Let's examine the economic challenges that were imposed on typical
middle-class American workers - - changes that were brought about by the
increasingly globalized high-tech industries such as Apple.
When Barack Obama joined Silicon Valley’s top luminaries for
dinner in California last February, each guest was asked to come with a
question for the president.
But as Steve Jobs of
Apple spoke, President Obama interrupted him with an
inquiry of his own, "What would it take to make iPhones in the United
States? Why can’t that work come home?"
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back."
(The photo above created by Bud Meyers)
The
iEconomy: An Empire Built Abroad -
From the series written by Charles Duhigg and Keith Bradsher for the New
York Times. David Barboza, Peter Lattman and Catherine Rampell also
contributed. (Moderated by Bud Meyers)
Not long ago, Apple boasted that its products were made in America. Today,
few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million
other products Apple sold last year were manufactured overseas.
The president’s question touched upon a central conviction at Apple. It isn’t
just that workers are cheaper abroad. Rather, Apple’s executives believe the
vast scale of overseas factories as well as the flexibility, diligence and
industrial skills of foreign workers have so outpaced their American
counterparts that “Made in the U.S.A.” is no longer a viable option for most
Apple products.
Apple has become one of the best-known, most admired and most imitated
companies on earth, in part through an unrelenting mastery of global operations.
Last year, it earned over $400,000 in profit per employee, more than Goldman
Sachs, Exxon Mobil or Google.
However, what has vexed Mr. Obama as well as economists and policy makers is
that Apple — and many of its high-technology peers — are not nearly as avid
in creating American jobs as other famous companies were in their heydays.
Apple employs 43,000
people in the United States and 20,000 overseas, a small fraction of the
over 400,000 American workers at General Motors in the 1950s, or the hundreds of
thousands at General Electric in the 1980s.
But many more people work for Apple’s contractors: an additional 700,000
people engineer, build and assemble iPads, iPhones and Apple’s other products.
But almost none of them work in the United States. Instead, they work for
foreign companies in Asia, Europe and elsewhere, at factories that almost all
electronics designers rely upon to build their wares.
|
BELOW: People flooded Foxconn with
résumés at a 2010 job fair in Henan Province, China. (Photo by Donald
Chan for Reuters)
 |
“Apple’s an example of why it’s so hard to create middle-class jobs in
the U.S. now,” said Jared
Bernstein, who until last year, was an economic adviser to the White House.
“If it’s the pinnacle of capitalism, we should be worried.”
Apple executives say that going overseas, at this point, is their only
option. One former executive described how the company relied upon a Chinese
factory to revamp iPhone manufacturing just weeks before the device was due on
shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing
an assembly line overhaul. New screens began arriving at the plant near
midnight.
A foreman immediately roused 8,000 workers inside the company’s
dormitories, according to the executive. Each employee was given a biscuit and a
cup of tea, guided to a workstation and within half an hour started a 12-hour
shift fitting glass screens into beveled frames. Within 96 hours, the plant was
producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s
no American plant that can match that.”
| *
Moderator: And we also don't pay American workers $1 an
hour to live on.
Couldn't some of these ultra-wealthy Americans on the Forbes
400 List, such as Bill Gates for example, have hired American
workers and paid them a "living wage"? Instead of
acquiring a personal fortune of $59 billion, couldn't Bill Gates
have been just as satisfied with $20 billion?
Or is this called "redistributing the wealth"?
Microsoft:
Outsourcing as a Business Model: Hypothetically speaking,
Bill Gate could have hired 35,000 American workers at
$50,000-a-year for the past 22 years (from 1990 to 2012) and still
had a personal net worth of $20 billion -- and Bill Gates would
have still been ranked at #12 with Michael Bloomberg on the Forbes
400 List. |
|
Similar stories could be told about almost any electronics company — and
outsourcing has also become common in hundreds of industries, including
accounting, legal services, banking, auto manufacturing and pharmaceuticals.
But while Apple is far from alone, it offers a window into why the success of
some prominent companies has not translated into large numbers of domestic jobs.
What’s more, the company’s decisions pose broader questions about what
corporate America owes Americans as the global and national economies are
increasingly intertwined.
“Companies once felt an obligation to support American workers, even when
it wasn’t the best financial choice,” said Betsey Stevenson, the chief
economist at the Labor Department until last September. “That’s disappeared.
Profits and efficiency have trumped generosity.” (Moderator: I also would have
mentioned raw greed.)
Companies and other economists say that notion is naïve. Though Americans
are among the most educated workers in the world, the nation has stopped
training enough people in the mid-level skills that factories need, executives
say.
To thrive, companies argue they need to move work where it can generate
enough profits to keep paying for innovation. Doing otherwise risks losing even
more American jobs over time, as evidenced by the legions of once-proud domestic
manufacturers — including G.M. and others — that have shrunk as nimble
competitors have emerged.
Apple was provided with extensive summaries of The New York Times’s
reporting for this
article, but the company, which has a reputation for secrecy, declined to
comment.
This article is based on interviews with more than three dozen current and
former Apple employees and contractors — many of whom requested anonymity to
protect their jobs — as well as economists, manufacturing experts,
international trade specialists, technology analysts, academic researchers,
employees at Apple’s suppliers, competitors and corporate partners, and
government officials.
Privately, Apple executives say the world is now such a changed place that it is
a mistake to measure a company’s contribution simply by tallying its employees
— though they note that Apple employs more workers in the United States than
ever before.
They say Apple’s success has benefited the economy by empowering entrepreneurs
and creating jobs at companies like cellular providers and businesses shipping
Apple products. And, ultimately, they say curing unemployment is not their job.
“We sell iPhones in over a hundred countries,” a current Apple executive
said. “We don’t have an obligation to solve America’s problems. Our only
obligation is making the best product possible.” (Moderator: This is typical
thinking in corporate mentality. There is no patriotism for the country that
enabled these companies to prosper.)
"I Want a Glass Screen"
In 2007, a little over a month before the iPhone was scheduled to appear in
stores, Mr. Jobs beckoned a handful of capos lieutenants into
an office. For weeks, he had been carrying a prototype of the device in his
pocket.
Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens
of tiny scratches marring its plastic screen, according to someone who attended
the meeting. He then pulled his keys from his jeans.
People will carry this phone in their pocket, he said. People also carry their
keys in their pocket. “I won’t sell a product that gets scratched,” he
said tensely. The only solution was using unscratchable glass instead. “I want
a glass screen, and I want it perfect in six weeks.”
After one executive left that meeting, he booked a flight to Shenzhen, China. If
Mr. Jobs wanted perfect, there was nowhere else to go. (Moderator: Perfection
can now only be found
in China?)
For over two years, the company had been working on a project — code-named
Purple 2 — that presented the same questions at every turn: how do you
completely reimagine the cellphone? And how do you design it at the highest
quality — with an unscratchable screen, for instance — while also ensuring
that millions can be manufactured quickly and inexpensively enough to earn a
significant profit?
The answers, almost every time, were found outside the United States. Though
components differ between versions, all iPhones contain hundreds of parts, an
estimated 90 percent of which are manufactured abroad. Advanced semiconductors
have come from Germany and Taiwan, memory from Korea and Japan, display panels
and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from
Africa and Asia. And all of it is put together in China.
In its early days, Apple usually didn’t look beyond its own backyard for
manufacturing solutions. A few years after Apple began building the Macintosh in
1983, for instance, Mr. Jobs bragged that it was “a
machine that is made in America.” In 1990, while Mr. Jobs was running
NeXT, which was eventually bought by Apple, the executive told a reporter that
“I’m
as proud of the factory as I am of the computer.” As late as 2002, top
Apple executives occasionally drove two hours northeast of their headquarters to
visit the company’s iMac plant in Elk Grove, Calif.
But by 2004, Apple had largely turned to foreign manufacturing. Guiding that
decision was Apple’s operations expert, Timothy D. Cook, who replaced Mr. Jobs
as chief executive last August, six weeks before Mr. Jobs’s death. Most other
American electronics companies had already gone abroad, and Apple, which at the
time was struggling, felt it had to grasp every advantage.
Moderator: (per
Wiki) 2004 was a turning point for Apple. After creating a
sizable financial base to work with, the company began
experimenting with new parts from new suppliers. As a result Apple
was able to produce new designs so quickly over a short amount of
time, with the release of the iPod Video, then the iPod Classic,
and eventually the iPod touch and iPhone. Each Apple product thus
far has been under equally high demand.
Through the 1990s, personal computers based on Microsoft's Windows
operating system began to gain a much larger percentage of new
computer users than Apple. As a result, Apple fell from
controlling 20% of the total personal computer market to 5% by the
end of the decade. The company was struggling financially under
then-CEO Gil Amelio when on August 6, 1997 Microsoft bought a
US$150 million non-voting share of the company as a result of a
court settlement with Apple.
Perhaps more significantly, Microsoft simultaneously announced
its continued support for Mac versions of its office suite,
Microsoft Office, and soon created a Macintosh Business Unit. This
reversed the earlier trend within Microsoft that resulted in poor
Mac versions of their software and has resulted in several
award-winning releases. However, Apple's market share continued to
decline, reaching 3% by 2004. |
|
In part, Asia was attractive because the semiskilled workers there were
cheaper. (Read: America's
Race to the Bottom)
But that wasn’t driving Apple. For technology companies, the cost of labor
is minimal compared with the expense of buying parts and managing supply chains
that bring together components and services from hundreds of companies.
For Mr. Cook, the focus on Asia “came down to two things,” said one
former high-ranking Apple executive. Factories in Asia “can scale up and down
faster” and “Asian supply chains have surpassed what’s in the U.S.” The
result is that “we can’t compete at this point,” the executive said.
The impact of such advantages became obvious as soon as Mr. Jobs demanded
glass screens in 2007.
For years, cellphone makers had avoided using glass because it required
precision in cutting and grinding that was extremely difficult to achieve. Apple
had already selected an American company, Corning Inc., to manufacture large
panes of strengthened glass. But figuring out how to cut those panes into
millions of iPhone screens required finding an empty cutting plant, hundreds of
pieces of glass to use in experiments and an army of midlevel engineers. It
would cost a fortune simply to prepare.
Then a bid for the work arrived from a Chinese factory.
When an Apple team visited, the Chinese plant’s owners were already
constructing a new wing. “This is in case you give us the contract,” the
manager said, according to a former Apple executive. The Chinese government
had agreed to underwrite costs for numerous industries, and those subsidies
had trickled down to the glass-cutting factory. It had a warehouse filled with
glass samples available to Apple, free of charge. The owners made engineers
available at almost no cost. They had built on-site
dormitories so slave labor employees would be available 24
hours a day.
The Chinese plant got the job.
“The entire supply chain is in China now,” said another former high-ranking
Apple executive. “You need a thousand rubber gaskets? That’s the factory
next door. You need a million screws? That factory is a block away. You need
that screw made a little bit different? It will take three hours.”
In Foxconn City
An eight-hour drive from that glass factory is a complex, known informally as
Foxconn City, where the iPhone is assembled. To Apple executives, Foxconn City
was further evidence that China could deliver workers — and diligence — that
outpaced their American counterparts.
That’s because nothing like Foxconn City exists in the United States.
(Moderator: Slavery in the United States ended after our Civil War.)
|
BELOW: A production line in Foxconn City
in Shenzhen, China. The iPhone is assembled in this vast
facility, which has 230,000 employees. Many at the plant work up to 12
hours a day, six days a week. (Photo by Thomas Lee for Bloomberg
News)  |
The facility has 230,000 employees, many working six days a week, often
spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work
force lives in company barracks. (Moderator: Photos
of suicide nets here). Many workers earn less than $17 a day. When one Apple
executive arrived during a shift change, his car was stuck in a river of
employees streaming past. “The scale is unimaginable,” he said.
Foxconn employs nearly 300 guards to direct foot traffic so workers are not
crushed in doorway bottlenecks. The facility’s central kitchen cooks an
average of three tons of pork and 13 tons of rice a day. While factories are
spotless, the air inside nearby teahouses is hazy with the smoke and stench of
cigarettes.
Foxconn Technology has dozens of facilities in Asia and Eastern Europe, and in
Mexico and Brazil, and it assembles an estimated 40 percent of the world’s
consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola,
Nintendo, Nokia, Samsung and Sony.
“They could hire 3,000 people overnight,” said Jennifer Rigoni, who was
Apple’s worldwide supply demand manager until 2010, but declined to discuss
specifics of her work. “What U.S. plant can find 3,000 people overnight and
convince them to live in dorms?” (Moderator: More
on China's sweatshops and slave labor here.)
In mid-2007, after a month of experimentation, Apple’s engineers finally
perfected a method for cutting strengthened glass so it could be used in the
iPhone’s screen. The first truckloads of cut glass arrived at Foxconn City in
the dead of night, according to the former Apple executive. That’s when
managers woke thousands of workers, who crawled into their uniforms — white
and black shirts for men, red for women — and quickly lined up to assemble, by
hand, the phones. Within three months, Apple had sold one million iPhones. Since
then, Foxconn has assembled over 200 million more. (Moderator: Steve Jobs was
realizing the American Dream).
Foxconn, in statements, declined to speak about specific clients.
“Any worker recruited by our firm is covered by a clear contract outlining
terms and conditions and by Chinese government law that protects their rights,”
the company wrote. Foxconn “takes our responsibility to our employees very
seriously and we work hard to give our more than one million employees a safe
and positive environment.”
The company disputed some details of the former Apple executive’s account,
and wrote that a midnight shift, such as the one described, was impossible “because
we have strict regulations regarding the working hours of our employees based on
their designated shifts, and every employee has computerized timecards that
would bar them from working at any facility at a time outside of their approved
shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and
that employees receive at least 12 hours’ notice of any schedule changes.
Foxconn employees, in interviews, have challenged those assertions. (Moderator:
See the links with videos below this article.)
Another critical advantage for Apple was that China provided engineers at a
scale the United States could not match. (Moderator: Because engineers
or new graduates in computer science in China might only earn 10,000
RMB a month - - 10,000 Chinese yuan -- about $1,500 a month USD.)
Apple’s executives had estimated that about 8,700 industrial engineers were
needed to oversee and guide the 200,000 assembly-line workers [low skilled
workers] eventually involved in manufacturing iPhones. The company’s analysts
had forecast it would take as long as nine months to find that many qualified engineers
in the United States.
In China, it took 15 days.
Companies like Apple “say the challenge in setting up U.S. plants is finding a
technical work force,” said Martin Schmidt, associate provost at the
Massachusetts Institute of Technology. In particular, companies say they need
"engineers" with more than high school, but not necessarily a
bachelor’s degree. Americans at that skill level are hard to find,
executives contend. “They’re good jobs, but the country doesn’t have
enough to feed the demand,” Mr. Schmidt said.
Some aspects of the iPhone are uniquely American. The device’s software, for
instance, and its innovative marketing campaigns were largely created in the
United States. Apple recently built a $500 million data center in North
Carolina. Crucial semiconductors inside the iPhone 4 and 4S are manufactured in
an Austin, Tex., factory by Samsung, of South Korea.
But even those facilities are not enormous sources of jobs. Apple’s North
Carolina center, for instance, has only 100 full-time employees. The Samsung
plant has an estimated 2,400 workers. (Moderator: Instead of building factories
in low-taxed and low-populated areas, build them nearer to larger populations
centers.)
“If you scale up from selling one million phones to 30 million phones, you don’t
really need more programmers,” said Jean-Louis Gassée, who oversaw product
development and marketing for Apple until he left in 1990. “All these new
companies — Facebook, Google, Twitter — benefit from this. They grow, but
they don’t really need to hire much.”
It is hard to estimate how much more it would cost to build iPhones in the
United States. However, various academics and manufacturing analysts estimate
that because labor is such a small part of technology manufacturing, paying
American wages would add up to $65 to each iPhone’s expense. Since Apple’s
profits are often hundreds of dollars per phone, building domestically, in
theory, would still give the company a healthy reward. (Moderator: And what have
we been complaining about all along?)
But such calculations are, in many respects, meaningless because building the
iPhone in the United States would demand much more than hiring Americans — it
would require transforming the national and global economies. Apple executives
believe there simply aren’t enough American workers with the skills the
company needs or factories with sufficient speed and flexibility. Other
companies that work with Apple, like Corning, also say they must go abroad.
(Moderator: This is total B.S.)
Manufacturing glass for the iPhone revived a Corning factory in Kentucky, and
today, much of the glass in iPhones is still made there. After the iPhone became
a success, Corning received a flood of orders from other companies hoping to
imitate Apple’s designs. Its strengthened glass sales have grown to more than
$700 million a year, and it has hired or continued employing about 1,000
Americans to support the emerging market.
But as that market has expanded, the bulk of Corning’s strengthened glass
manufacturing has occurred at plants in Japan and Taiwan.
“Our customers are in Taiwan, Korea, Japan and China,” said James B.
Flaws, Corning’s vice chairman and chief financial officer. “We could make
the glass here, and then ship it by boat, but that takes 35 days. Or, we could
ship it by air, but that’s 10 times as expensive. So we build our glass
factories next door to assembly factories, and those are overseas.”
(Moderator: So then just in-source your factories to America, and only export
the final products.)
Corning was founded in America 161 years ago and its headquarters are still
in upstate New York. Theoretically, the company could manufacture all its glass
domestically. But it would “require a total overhaul in how the industry is
structured,” Mr. Flaws said. “The consumer electronics business has become
an Asian business. As an American, I worry about that, but there’s nothing I
can do to stop it. Asia has become what the U.S. was for the last 40 years.”
Middle-Class Jobs Fade
The first time Eric Saragoza stepped into Apple’s manufacturing plant in Elk
Grove, Calif., he felt as if he were entering an engineering wonderland.
It was 1995, and the facility near Sacramento employed more than 1,500 workers.
It was a kaleidoscope of robotic arms, conveyor belts ferrying circuit boards
and, eventually, candy-colored iMacs in various stages of assembly. Mr. Saragoza,
an engineer, quickly moved up the plant’s ranks and joined an elite diagnostic
team. His salary climbed to $50,000. He and his wife had three children. They
bought a home with a pool.
“It felt like, finally, school was paying off,” he said. “I knew the world
needed people who can build things.”
At the same time, however, the electronics industry was changing, and Apple —
with products that were declining in popularity — was struggling to remake
itself. One focus was improving manufacturing. A few years after Mr. Saragoza
started his job, his bosses explained how the California plant stacked up
against overseas factories: the cost, excluding the materials, of building a
$1,500 computer in Elk Grove was $22 a machine. In Singapore, it was $6. In
Taiwan, $4.85. Wages weren’t the major reason for the disparities. Rather it
was costs like inventory and how long it took workers to finish a task.
“We were told we would have to do 12-hour days, and come in on Saturdays,”
Mr. Saragoza said. “I had a family. I wanted to see my kids play soccer.”
Modernization has always caused some kinds of jobs to change or disappear. As
the American economy transitioned from agriculture to manufacturing and then to
other industries, farmers became steelworkers, and then salesmen and middle
managers. These shifts have carried many economic benefits, and in general, with
each progression, even unskilled workers received better wages and greater
chances at upward mobility.
But in the last two decades, something more fundamental has changed, economists
say. Midwage jobs started disappearing. Particularly among Americans without
college degrees, today’s new jobs are disproportionately in service
occupations — at restaurants or call centers, or as hospital attendants or
temporary workers — that offer fewer opportunities for reaching the middle
class.
Even Mr. Saragoza, with his college degree, was vulnerable to these trends.
First, some of Elk Grove’s routine tasks were sent overseas. Mr. Saragoza didn’t
mind. Then the robotics that made Apple a futuristic playground allowed
executives to replace workers with machines. (Moderator: And now Foxconn
wants to use robots, because they're not only cheaper than paying wages,
robots are also easier to manage and "don't commit suicide".)
Some diagnostic engineering went to Singapore. Middle managers who oversaw
the plant’s inventory were laid off because, suddenly, a few people with
Internet connections were all that were needed.
Mr. Saragoza was too expensive for an unskilled position. He was also
insufficiently credentialed for upper management. He was called into a small
office in 2002 after a night shift, laid off and then escorted from the plant.
He taught high school for a while, and then tried a return to technology. But
Apple, which had helped anoint the region as “Silicon Valley North,” had by
then converted much of the Elk Grove plant into an AppleCare call center, where
new employees often earn $12 an hour.
There were employment prospects in Silicon Valley, but none of them panned
out. “What they really want are 30-year-olds without children,” said Mr.
Saragoza, who today is 48, and whose family now includes five of his own.
After a few months of looking for work, he started feeling desperate. Even
teaching jobs had dried up. So he took a position with an electronics temp
agency that had been hired by Apple to check returned iPhones and iPads before
they were sent back to customers. Every day, Mr. Saragoza would drive to the
building where he had once worked as an engineer, and for $10 an hour with no
benefits, wipe thousands of glass screens and test audio ports by plugging in
headphones. (Moderator: We now have about 27
million Americans in the same boat as Mr. Saragoza, thanks in part to
American corporations like Apple.)
Paydays for Apple
As Apple’s overseas operations and sales have expanded, its top employees have
thrived. Last fiscal year, Apple’s revenue topped $108 billion, a sum larger
than the combined state budgets of Michigan, New Jersey and Massachusetts. Since
2005, when the company’s stock split, share prices have risen from about $45
to more than $427.
Some of that wealth has gone to shareholders. Apple is among the most widely
held stocks, and the rising share price has benefited millions of individual
investors, 401(k)’s
and pension plans. The bounty has also enriched Apple workers. Last fiscal year,
in addition to their salaries, Apple’s employees and directors received stock
worth $2 billion and exercised or vested stock and options worth an added $1.4
billion.
The biggest rewards, however, have often gone to Apple’s top employees. Mr.
Cook, Apple’s chief, last year received stock
grants — which vest over a 10-year period — that, at today’s share
price, would be worth $427 million, and his salary was raised to $1.4 million.
In 2010, Mr. Cook’s compensation package was valued at $59 million, according
to Apple’s security filings.
A person close to Apple argued that the compensation received by Apple’s
employees was fair, in part because the company had brought so much value to the
nation and world. As the company has grown, it has expanded its domestic work
force, including manufacturing jobs. Last year, Apple’s American work force
grew by 8,000 people. (Moderator: I repeat, we now have about 27
million Americans in the same boat as Mr. Saragoza, thanks in part to
American corporations like Apple.)
While other companies have sent call centers abroad, Apple has kept its centers
in the United States. One source estimated that sales of Apple’s products have
caused other companies to hire tens of thousands of Americans. FedEx and United
Parcel Service, for instance, both say they have created American jobs because
of the volume of Apple’s shipments, though neither would provide specific
figures without permission from Apple, which the company declined to provide.
“We shouldn’t be criticized for using Chinese workers,” a current Apple
executive said. “The U.S. has stopped producing people with the skills we
need.” (* Moderator: Assembly line workers, welders, truck drivers, packagers,
and janitors, etc. don't need any special "skills" when they can
easily earn with only one day of on-the-job training.)
What’s more, Apple sources say the company has created plenty of good American
jobs inside its retail stores and among entrepreneurs selling iPhone and iPad
applications (Moderator: They barely earn over minimum wage.)
After two months of testing iPads, Mr. Saragoza quit. The pay was so low that
he was better off, he figured, spending those hours applying for other jobs.
On a recent October evening, while Mr. Saragoza sat at his MacBook and
submitted another round of résumés online, halfway around the world a woman
arrived at her office. The worker, Lina Lin, is a project manager in Shenzhen,
China, at PCH International, which contracts with Apple and other electronics
companies to coordinate production of accessories, like the cases that protect
the iPad’s glass screens. She is not an Apple employee. But Mrs. Lin is
integral to Apple’s ability to deliver its products.
|
BELOW: In China, Lina Lin is a project
manager at PCH International, which contracts with Apple.
"There are lots of jobs," she said. "Especially in
Shenzhen." (Photo by Thomas Lee for the New York Times)
 |
Mrs. Lin earns a bit less than what Mr. Saragoza was paid by Apple. She
speaks fluent English, learned from watching television and in a Chinese
university. She and her husband put a quarter of their salaries in the bank
every month. They live in a 1,080-square-foot apartment, which they share with
their in-laws and son.
“There are lots of jobs,” Mrs. Lin said. “Especially in Shenzhen.”
Innovation’s Losers
Toward the end of Mr.
Obama’s dinner last year with Mr. Jobs and other Silicon Valley
executives, as everyone stood to leave, a crowd of photo seekers formed around
the president. A slightly smaller scrum gathered around Mr. Jobs. Rumors had
spread that his illness had worsened, and some hoped for a photograph with him,
perhaps for the last time.
Eventually, the orbits of the men overlapped. “I’m not worried about the
country’s long-term future,” Mr. Jobs told Mr. Obama, according to one
observer. “This country is insanely great. What I’m worried about is that we
don’t talk enough about solutions.”
At dinner, for instance, the executives had suggested that the government
should reform visa programs to help companies hire foreign engineers.
(Moderator: At depressed wages, putting more Americans out of work.)
Some had urged the president to give companies a “tax holiday” so they
could bring back overseas profits which, they argued, would be used to create
work (Moderator: Total B.S. They
already sit on over $2 trillion and won't hire -- because they don't need
to.)
Mr. Jobs even suggested it might be possible, someday, to locate some of
Apple’s skilled manufacturing in the United States if the government helped
train more American engineers.
Economists debate the usefulness of those and other efforts, and note that a
struggling economy is sometimes transformed by unexpected developments. The last
time analysts wrung their hands about prolonged American unemployment, for
instance, in the early 1980s, the Internet hardly existed. Few at the time would
have guessed that a degree in graphic design was rapidly becoming a smart bet,
while studying telephone repair a dead end.
What remains unknown, however, is whether the United States will be able to
leverage tomorrow’s innovations into millions of jobs. (Moderator: We might if
we nationalized the energy industries. Read: Keystone
Pipeline: It's WE who should get into the oil business!)
In the last decade, technological leaps in solar and wind energy,
semiconductor fabrication and display technologies have created thousands of
jobs. But while many of those industries started in America, much of the
employment has occurred abroad. Companies have closed major facilities in the
United States to reopen in China. By way of explanation, executives say they are
competing with Apple for shareholders. If they cannot rival Apple’s growth and
profit margins, they won’t survive. (Moderator: I suggest that these all
American job creators "job killers" should be forced
to forfeit their American citizenships and live in China.)
“New middle-class jobs will eventually emerge,” said Lawrence Katz, a
Harvard economist. “But will someone in his 40s have the skills for them? Or
will he be bypassed for a new graduate and never find his way back into the
middle class?” (Moderator: We already have about 6
million unemployed graduates.)
The pace of innovation, say executives from a variety of industries, has been
quickened by businessmen like Mr. Jobs. G.M. went as long as half a decade
between major automobile redesigns( Moderator: While
using crony capitalism). Apple, by comparison, has released five iPhones in
four years, doubling the devices’ speed and memory while dropping the price
that some consumers pay. (Moderator: Full disclosure - I have never owned
or used an Apple product, and I have lived my life very well without them.)
Before Mr. Obama and Mr. Jobs said goodbye, the Apple executive pulled an iPhone
from his pocket to show off a new application — a driving game — with
incredibly detailed graphics. The device reflected the soft glow of the room’s
lights. The other executives, whose combined worth exceeded $69 billion, jostled
for position to glance over his shoulder. The game, everyone agreed, was
wonderful.
There wasn’t even a tiny scratch on the screen. (Moderator: Just what the
world needed... a fricking driving game, with 27 million less American
jobs to show for it. Thanks Mister Jobs. Thanks to you and all those on the Forbes
400 List for screwing over the middle-class --- R.I.P.)
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