than Chinese assembly line workers then they’ll get the jobs. If Chinese white collar workers are more productive than US ones, then they’ll get the jobs. In fact, white collar jobs in financial analysis have been leaving for India. You move up the food chain or you get eaten by those who are.
Yea, because so many white collar jobs have gone overs seas !MORE NONSENSE. And it has to be these jobs go overseas because those workers are more productive! It never could be so the top brass can make more money! But making a statement like that I must begrudge the wealthy.
Geeze, effing louise. And, if you were the boss, and a group of workers in a neighboring town could do double the work for half the pay, what would you do? You’d be a fool not to move your jobs to that town. And, then, if it turned out that a group of workers in a neighboring state could do double that work, for half the pay, then what would you do? Yep, you’d be a fool if you didn’t move again. And, so on and so forth. That’s the way it has always been thru time immemorial. The jobs have always moved to where they could be produced the cheapest.
And, people who should know better, have always complained about the big bad boss, even though they know they’d do it too, and that it has been happening this way forever. Get over yourself.
Get over myself! Too funny! Since your so smart and say its always been that way, how did people use to be able to work for a company for 30 to 40 years and retire from that company? It must of been because the company ONLY thought about the bottom line, instead of taking care of its employees.
The world was alot smaller back then. When I was in grade school, my teacher asked how many of us had been to the town of Freeport, just 40 mins away, where the famous LL Bean store was located. Just 2 of 30 kids raised their hands. Today, no teacher would ask such a silly question.
THAT’s why I gave you the example starting from local, and expanding. Clearly, you didn’t get it. I’m sure you’re not stupid, but you sure are trying!
You can’t put the genie back in the bottle
Yea I guess you didn’t get my point either. So just like somebody that can’t have a debate about something or be questioned about the crap coming out of there mouth you resort to attacking someones intelligence. Beautiful! Just like a dog with a bark that’s louder than it’s bite.
What point again?
Thank you Apple!
I can now work at home writing iPhone software. It has been a dream come true.
The problem is that becoming an engineer takes years of serious school work. The combination of defunding schools and exalting ignorance does not bode well.
Hear, hear!
You don’t become an engineer in public school.
In real terms, US per student public school funding has gone up over time. That does not mean the education has improved. The fraction of employees who are teachers has decreased.
“The question is why there aren’t more Apples.”
IMHO the factors involved are:
(1) Decay of US education quality
(2) Consistent disrespect for the teaching profession
(3) Decay in the US culture whereby ‘nerds’ and ‘geeks’ and anyone with obvious intelligence are beaten down by the low self-esteem kids who want attention as well as scapegoats for their problems.
(4) Decay in the quality of business schools whereby an ‘MBA’ degree has become meaningless if not outright detrimental. What is taught is Bizarro World garbage that rewards marketing moron behavior (aka customer abuse, aka parasitism) while denigrating creativity and entrepreneurship. See #3 above for further insight.
IOW: The new Steve Jobs, Einstein, Bohr, Watson, Crick, etc., is out there in the world but found no incentive or opportunity to develop and grow to full potential. The degraded and self-destructive culture has buried them. It takes a hell-of-a strong personality to overcome the garbage inflicted by a deranged society.
Witness the ascension of the Tea Party and ‘ultimate truth’ mentalities. We’re thoroughly screwed.
I say again, “Hear, hear!”
Sorry, but genius is rare. Obsessive commitment to quality and belief in a singular vision is what separates Steve Jobs’ Apple from every other pretender. No matter the quality of US education, no matter how much respect for the teaching profession, no matter the culture, no matter the MBA, it wouldn’t matter.
Was Steve’s education better, or was it just Steve? I mean he didn’t graduate from college. He doesn’t have an MBA. Where’s the difference in the culture today from then? So, kids pick on the geeks, what’s new? Steve picked on the geeks too! Told people they should drop acid, etc.
Why do people want to make this political? Apple is unique. Genius can come from anywhere, at anytime. It can’t be codified.
There aren’t more Apples in America. There are damn few elsewhere as well.
Dyson is the only one that comes to mind.
I’m not so sure. those guys at Tesla Motors are doing some pretty Apple like stuff IMHO. Other than that, however, I can’t think of anyone else in the U.S.
Pretty short list. Also very sad.
Another perpepspective – why can’t the next generation of American innovation include the developing the next leap in manufacturing technology. That is – how to build/assemble these new types of products within the US. It would seem a joint venture between Apple’s design team and Universities would be a good first step. That and a little policy help from the Feds would go a long way.
Uhm, that would be a robotic assembly line. Steve did build a world-class assembly line for the Mac. I suppose he might do it again, seeing as he likes to revisit some old ideas and make them new again. Cube => Mac Mini and 5th Ave Store; Newton => iPhone; Knowledge Navigator => iPad.
Interesting points made Ken C. I believe that while governments can manipulate and affect (usually means screw up) the marketplace, ultimately labor moves where it can be done either more efficiently, better or cheaper. Often cheaper is the determining factor. Those who want to hang on to American jobs without making them more competitive will often admit that they buy foreign made goods because they believe they are getting a better product or a cheaper one. Apple engineering jobs are here because some Americans still lead as designers and inventors. In my thesis research in India China and the Philippines, I saw labor forces that would much prefer to be the designers and thinkers than the manufacturers. For this reason I believe that innovation creativity and vision are really valuable and are key in the pursuit of prosperity. Those traits seem to flourish where government allows the freedom to create. I hope others learn to follow Apple’s path in that way.
Dear Stupid Mr. EX-Mayor, Where do you think all of those units that are assembled for Apple overseas go???? To US ports!!!! If it weren’t for Apple, many of those dock workers would be unemployed you nitwit!
And, If it weren’t for the fact that at least 3 previous congress’ had denied Apple’s pleas for a tax break so they could build manufacturing facilities here in the States and bring jobs home, there might have been thousands of more people working here & paying taxes. Oh, and just for the record…. the dock workers would still be employed, maybe even more so because those units would be going out of our docks, and there would be more going out than there are coming in right now. Get it right or shut your pie hole Mr. EX-Mayor!