TIMOTHY NOAH OCTOBER 6, 2011
Steve Jobs was the greatest manufacturer of consumer products of his age. His marketing vision put him on par with Henry Ford, and his grasp of the aesthetic component to industrial design far surpassed Ford’s. But Jobs differed from Ford in one significant way. His surname to the contrary, he did not create a lot of American jobs.
I raise this point not to single out Jobs, whose tendency to “offshore” manufacturing jobs followed economic imperatives not of his making. He did what his contemporaries in America’s younger and more flexible manufacturing companies did. Rather, my purpose is to illustrate the perplexing failure even of one of America’s most stunningly successful companies to provide domestic employment on anything like the scale that America was once able to take for granted.
During the 1930s more than 100,000 people worked at Ford’s River Rouge plant. That’s more than twice as many people as Apple today employs in the entire world.
In 2006, according to the University of California Irvine's Personal Computing industry Center, the number of people worldwide involved in making and selling Apple’s iPod (which includes Apple employees and non-Apple employees) totaled a mere 41,170. Of those, only 13,920 were employed within the United States. The portion of that 13,920 consisting of production workers was paid decently: the U.S.-based production workers made $47,640 on average. (For production jobs in all U.S. business sectors, the average wage that year was $30,480.) But would you like to guess how many U.S.-based production workers Apple actually had building iPods in 2006, the year the total number of iPods sold jumped from 42 million to 88 million?
Oh, c’mon, guess.
A thousand? Nope, that’s too high.
Five hundred? Still too high.
One hundred? Still too high.
The U.S.-based production workers numbered 30. None of them actually worked for Apple. (They were all chip fabricators.) The iPod production workers were mainly concentrated in China (11,715) and the Philippines (4,500).
Who were those 13,920 American workers? A little less than half were professionals (mainly engineers), who made on average $85,000, and a little more than half were nonprofessionals (mainly retail clerks) who made on average $25,580. In the aggregate, Apple paid more in wages to the U.S.-based workers than it paid to its entire foreign supply chain, even though the latter constituted about two-thirds of all the workers involved in making and selling the iPod. That, of course, mainly reflects how cheap Chinese and Filipino labor is.
Again, my point is not to condemn Jobs or Apple. But I don’t mind condemning sanctimonious Republicans who insist that raising taxes on incomes above $250,000 or $1 million constitutes an assault on “job creators.” Even the most creative of America’s cutting-edge entrepreneurs simply don’t create all that many jobs anymore. If you shelter this group from paying their fair share of taxes you aren’t going to do much (if anything) to create jobs.