AMITIAE - Thursday 3 May 2012
Economics 101: Business Insider and Apple Job Creation
By Graham K. Rogers
They know that, they write for a business newspaper. This really is a hatchet job as the two of them try and place the blame for other companies' closures and layoffs at Apple's door, then cop out with, "But that's another story."
Actually, it is not. To suggest that Apple is wholly responsible for Cisco's Flip Camera closure or AOL's shrinking, because of the iPhone, or because Google was preferred (at least back then), or that Apple should have chosen the US postal service, when no one else does, rather than FedEx or DHL (Apple's Cards uses the US Postal service), is disingenuous at the very best. Any company is expected to make decisions that are in its (and the shareholders') best interests. Not to do so, would be the real failure.
The list of companies that are used on the second page of the article is a joke. All of these were either in trouble (e.g. Kodak, Sony, HP) which had little to with Apple and some (for example IBM) have also moved a considerable part of their operations abroad. It becomes risible when the list includes Microsoft. The problem is, that these may have failed as a result of bad management in the face of Apple's successes. They failed to see some vivid writing on the wall. There ought to be no blame for that levelled at Apple.
There are some small remnants, but these industries are no longer the major employers they were. The demise of coal and steel hit some regions particularly hard with whole towns out of work overnight. If the population does not have the ability to spend, the services that used to support them (food, clothing, transport) also have reduced income and in their turn are forced to contract, which usually ends up with more out of work.
Many of the areas that were depressed in the 1980s and later, have now revived to an extent. Some of those who were made redundant were able to to retrain themselves and there were some exceptional successes, like the late Jim Hesselden who developed the Hesco bastion (for flood management) and with the fortune he made from that bought Segway. He was later killed while riding one.
While other tales are less dramatic, large areas of towns like Sheffield (formerly steel and coal) and Newcastle (shipbuilding and coal) have evolved in terms of the industries they now host. As a note, Nottingham is less well known for its lace and bicycles nowadays owing to changes in lifestyles of those who would have bought these products. Like the cities above (and others) Nottingham industries have evolved to reflect the changing needs of the society as a whole.
These few sentences hardly reflect the major changes that occurred throughout industrial Britain after the 1980s and which also occurred elsewhere. The world's economies have seen some major changes, partly due to the problems in US banks, which saw credit problems. If companies do not have credit with which to buy the materials (or pay the staff) they are also forced into making unwelcome changes: not money, but credit helps the world go round.
With the highest figures for 2010 in Denmark ($57.53), the United States figure then was $34.74. The same cost in Estonia, Hungary, Taiwan, Poland, and Mexico were all below $10, with the Philippines at $1.90. Not all countries were covered in the news release from the Bureau of Labor Statistics, US Department of Labor.
We note that this week, Ford has opened a new plant in Thailand to make something like 150,000 cars for the region. Aren't these jobs that could have gone to American cities; or the General Motors diesel engine factory here?
As older, more traditional manufacturing industries contract, different businesses are created. There were no Apple stores in 2000. There are now almost 400 worldwide, many of which are in the US: jobs created. There are also Apple outlets in a number of more mainstream stores, such as Walmart and Target.
At Cupertino and the surrounding areas, there are thousands of new jobs within Apple -- as a hardware company, its major expansions are in software and services. The expansion of the company (taking the parallel of the contractions in the UK in the 1990s) -- no matter how Platt and Duronio fudge the figures -- is creating new jobs in related industries, service industries and even education (presumably the kids have to be educated).
A black colleague at Illinois State University, describing black Chicago culture to me (as a naive Brit) in 1986, called this the "Chicken in the Barrel" syndrome: when one chicken rises above the rest, the others pull it down.
Actions have consequences.
Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs.
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