Explaining Southern California's economy

Apple and the jobs 'multiplier effect'

Apple-Jobs-Study

Apple

Should we be thankful for all that Apple has given us, including jobs?

Apple seems to be getting a little nervous about its self-image. First the technology giant, currently the world's most valuable company, came under fire for labor practices in China. In Asia, Apple keeps something like 700,000 people working, at numerous suppliers and contractors (at pay levels that would horrify the average American six-year-old on an allowance). In the U.S., however, the company has less than 50,000 people on the payroll, according to the New York Times

And as tech firms go, that's a lot. Facebook, for example, employs less than 5,000 people. To combat the impression than it's basically in the business of exporting employment in order to maintain its 30-percent profit margins, Apple commissioned a study to bolster the idea that it has directly or indirectly created more than half a million jobs (throw in another 200,000 or so if you count the developers who create apps for Apples devices), and that its business activities produce a "multiplier effect": for every job Apple directly creates, it generates, say eight jobs somewhere else in the American economy.

The study, which you can check out here, has been greeted with neither tears of joy nor yelps of approval. The scale of he multiplier effect has been disputed. That said, UPS is grateful to Apple for all the shipping activity. 

Of course, you can think of all this multiplier stuff as smoke and mirrors — or a Steve Jobsian "reality distortion field" — if you consider that Apple just created consumer products that employed people...involved in making Apple consumer products, rather than doing someting else. Additionally, no Apple wouldn't necessarily mean that the economic activity Apple has generated would have never occurred. This is from the NYT:

While several economists and employment experts agree that Apple has an economic impact that goes beyond the people it directly employs, they said it was difficult to conclude from Apple’s study what the company’s benefit is to the overall jobs market. “They certainly have a big economic impact, as does every other firm,” [Wharton School Prof. Peter] Cappelli said. “If you say, ‘If there had been no Apple, those people would not have jobs,’ that’s not true.”

As an example...if there were no iPad, the $500 an Apple customer would have spent on the device most likely would not have been put into savings, but rather spent on some other product or service. That impact could have been more or less than Apple’s. Apple is, however, an innovative company that created a market for tablets and radically increased demand for smartphones.

Follow Matthew DeBord and the DeBord Report on Twitter.

blog comments powered by Disqus