Four years into a global recession, and U.S. firms continue to vie for political brownie points that come with being seen as a job creator, rather than a job outsourcer. Even so, most of the large technology firms of today are known to be far less labor-intensive than their industrial counterparts back in the heyday of US manufacturing, the General Motors and equivalent corporations of the 1950’s.
For example, when the fact that Facebook has about 2,000 employees came out in the media, it caused quite a stir.
Nowadays, with the President’s job council headed by Jeffrey Immelt, the CEO of General Electric, and the U.S. Government unemployment report due out this coming Friday, March 9, 2012, it is hard to imagine more pressure from the powers that be, breathing down the neck of the firm whose valuation is at the very top of the leaderboard worldwide-- Apple.
Perhaps in response to this political football, or in any case as part of the national debate, Apple has publicly shared its data on how many American jobs were “created or supported” by its manufacturing and retail operations. By definition, it uses this term to refer to jobs on its U.S. payroll, along with jobs created at Apple's vendors, e.g. people who build the trucks that deliver ordered goods, jobs at corporate headquarters, engineers, retail employees and so forth.
Apple, located in the heart of Silicon Valley, in Cupertino, CA, released the study on its website, but declined to describe why it made this effort to quantify its impact on the nation’s labor market. Presumably it would not want to be seen as sacrificing the well being of American workers, at a time when its labor practices overseas are being increasingly scrutinized.
The total of 514,000 jobs breaks down into three segments: 210,000 iOS app economy jobs, which reflect the skyrocketing rate of app adoption as a modus operandi for consumers in general; 47,000 jobs for people on the Apple payroll itself; and 247,000 jobs at other companies, a catch-all category that runs the gamut from high-paying professional positions to low-wage hourly work.
These “other company” jobs include the following six classifications:
• the development and manufacturing of components, materials and equipment
• professional, scientific, and technical services
• consumer sales (retail workers)
• business sales
Apple makes the case that the jobs created and supported by its operations hit the economy of all 50 states. This seems plausible since Apple products are available everywhere, and are ubiquitous.
However, there are experts who raise the obvious question of the motive of such a study, especially as the number of workers that are employed directly at Apple’s stateside locations, a total of 47,000, is so much lower.
“Apple has a big effect, and big is about as precise as I can make it,” was the comment that Gary P. Pisano offered the New York Times, in regard to the accuracy of Apple’s projections.
The study itself used an outside contractor, in this case, The Analysis Group. Headquartered in Boston, they employ more than 500 professionals. The Analysis Group focuses on economic, financial and strategy consulting, and while such a public piece of work for the likes of a titan like Apple would seem to be ripe for a Press Release, there is not a single mention of work they did for Apple, on their website.
Nevertheless, economic modeling almost always takes some assumptions and applies formulas in order to quantify the impact of macroeconomic events, on job creation. In this case, they analyzed how much Apple spent on goods and services directly in the United States over the last full calendar year (2011), and applied a formula called the “multiplier effect” to that initial starting value. The multiplier effect that was utilized is not controversial, as it was itself derived from work done by the federal government’s Bureau of Economic Analysis. Combined together, The Analysis group estimated that Apple’s spending directly and indirectly created a pool of 247,000 jobs at other firms.
Possibly a job creation success story, or possibly a case of shaping the public debate to defend itself from critics at large.
Photo courtesy of Creative Commons 2.0, fairfaxcounty.