The Tech Boom Has Done Little to Alleviate Underemployment in the US – Part One

The Wall Street Journal recently featured this highly revealing article about the phenomenal growth in technology industries in America today and how few jobs comparatively it has created. Those at the top directing it have become billionaires, acquiring wealth beyond imagination, while the average American worker has been left underemployed. How soon will Americans wake up to the fact that the new technology is inevitably leading us into a historically unprecedented situation of “world without work.” It is going to require a total reevaluation of our values, the invention of a new paradigm, to prevent this from becoming a disaster. And the sooner we get started the better.

Because of its length we are presenting this article in three parts. Below is part one; it will be concluded in future blogs:

images-17

By JON HILSENRATH and BOB DAVIS, Oct 13, 2016

The technology revolution has delivered Google searches, Facebook friends, iPhone apps, Twitter rants and shopping for almost anything on Amazon, all in the past decade and a half.

What it hasn’t delivered are many jobs. Google’s Alphabet Inc. and Facebook Inc. had at the end of last year a total of 74,505 employees, about one-third fewer than Microsoft Corp. even though their combined stock-market value is twice as big. Photo-sharing service Instagram had 13 employees when it was acquired for $1 billion by Facebook in 2012.

Hiring in the computer and chip sectors dove after companies shifted hardware production outside the U.S., and the newest tech giants needed relatively few workers. The number of technology startups fizzled. Growth in productivity and wages slowed, and income inequality rose as machines replaced routine, low- and middle-income, human-powered work. . .

The bursting of the dot-com bubble in early 2000, the recession in 2001 and deepening globalization proved to be turning points for the tech economy and its broader impact on American prosperity.

U.S. tech companies accelerated the reshuffling of their supply networks to China and elsewhere in Asia, places filled with growth potential and cheap labor. Hardware makers concentrated production overseas to supply U.S. and foreign computer makers.

After rising through the 1990s, total employment at computer and electronic firms in the U.S. sank to 1.03 million in August 2016 from 1.87 million in 2001, according to Labor Department statistics. Employment at semiconductor makers fell by half to 359,000 in the same period.

In the 1990s, Micron Technology Inc. was a successful example of how far the tech industry reached beyond its nexus in Silicon Valley. Based in Boise, Idaho, Micron was founded by Idaho farmers and businessmen, including the late billionaire J.R. Simplot, who supplied McDonald’s Corp. with most of its frozen french fries and had “MR SPUD” license plates on his pickup truck.

Micron’s workforce quadrupled to 18,800 between 1994 and 2000, with the growth overwhelmingly in the U.S. The company fought with Japan in the 1980s to restrict imported memory chips and protect its U.S. base.

These days, Micron is a case study in how technology companies have exported jobs to other countries. As of 2013, the most recently disclosed data, Micron had 11,300 workers in the U.S., down from 14,000 in 2000. The company’s non-U.S. workforce surged to 19,600, mainly in China and other Asian nations, from 4,800.

Securities filings show that the percentage of employees at Micron who were in the U.S. shrank to 37% from 74% in the same period. The company stopped disclosing the annual percentage in 2014. A Micron spokesman says much of the growth outside the U.S. came from acquisitions.

“What we’re doing is replacing more resources there to support the growing customer base—both the multinationals that are leveraging the low labor-cost areas in China, in particular, as well as the indigenous Chinese manufacturers,” Mike Sadler, Micron’s head of sales, told analysts in 2004. He is now Micron’s strategic chief.

The Semiconductor Industry Association says semiconductors remain a big U.S. business and are America’s third-largest export, trailing cars and aircraft.

End of Part One

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s