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

This article from the Wall Street Journal about the tech industry’s failure to create jobs in this country continues from the previous blog:

bn-qe071_1007te_m_20161007172820Apple made early iMac computers in California

By JON HILSENRATH and BOB DAVIS, Oct 13, 2016

Apple Inc. followed a similar path. Co-founder Steve Jobs made it a mission early in his Apple career and after creating NeXT Inc., another computer maker, to revitalize U.S. manufacturing. Macintosh computers rolled off the line at an Apple factory “like a Holiday Inn toaster turns out toasted Bagels,” Brent Schlender, who co-wrote a biography of Mr. Jobs.

bn-qe070_1007te_m_20161007172820-1                  In 2004 Apple shifted most of its production to outside the U.S.

By the time Mr. Jobs died in 2011, Apple made nearly every one of its products outside America, largely in Asia. Apple halted U.S. manufacturing in 2004 and didn’t resume until 2013, when it began producing Mac Pro personal computers in Austin, Texas.

Apple says it employs about 80,000 workers in the U.S., or two-thirds of the company’s overall workforce. About half the U.S. employees have retail jobs.

An Apple spokeswoman says it is “creating jobs in new industries like the App Economy,” or apps developed for the iPhone, and is “a major contributor to U.S. manufacturing” by buying American-made components and materials.

Mr. Schlender, the Jobs biographer, says it made sense to assemble the iPod outside the U.S. when production began in 2001. “The components were hard to make, and putting them together was a labor-intensive job because everything was so small,” he says. “You had to piece it together by hand.” (American hands aren’t small enough?)

The computer-hardware exodus spread. International Business Machines Corp. , the company that turned computers into a big business, was born in Endicott, N.Y., and built its first factories there.

From 2001 to 2015, though, employment in computer and electronics manufacturing in surrounding Broome County fell about two-thirds to 3,055 jobs. Warehouses and transportation companies scooped up some laid-off workers at salaries of less than half those paid in high-tech manufacturing, says Christian Harris, an analyst for the New York State Department of Labor.

American tech workers are getting a smaller piece of the economic pie created from what they produce. As of 2014, employee compensation in computer and electronic-parts making was equal to 49% of the value of the industry’s output, down from 79% in 1999, according to the Commerce Department.

While other tech jobs have been created in sectors such as software publishing, that growth is smaller than the losses in tech manufacturing.

Since 2002, the number of technology startups has slowed, hurting job creation. In a 2014 study, economists Javier Miranda, John Haltiwanger and Ian Hathaway said the growth of tech startups accelerated to 113,000 in 2001 from 64,000 in 1992.

That number slumped to 79,000 in 2011 and hasn’t recovered, according to the economists’ calculations using updated data. The causes include global competition and increased domestic regulation, says Mr. Haltiwanger, an economics professor at the University of Maryland. . .

This article is concluded in a subsequent blog

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