Job creators?

As manufacturing jobs have been erased or shipped overseas, the focus has been on so-called white-collar, technology jobs as a source of job growth. Well, let’s look at some numbers, based on market capitalization:

Company Market Cap ($Billion U.S.) U.S. Jobs (In Thousands)
Apple 422 50
Microsoft 402 55
Google 289 32
Oracle 159 85 (worldwide)
Facebook 90 4

So, we have the five largest information technology companies with a combined market value of $1362 billion and a total U.S. workforce of 225 thousand workers.

For comparison, let’s look at some manufacturing companies:

Company Market Cap ($Billion U.S.) U.S. Jobs (In Thousands)
GE 241 133
Boeing 75 146
Ford 61 54
Caterpillar 56 50
GM 46 77

So, we have the five largest manufacturing companies with a combined market value of $479 billion and a total U.S. workforce of 460 thousand workers. The IT companies have about three times the combined market value while providing about half the U.S. jobs. Given that most (if not all) of these workers are not unionized, what we have here is a much higher concentration of wealth in the hands of fewer investors, supplied by fewer workers with no real bargaining power.

Sounds like a good deal to me!

But is it really? Given the higher entry barriers for these jobs (college degree vs. high school diploma), difference in average age (32 vs. 56), working hours (over 50 hours/week salaried vs. 40 hours/week plus overtime), retirement options (401k vs. deferred compensation), and many other criteria, and what we have is an increasing divide between the haves and that have-nots, but also where the haves are finding themselves working harder, for fewer benefits, and at higher risk of unemployment and unemployability (e.g., age discrimination).

Thus, when IT leaders such as Mark Zuckerberg lobby congress to vastly increase the number of H1B visas to meet a so-called shortage of highly skilled technology workers, then I have to ask myself if this is the best policy for U.S workers. Investment in technology is important. But investment in technology that creates more jobs than it replaces is more important. When the five largest technology companies have three times the market capitalization with half the jobs, and those jobs place workers at higher risk and stress with fewer benefits, this seems to me to be a move in the wrong direction.

4 Comments

Filed under General Grunting

4 responses to “Job creators?

  1. Great post. Called to mind a quandary i’ve always had with Star Trek. The year is whatever, the future, computers run everything… then why on earth are their so many people on the Enterprise? What are they all doing?

  2. Pingback: Luddism, or just survival? | The Cosmogonic Grunt

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