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plehundreds
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verFoxconn
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and efficiency
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Similar
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That’s because
terparts.
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and
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and
outsourcing
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parts,—an—
estimated
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This
article
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based
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interviews
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estimated
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Timothy
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said Jennifer
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was rare me
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of Foxconn’s
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cisions
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labor is minimal compared with the exlook beyond
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What’s
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be
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of buying
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began
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Foxconn
employs nearly1983,
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Target
“The
scale
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cans
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Mr. Jobs
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M
pany’s
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cut glass arrived at Foxconn
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hundreds
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porting
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Apple
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chain
to
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foot
traffic
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workers
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355,000
355,000
dead
of night,
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demies
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Foxconn
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it
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was
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th
Target
153,000
1983,
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instance,
Mr.
Jobs
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executive.
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when
managers
what
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the
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355,000
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100 %
PERCENTAGE OF WORKERS
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595,200
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260,600
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378,000
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140,000
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338,000
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132,000
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114,000
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105,700
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288,000
“came down to two things,” said one forThis article is based on interviews
it was
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Sperry
cility’s
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mer high-ranking
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NeXT,
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ica.”
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—a
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former Apple employees and contrac287,000
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cility’s
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intons
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ely upon
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otor pro- EMPLOYERS
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Jobs
aspc
sions, all132,000
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321,000
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is unim
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terparts.
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JOBS
CREATED
IN:
JOBS
CREATED
already
and creating
Apple,
loss ofgone
a “jobabroad,
multiplier,”
A Shift
From Manufacturing
A Shift From
Manufacturing
1960
ted States Lost Out on iPhone Work
ift From Manufacturing
0
1960
1960
2010
2010
2010
2010
Privately, Apple executives say the
rld is now such a changed place that
s a mistake to measure a company’s
ntribution simply by tallying its emyees — though they note that Apple
mploys more workers in the United
ates than ever before.
They say Apple’s success has beneed the economy by empowering enpreneurs and creating jobs at compas like cellular providers and busisses shipping Apple products. And,
imately, they say curing unemployent is not their job.
“We sell iPhones in over a hundred
untries,” a current Apple executive
d. “We don’t have an obligation to
ve America’s problems. Our only obation is making the best product posle.”
Want a Glass Screen’
In 2007, a little over a month before
e iPhone was scheduled to appear in
res, Mr. Jobs beckoned a handful of
utenants into an office. For weeks, he
vid Barboza, Peter Lattman and
therine Rampell contributed reportg.
I.B.M. But with only 63,000 employees worldwide, it doesn’t come
close to appearing on a list of the nation’s biggest employers.
The shift from manufacturing means
the loss of a “job multiplier,” creating
new jobs in other industries, like
construction, transportation and
retailing. When an auto company hires
1,000 new workers, for instance, it
creates more than four times as many
additional jobs for marketers, managers,
parts manufacturers and car salesmen.
Service sector and retail jobs, on the
other hand, are not big job multipliers.
In general, while jobs for professionals
and service employees have grown, jobs
for everyone else, like office clerks and
factory workers, have shrunk. For
example, General Electric is the only
company on the list of biggest employers
in both decades. But today, its single
largest unit by revenue is GE Capital,
which sells financial services.
FOR EVERY 1,000
JOBS CREATED IN:
Retailing
240
Hospitals
670
Computer systems design services
1,190
Motor vehicle manufacturing
4,710
Steel product manufacturing
11,890
CHANGE IN JOBS, 2000-10
Service jobs, +12.0%
+10%
5
-5
Sources: S&P Capital IQ (list of largest employers); Bureau of Labor Statistics
‘I Want a Glass Screen’
In 2007, a little over a month before the
iPhone was scheduled to appear in stores, Mr.
Jobs beckoned a handful of lieutenants into an
office. For weeks, he had been carrying a prototype of the device in his pocket.
Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny
scratches marring its plastic screen, according
to someone who attended the meeting. He then
pulled his keys from his jeans.
People will carry this phone in their pocket, he said. People also carry their keys in
their pocket. “I won’t sell a product that gets
scratched,” he said tensely. The only solution
was using unscratchable glass instead. “I want a
Managers and
professionals, +7.9%
0
–10%
now such a changed place that it is a mistake
to measure a company’s contribution simply
by tallying its employees — though they note
that Apple employs more workers in the United
States than ever before.
They say Apple’s success has benefited the
economy by empowering entrepreneurs and
creating jobs at companies like cellular providers and businesses shipping Apple products.
And, ultimately, they say curing unemployment
is not their job.
“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t
have an obligation to solve America’s problems.
Our only obligation is making the best product
possible.”
ADDITIONAL
JOBS CREATED
All other jobs,
including sales,
construction,
transportation, –11.7%
THE NEW YORK TIMES
avoided using glass because it re
precision in cutting and grindin
was extremely difficult to achiev
ple had already selected an Am
company, Corning Inc., to manuf
large panes of strengthened gla
figuring out how to cut those pan
millions of iPhone screens re
finding an empty cutting plant
dreds of pieces of glass to use in
ments and an army of midleve
neers. It would cost a fortune sim
prepare.
Then a bid for the work arrive
a Chinese factory.
When an Apple team visited, t
nese plant’s owners were alread
structing a new wing. “This is i
you give us the contract,” the m
said, according to a former Apple
utive. The Chinese governmen
agreed to underwrite costs for n
ous industries, and those subsidi
trickled down to the glass-cuttin
tory. It had a warehouse fille
glass samples available to Apple,
charge. The owners made eng
available at almost no cost. The
built on-site dormitories so emp
would be available 24 hours a day
The Chinese plant got the job.
glass screen, and I want it perfect in six weeks.”
After one executive left that meeting, he
booked a flight to Shenzhen, China. If Mr. Jobs
wanted perfect, there was nowhere else to go.
For over two years, the company had been
working on a project — code-named Purple 2
— that presented the same questions at every
turn: how do you completely reimagine the cellphone? And how do you design it at the highest quality — with an unscratchable screen, for
instance — while also ensuring that millions
can be manufactured quickly and inexpensively
enough to earn a significant profit?
The answers, almost every time, were found
outside the United States. Though components
differ between versions, all iPhones contain hundreds of parts, an estimated 90 percent of which
are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan,
memory from Korea and Japan, display panels
and circuitry from Korea and Taiwan, chipsets
from Europe and rare metals from Africa and
Asia. And all of it is put together in China.
In its early days, Apple usually didn’t look
beyond its own backyard for manufacturing
solutions. A few years after Apple began building the Macintosh in 1983, for instance, Mr. Jobs
bragged that it was “a machine that is made in
America.” In 1990, while Mr. Jobs was running
NeXT, which was eventually bought by Apple,
the executive told a reporter that “I’m as proud
of the factory as I am of the computer.” As late
as 2002, top Apple executives occasionally drove
two hours northeast of their headquarters to
visit the company’s iMac plant in Elk Grove,
Calif.
But by 2004, Apple had largely turned to foreign manufacturing. Guiding that decision was
Apple’s operations expert, Timothy D. Cook,
who replaced Mr. Jobs as chief executive last
August, six weeks before Mr. Jobs’s death. Most
other American electronics companies had already gone abroad, and Apple, which at the
time was struggling, felt it had to grasp every
advantage.
In part, Asia was attractive because the
semiskilled workers there were cheaper. But
that wasn’t driving Apple. For technology companies, the cost of labor is minimal compared
with the expense of buying parts and managing
supply chains that bring together components
and services from hundreds of companies.
For Mr. Cook, the focus on Asia “came down
to two things,” said one former high-ranking
Apple executive. Factories in Asia “can scale
up and down faster” and “Asian supply chains
have surpassed what’s in the U.S.” The result is
that “we can’t compete at this point,” the executive said.
The impact of such advantages became
obvious as soon as Mr. Jobs demanded glass
screens in 2007.
For years, cellphone makers had avoided
using glass because it required precision in
cutting and grinding that was extremely difficult to achieve. Apple had already selected an
American company, Corning Inc., to manufacture large panes of strengthened glass. But figuring out how to cut those panes into millions
of iPhone screens required finding an empty
cutting plant, hundreds of pieces of glass to
use in experiments and an army of midlevel
engineers. It would cost a fortune simply to
prepare.
Then a bid for the work arrived from a Chinese factory.
When an Apple team visited, the Chinese
plant’s owners were already constructing a new
wing. “This is in case you give us the contract,”
the manager said, according to a former Apple
executive. The Chinese government had agreed
to underwrite costs for numerous industries,
and those subsidies had trickled down to the
glass-cutting factory. It had a warehouse filled
with glass samples available to Apple, free of
charge. The owners made engineers available
at almost no cost. They had built on-site dormitories so employees would be available 24 hours
a day.
The Chinese plant got the job.
“The entire supply chain is in China now,”
said another former high-ranking Apple executive. “You need a thousand rubber gaskets?
That’s the factory next door. You need a million
screws? That factory is a block away. You need
that screw made a little bit different? It will take
three hours.”
In Foxconn City
An eight-hour drive from that glass factory
is a complex, known informally as Foxconn City,
where the iPhone is assembled. To Apple executives, Foxconn City was further evidence that
China could deliver workers — and diligence —
that outpaced their American counterparts.
That’s because nothing like Foxconn City
exists in the United States.
The facility has 230,000 employees, many
working six days a week, often spending up
to 12 hours a day at the plant. Over a quarter
of Foxconn’s work force lives in company barracks and many workers earn less than $17 a
day. When one Apple executive arrived during
a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.
Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in
doorway bottlenecks. The facility’s central
kitchen cooks an average of three tons of pork
and 13 tons of rice a day. While factories are
spotless, the air inside nearby teahouses is hazy
with the smoke and stench of cigarettes.
Foxconn Technology has dozens of facilities
in Asia and Eastern Europe, and in Mexico and
Brazil, and it assembles an estimated 40 percent
of the world’s consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony.
“They could hire 3,000 people overnight,”
said Jennifer Rigoni, who was Apple’s worldwide supply demand manager until 2010, but
declined to discuss specifics of her work. “What
U.S. plant can find 3,000 people overnight and
convince them to live in dorms?”
In mid-2007, after a month of experimentation, Apple’s engineers finally perfected a meth-
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ple a futuristic playground allowed ex1980s, the Int
nd flexibility.
tive.anThat’s
when team.
managers
wokeecutives
thousands
protects
company
wrote.
plans. Thethe
bounty
has also enriched
Ap-Foxelite diagnostic
His salary
to replace workers
withtheir
ma- rights,”
at the time w
k with Apple,
workers. Last fiscal
addition
climbed to $50,000.
He and hisinto
wife had
Some —
diagnostic
of workers,
who crawled
theirchines.
uniforms
connengineering
“takes ourpleresponsibility
toyear,
ourinemployees
degree in gr
hey must go
to their salaries, Apple’s employees and
three children. They bought a home
went to Singapore. Middle managers
becoming a s
white
and
black
shirts
for
men,
red
for
women
very
seriously
and
we
work
hard
to
give
our
directors received stock worth $2 billion
with a pool.
who oversaw the plant’s inventory were
telephone rep
r the iPhone
exercised
or vested stock
op- and What rema
“It quickly
felt like, finally,
school
laid off
a few
peopleoneand
— and
lined
upwas
to paying
assemble,
bybecause,
hand,suddenly,
more
than
million
employees
a and
safe
in Kentucky,
tions worth an added $1.4 billion.
he said. “I knew the world needed
Internet connections were all that
whether the
ss in iPhones
the off,”
phones.
Within
three months,with
Apple
positive environment.”
The biggest rewards, however, have
people
who can
build things.”
were
needed.had
to leverage to
he iPhone beoftendisputed
gone to Apple’s
employees.
At themillion
same time,
however, the
elec- then,
Mr.Foxconn
Saragoza was too expensive
for
one
iPhones.
Since
The company
sometopdetails
of the
millions of job
g received sold
a
Mr. Cook, Apple’s chief, last year reindustry was changing, and Apan unskilled position. He was also insufIn the last d
er companies
has tronics
assembled
over
200
million
more.
former
Apple
executive’s
account,
and
wrote
ceived stock grants — which vest over a
ple — with products that were declining
ficiently credentialed for upper manin solar and
designs. Its
10-year
today’s
share
Foxconn,
statements,
to speak
that
shift, period
such—asthat,
theatone
described,
in
popularity in
— was
struggling todeclined
reagement.
He was called
into aa midnight
small oftor fabricatio
ave grown to
price,
would
be
worth
$427
million,
and
make
itself.
One
focus
was
improving
fice
in
2002
after
a
night
shift,
laid
off
have created
ear, and it has
his salary was raised to $1.4 million. In
manufacturing. A few years after Mr.
and then escorted from the plant. He
while many o
loying about
2010, Mr. Cook’s compensation package
Saragoza started his job, his bosses extaught high school for a while, and then
in America,
rt the emerg-
was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and
every employee has computerized timecards
that would bar them from working at any facility at a time outside of their approved shift.”
The company said that all shifts began at either
7 a.m. or 7 p.m., and that employees receive at
least 12 hours’ notice of any schedule changes.
Foxconn employees, in interviews, have
challenged those assertions.
Another critical advantage for Apple was
that China provided engineers at a scale the
United States could not match. Apple’s executives had estimated that about 8,700 industrial
engineers were needed to oversee and guide
the 200,000 assembly-line workers eventually
involved in manufacturing iPhones. The company’s analysts had forecast it would take as
long as nine months to find that many qualified
engineers in the United States.
In China, it took 15 days.
Companies like Apple “say the challenge in
setting up U.S. plants is finding a technical work
force,” said Martin Schmidt, associate provost
at the Massachusetts Institute of Technology. In
particular, companies say they need engineers
with more than high school, but not necessarily
a bachelor’s degree. Americans at that skill level are hard to find, executives contend. “They’re
good jobs, but the country doesn’t have enough
to feed the demand,” Mr. Schmidt said.
Some aspects of the iPhone are uniquely
American. The device’s software, for instance,
and its innovative marketing campaigns were
largely created in the United States. Apple recently built a $500 million data center in North
Carolina. Crucial semiconductors inside the
iPhone 4 and 4S are manufactured in an Austin,
Tex., factory by Samsung, of South Korea.
But even those facilities are not enormous
sources of jobs. Apple’s North Carolina center,
for instance, has only 100 full-time employees.
The Samsung plant has an estimated 2,400
workers.
“If you scale up from selling one million
phones to 30 million phones, you don’t really
need more programmers,” said Jean-Louis Gassée, who oversaw product development and
marketing for Apple until he left in 1990. “All
these new companies — Facebook, Google,
Twitter — benefit from this. They grow, but they
don’t really need to hire much.”
It is hard to estimate how much more it
would cost to build iPhones in the United States.
However, various academics and manufacturing analysts estimate that because labor is such
a small part of technology manufacturing, paying American wages would add up to $65 to each
iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.
But such calculations are, in many respects,
meaningless because building the iPhone in the
United States would demand much more than
hiring Americans — it would require transforming the national and global economies. Apple
executives believe there simply aren’t enough
American workers with the skills the company
needs or factories with sufficient speed and flexibility. Other companies that work with Apple,
like Corning, also say they must go abroad.
Manufacturing glass for the iPhone revived
a Corning factory in Kentucky, and today, much
of the glass in iPhones is still made there. After
the iPhone became a success, Corning received
a flood of orders from other companies hoping to
imitate Apple’s designs. Its strengthened glass
sales have grown to more than $700 million a
year, and it has hired or continued employing
about 1,000 Americans to support the emerging
market.
But as that market has expanded, the bulk
of Corning’s strengthened glass manufacturing
has occurred at plants in Japan and Taiwan.
“Our customers are in Taiwan, Korea, Japan and China,” said James B. Flaws, Corning’s
vice chairman and chief financial officer. “We
could make the glass here, and then ship it by
boat, but that takes 35 days. Or, we could ship
it by air, but that’s 10 times as expensive. So we
build our glass factories next door to assembly
factories, and those are overseas.”
Corning was founded in America 161 years
ago and its headquarters are still in upstate New
York. Theoretically, the company could manufacture all its glass domestically. But it would
“require a total overhaul in how the industry
is structured,” Mr. Flaws said. “The consumer
electronics business has become an Asian business. As an American, I worry about that, but
there’s nothing I can do to stop it. Asia has become what the U.S. was for the last 40 years.”
Middle-Class Jobs Fade
The first time Eric Saragoza stepped into
Apple’s manufacturing plant in Elk Grove, Calif., he felt as if he were entering an engineering
wonderland.
It was 1995, and the facility near Sacramento employed more than 1,500 workers. It was
a kaleidoscope of robotic arms, conveyor belts
ferrying circuit boards and, eventually, candycolored iMacs in various stages of assembly.
Mr. Saragoza, an engineer, quickly moved up
the plant’s ranks and joined an elite diagnostic
team. His salary climbed to $50,000. He and his
wife had three children. They bought a home
with a pool.
“It felt like, finally, school was paying off,”
he said. “I knew the world needed people who
can build things.”
At the same time, however, the electronics
industry was changing, and Apple — with products that were declining in popularity — was
struggling to remake itself. One focus was improving manufacturing. A few years after Mr.
Saragoza started his job, his bosses explained
how the California plant stacked up against
overseas factories: the cost, excluding the materials, of building a $1,500 computer in Elk
Grove was $22 a machine. In Singapore, it was
$6. In Taiwan, $4.85. Wages weren’t the major
reason for the disparities. Rather it was costs
like inventory and how long it took workers to
finish a task.
“We were told we would have to do 12-hour
days, and come in on Saturdays,” Mr. Saragoza
said. “I had a family. I wanted to see my kids
play soccer.”
Modernization has always caused some
kinds of jobs to change or disappear. As the
American economy transitioned from agriculture to manufacturing and then to other industries, farmers became steelworkers, and then
salesmen and middle managers. These shifts
have carried many economic benefits, and in
general, with each progression, even unskilled
workers received better wages and greater
chances at upward mobility.
But in the last two decades, something more
fundamental has changed, economists say. Midwage jobs started disappearing. Particularly
among Americans without college degrees, today’s new jobs are disproportionately in service
occupations — at restaurants or call centers, or
as hospital attendants or temporary workers —
that offer fewer opportunities for reaching the
middle class.
Even Mr. Saragoza, with his college degree,
was vulnerable to these trends. First, some of
Elk Grove’s routine tasks were sent overseas.
Mr. Saragoza didn’t mind. Then the robotics
that made Apple a futuristic playground allowed executives to replace workers with machines. Some diagnostic engineering went to
Singapore. Middle managers who oversaw the
plant’s inventory were laid off because, suddenly, a few people with Internet connections were
all that were needed.
Mr. Saragoza was too expensive for an unskilled position. He was also insufficiently credentialed for upper management. He was called
into a small office in 2002 after a night shift, laid
off and then escorted from the plant. He taught
high school for a while, and then tried a return
to technology. But Apple, which had helped
anoint the region as “Silicon Valley North,” had
by then converted much of the Elk Grove plant
into an AppleCare call center, where new employees often earn $12 an hour.
There were employment prospects in Silicon Valley, but none of them panned out. “What
they really want are 30-year-olds without children,” said Mr. Saragoza, who today is 48, and
whose family now includes five of his own.
After a few months of looking for work, he
started feeling desperate. Even teaching jobs
had dried up. So he took a position with an electronics temp agency that had been hired by Apple to check returned iPhones and iPads before
they were sent back to customers. Every day,
Mr. Saragoza would drive to the building where
he had once worked as an engineer, and for $10
an hour with no benefits, wipe thousands of
glass screens and test audio ports by plugging
in headphones.
Paydays for Apple
As Apple’s overseas operations and sales
have expanded, its top employees have thrived.
Last fiscal year, Apple’s revenue topped $108
billion, a sum larger than the combined state
budgets of Michigan, New Jersey and Massachusetts. Since 2005, when the company’s stock
split, share prices have risen from about $45 to
more than $427.
Some of that wealth has gone to sharehold-
class.
stacked
stock
share
prices
have
employed
than
1,500 the
tried a return to technology. But ramento
Apple,
security
fili
has
occurred
abroad.
Companies
have
up against more
overseas
factories:
cost,
which
had helped
anoint
the
region
assplit,Apple’s
has
occurred
abroad.
Companies
have
But
as that
market
has
expanded,
thethe
Apple’s
security
actories:
cost,
had
helped
the
as as
closed
major
facilities
inconthe
United
Apple’s
security
shefactories:
the
cost,
Apple’s
filings.
which
had
helped
anoint
region
cost, thewhich
Even
Saragoza,
with
hismajor
college
about
$45
to more
than close
$427. t
workers.
It
was
asecurity
kaleidoscope
of filings.
ro-filings.
hadwhich
helped
anoint
theanoint
region
as region
closed
facilities
in
the
United
A person
excluding
the
materials,
of
building
a Mr.
“Silicon
Valley
North,”
had
by
closed
major
facilities
in
thethen
United
bulk
of
Corning’s
strengthened
glass
A
person
close
to
Apple
argued
that
als,
of
building
a
“Silicon
Valley
North,”
had
by by
then
conStates
to
reopen
in China.
way
of exA in
person
close
to Apple
that
erials,
aValley
“Silicon
Valley
North,”
had
then
conA person
close
toElk
Apple
argued
thata argued
lding aof building
“Silicon
North,”
had
by
then
conStates
to
inplant
China.
way
ofcompensation
exthe
$1,500
computer
Grove
was
$22
verted
much
of the
Elkreopen
Grove
into
States
to
reopen
in China.
By
way
ofBy
ex-By
manufacturing
has
occurred
at
plants
in plant
thethe
compensation
received
by by
Apple’s
kas
Grove
$22$22
a a verted
much
of
the
Elk
Grove
into
planation,
executives
saysay
they
areemployees
comcompensation
received
Apple’s
Elk
Grove
was
verted
much
of the
Elk
Grove
plant
into In
the
compensation
received
by
Apple’s
$22
a was
planation,
executives
they
are
com- was fair
verted
much
of
the
Elk
Grove
plant
into
machine.
Singapore,
it
was
$6.
In
Taiplanation,
executives
say
they
are
coman
AppleCare
call
center,
where
new
Japan
and
Taiwan.
employees
was
fair,
in
part
because
the
,ore,
it
was
$6.
In
Taian
AppleCare
call
center,
where
new
peting
with
Apple
forfor
shareholders.
If If had brou
employees
wasbecause
fair,
part
the
it was $6.
Taian call
AppleCare
call center,
employees
fair, in
part
the because
. In Taipeting
with
Apple
shareholders.
an In
AppleCare
center, where
new where
company
wan,new
$4.85.was
Wages
weren’t
the inmajor
peting
with
Apple
for
shareholders.
If
employees
often
earn
$12
an
hour.
“Our
customers
areoften
inoften
Taiwan,
Korea,
company
hadhad
so so
much
value
to to they
major
employees
earn
$12
an an
hour.
cannot
rival
Apple’s
growth
and
company
brought
much
value
weren’t
major
employees
earn
$12
hour.
company
had
brought
sobrought
much
value
to
eeren’t
majorthethe
they
cannot
rival
Apple’s
growth
and and wo
employees
often
earn
$12
an
hour.
reason
for
the
disparities.
Rather
it
was
the
nation
they
cannot
rival
Apple’s
growth
and
There
were
employment
prospects
in
Japan
and China,”
said James
B. Flaws,
Rather
it was
the
nation
andand
world.
As As
the company
There
were
employment
prospects
inlike
profit
margins,
they
won’t
survive.
arities.
Rather
it was
the
nation
ries.
it was
the
nation
and
world.
theworld.
company
There
were
employment
prospects
in inventory
profit
margins,
they
won’t
survive.
has grown, it has e
costs
andAs
how
long
it tookthe company
There
were
employment
prospects
in
profit
they
won’t
Siliconmargins,
Valley,
but
none
of survive.
them
panned
Corning’s
vice
chairman
and
chief
fihas
grown,
it
has
expanded
its
domestic
d
how
long
it
took
Valley,
but
none
of them
panned
“New
middle-class
jobs
willwill
eventuhow long
it took Silicon
has
grown,
ithas
hasgrown,
expanded
itsexpanded
domestic its domestic
gand
it took
Silicon
Valley,
but
none
of them
panned
“New
middle-class
jobs
eventuwork
force, inclu
workers
to finish
a
task. it has
Silicon
but“We
none
of
them
panned
“New
middle-class
jobs
eventuout.
“What
they
really
wantwill
are 30-yearnancialValley,
officer.
could
make
the
work
force,
including
manufacturing
k.
out.
“What
they
really
want
areare
30-yearallyally
emerge,”
said
Lawrence
Katz,
aLast
work
force,
including
manufacturing
ask.
work
force,
including
manufacturing
out.
“What
they
really
want
30-yearemerge,”
said
Lawrence
Katz,
a year, Ap
jobs.
“We
were
told
we
would
have
to
do
out.
“What
they
really
want
are
30-yearally
emerge,”
said
Lawrence
Katz,
a
olds
without
children,”
said
Mr.
Saragoglass
andwithout
then ship
it by boat,
but
jobs.
Last
year,
Apple’s
American
work
would
to to
dohere,
children,”
said
Mr.Mr.
SaragoHarvard
economist.
“But
willwill
someone
jobs.
Last
year,
American
worktoday
would
have
do olds
jobs.
Lastdays,
year,
Apple’s
American
work
e to
dohave
olds
without
children,”
said
SaragoHarvard
economist.
“But
someone
force grew by 8,000
12-hour
and
come
inApple’s
on Saturolds
without
children,”
said
Mr. SaragoHarvard
economist.
“But
will someone
za,
who
is
48,
and
whose
family
that
takes
35
days.
Or,
we
could
ship
it
force
grew
by
8,000
people.
me
in in
on on
Saturza,za,
who
today
iswhose
48,
and
whose
family
his
40s40s
have
the
skills
for
them?
Or Orother com
force
by “I
8,000
come
force
grew
8,000grew
people.
Saturtoday
is 48,
and
whose
family
infive
his
have
skills
them?
days,”
Mr. by
Saragoza
said.
hadpeople.
a famWhile
za, Saturwhobut
today
iswho
48,
and
family
in
hisincludes
40s in
have
the
skills
forthe
them?
Orfor
now
of his
own.
that’s
10
times
asofexpensive.
“I had
abyfamWhile
other
companies
have
sent
callcall willwill
now
includes
fivefive
his
own.
he he
be be
bypassed
for
a new
graduate
“I had
aair,
famWhile
other
companies
sent
daaid.
asaid.
famWhile
other
companies
have
sent
callhave
now
includes
of
his
own.
bypassed
for
a
new
graduate
centers
abroad, Ap
ily.
I
wanted
to
see
my
kids
play
soccer.”
now
includes
five
of
his
own.
will
he
be
bypassed
for
a
new
graduate
After
a
few
months
of
looking
for
So
we buildAfter
our aglass
factories of
next
centers
abroad,
Apple
hascenkept
its its
cenkids
play
soccer.”
and
never
findfind
hishis
way
back
into
the
few
looking
forforabroad,
centers
abroad,
Apple
has
kept
cenmy
kids
play
soccer.”
centers
Apple
has
kept
its
soccer.”
and
never
way
into
a few
months
of
looking
ters
inthe
the United S
and
never
find
his
way
back
into
theback
Modernization
has
always
caused
After
aassembly
few After
months
ofmonths
looking
for
work,
he
started
feeling
desperate.
door
to
factories,
and
those
in the
United
States.
One
source
es-es- middle
always
class?”
started
feeling
ters
in
the
United
States.
One
source
has
alwayscaused
caused
ters
inkinds
theters
United
States.
One
source
esmiddle
caused
work,he he
started
feelingdesperate.
desperate.
timated that sales
middle
class?”
some
of
jobs
to change
or disapwork,
he work,
started
feeling
desperate.
Even teaching
jobs class?”
had dried up. So he
are overseas.”
timated
sales
ofproducts
Apple’s
products
or or
disapThe
pace
of of
innovation,
saysay
execuEven
teaching
jobs
had
dried
up.up.
So So
heAs
timated
sales
of
Apple’s
products
todisapchange
disaptimated
that
salesthat
ofthat
Apple’s
rchange
The
pace
innovation,
execuEven
teaching
jobs
had
dried
he
have
caused othe
pear.
the
American
economy
transiThe
pace
of
innovation,
say
execuEven
teaching
jobs
had
dried
up.
So
he
took
a
position
with
an
electronics
temp
Corning
was
founded
in
America
161
have
caused
other
companies
to
hire
ncan
economy
transitives
from
aofvariety
of of
industries,
hasof
took
awith
position
with
an an
electronics
temp
have
other
to hire
economy
transihave
caused
othercaused
companies
tocompanies
hire
transitives
from
a
variety
industries,
has
took
a
position
with
electronics
temp
tens
thousands
tioned
from
agriculture
to
manufacturtives
from
a
variety
industries,
has
took
a
position
an
electronics
temp
agency
that
had
been
hired
by
Apple
to
years agoagency
and its that
headquarters
are still
tens of thousands
of Americans.
FedEx
re
to manufacturbeen
quickened
by by
businessmen
like
hadhad
been
hired
by by
Apple
to
ofofthousands
ofFedEx
Americans.
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ture
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of to
thousands
Americans.
ufacturbeen
quickened
businessmen
like Parcel
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ing
and
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long
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asay
check
returned
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and
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and
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her
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Service,
forand
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s, farmMr.
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Mr.
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SEMICONDUCTORS
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company
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say
they
have
created
American
rkers,
then
decade
between
major
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re-because
fore
they
were
sent
back
to customers.
both
say
they
have
created
American
workers,
then
both
say both
they
have
created
American
decade
between
major
automobile
red thenandand
fore
they
were
sent
back
to
customers.
jobs
of th
salesmen
and
middle
managers.
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decade
between
major
automobile
refore
they
were
sent
back
to
customers.
Every
day,
Mr.
Saragoza
would
drive
to
domestically.
Butday,
it would
“require would
a to- drive to
jobsofbecause
of of
theof
volume
of of
Apple’s
managers.
These
designs.
by by
comparison,
re-re- though
Mr.Mr.
Saragoza
because
the
volume
Apple’s
dle
managers.
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jobs
because
the
volume
Apple’s
designs.
Apple,
comparison,
has
. These
shipments,
Every
day,
Saragoza
would
drive
to
designs.
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by Apple,
comparison,
has re- has
shifts
have jobs
carried
many
economic
Every
day,Every
Mr.
Saragoza
would
drive to
the
building
where
he
had
once
worked
tal overhaul
in
how
the
industry
is
shipments,
though
neither
would
promany
economic
fivefive
in four
years,
douthewhere
building
where
he worked
hadhad
once
worked
shipments,
though
neither
d many economic
shipments,
though
neither
would
proleased
iPhones
indoufour
years,
douonomic
vide
specific figure
the
building
where
he
once
worked and
leased
fiveleased
iPhones
iniPhones
four
years,
benefits,
in general,
with
each
pro- would
the
building
he had
once
as anproengineer,
and
for
$10
an
hour
with
structured,”
Mr.engineer,
Flaws
said.
“The
convide
specific
figures
without
permission
al,
each
probling
thethe
devices’
speed
andand
memory
as an
and
for
$10
an an
hour
with
vide
specific
figures
without
permission
neral,
with
each
provide
specific
figures
without
permission
bling
devices’
speed
memory
ch with
profrom
Apple,
whic
as
an
engineer,
and
for
$10
hour
with
bling
the
devices’
speed
and
memory
gression,
even
unskilled
workers
reas
an
engineer,
and
for
$10
an
hour
with
no
benefits,
wipe
thousands
of
glass
sumer
electronics
business
has
become
jobs
in
the
U.S.
jobs
in
South
Korea
jobs
in
Taiwan,
Singapore,
Malaysia,
from
Apple,
which
the
company
delled
workers
rewhile
dropping
the
price
that
some
conbenefits,
wipe
thousands
of from
glass
from
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skilled
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Apple,
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dropping
the
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coners re- workers
clined
to provide.
benefits,
wipe
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price that
some
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better
wages
and
no
benefits,
wipe
thousands
of
glass
screens
test
ports
by
plugand
other
Asian
countries
Japan,
Europe
and
elsewhere
an
Asian
business.
As
an
American,
I
clined
to provide.
es
andandgreater
sumers
pay.
screens
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test
audio
ports
byclined
plugclined
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ages
greaterand
to at
provide.
sumers
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greater
sumers
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screens
test
audio
ports
by
plugchances
upward
mobility.
“We shouldn’t b
screens
test
audio
ports
by plugging
in headphones.
worry about
that,
but there’s
nothing
I
bility.
“We
shouldn’t
be be
criticized
forfor
using
Mr.
Obama
andand
Mr.Mr.
Jobs
said
ging
in headphones.
mobility.
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shouldn’t
criticized
using Mr.Before
“We
shouldn’t
be
criticized
for
using
Before
Mr.
Obama
Jobs
saidworkers,”
ging
in
headphones.
Chinese
Before
Obama
and
Mr.
Jobs
said
But
in
the
last
two
decades,
someging
in
headphones.
can
do to stop it. Asia has becomeDreamed
what up in California
Chinese
workers,”
a
current
Apple
execotwo
decades,
somegoodbye,
Apple
executive
ansaid.
An industry
outsourced
industry
lost
Chinese
workers,”
a current
execdecades,
someChinese
workers,”
a current
Apple
exec-AnApple
goodbye,
the
Apple
executive
pulled
an “The U
someutive
goodbye,
the
Apple the
executive
pulled
an pulled
thing more
fundamental
has
changed,
the
U.S.
was
for
the
last
40
years.”
Paydays
for
Apple
utive
said.
“The
U.S.
hashas
stopped
protal hashas
changed,
iPhone
from
his
pocket
to semiconductor
show
off off
a people
utive
said.
“The
U.S.
stopped
pro-from
mental
changed, Paydays for Apple Apple once
iPhone
from
his
pocket
to
show
awas with
utive
said.
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U.S.
has
stopped
prohanged,
iPhone
his
pocket
to
show
off
a
ducing
economists
say.
Midwage
jobs
started
boasted
that
The
America
was
once
a
leader
Paydays for Apple
Paydays
ducing
people
with
theneed.”
skills
wewe
need.”
wage
jobs
started
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application
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agame
driving
game
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ducing
people
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need.”
idwage
jobs
started for Apple
application
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ducing
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application
—
a driving
—invented
Asand
Apple’s
operations
and
disappearing.
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among
What’s
its products
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essentially
in the United
in television
othernew
Middle-Class
Jobs
Fade
Asoverseas
Apple’s
overseas
operations
andand more,
cularly
What’s
more,
Apple
sources
say
theincredibly
incredibly
detailed
graphics.
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As
Apple’s
overseas
operations
articularly
among
What’s
more,
Apple
sources
say
the
with
incredibly
detailed
graphics.
As
Apple’s
operations
and
among among
What’s
Apple
sources
say
the
with
detailed
graphics.
The
Americans
college
degrees,
tosales
havewith
expanded,
its top
employees
manufactured
in the without
States.
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foreign
nations
display
manufacturing.
llege
degrees,
to- to- sales
company
hashas
created
ofdevice
good
have
expanded,
its its
toptop
employees
device
reflected
thethe
soft
glow
of
thethe jobs ins
college
degrees,
company
created
plenty
of
good
sales
have
expanded,
employees
device
reflected
glow
of
ees,
tocompany
has
created
plenty
of plenty
good
sales
its
top employees
reflected
thefiscal
soft year,
glow
ofsoft
the
day’sNonew
jobs
are disproportionately
in virtually
American
have
thrived.
Last
Apple’s
Thehave
firstexpanded,
time
Eric
Saragoza
stepped
United
States.
longer.
discovered
that
semiconductor
Today,
no
displays
proportionately
in
American
jobs
inside
its
retail
stores
have
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fiscal
year,
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room’s
lights.
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other
executives,
disproportionately
in
American
jobs
inside
its
have
Last
fiscal
Apple’s
room’s
ately in
jobs
inside
its
retail
stores
have
thrived.
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fiscal year,
room’s
lights.
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other executives,
service
occupations
— at
restaurants
orretail
and
among ent
revenue
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$108 lights.
billion,
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sumother
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Specifics
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at
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andandentrepreneurs
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selling
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$108
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largwhose
combined
worth
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— restaurants
ator
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topped
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worth
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rants
and
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selling
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callbut
centers,
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iPhone
and
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er selling
than
the
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state
budgets
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Calif.,revenue
he$108
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technology
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States.
mostly
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pital
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er
than
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state
budgets
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billion,
jostled
for
position
to
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ospitalorattendants
orthe
iPhone
and
iPadoffer
applications.
er than the
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state
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billion,
jostled
position
to was
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dants
iPhone
and iPad
applications.
er
thanan
combined
state
budgets
of budgets
billion,
jostled
for
position
to glance
temporary
workers
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tering
engineering
wonderland.
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New
Jersey
and for
MassachuAfter
two months
estimated
90
percent
of
1960s,
assembly
outsourced
from
Asia,
especially
South
—r —
that
offer
fewer
over
his The
shoulder.
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game, everyone
Michigan,
New
Jersey
andand
MassachuAfter
two
months
of testing
Mr.his
that
offer
over
shoulder.
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everyone
Michigan,
New
Jersey
After
two
months
of
testing
iPads,
Mr.
fewer
over
shoulder.
game,
everyone
Michigan,
New
Jersey
and
MassachuAfter two
months
of
testing
iPads,
Mr.iPads,
opportunities
for
reaching
the
middle
setts.
Since
2005, his
when
the company’s
Saragoza
Itfewer
was 1995,
and
the facility
neariPhone
Sac- Massachucomponents
are
to
Asia.game,
Higher-skilled
jobsquit.
soonThe
Korea
and
Japan,
where
ching
thethe
middle
agreed,
was
wonderful.
setts.
Since
2005,
when
thethe
company’s
Saragoza
quit.
TheThe
pay
was
so so
low
that
eaching
middle
agreed,
was
wonderful.
setts.
Since
2005,
when
company’s
Saragoza
quit.
pay
was
low
that
middle
agreed,
was
wonderful.
setts.
Since
2005,
when
the
company’s
Saragoza
quit.
The
pay
was
so
low
that
class.
stock
split,
share
prices
have
risen
from
he was
ramento
employed
more
than
1,500
manufactured
overseas,
Although
thebetter
latest off,
wages
are not muchThere wasn’t even followed.
stock
split,
share
prices
have
risen
from
he
was
better
off,
he
figured,
spending
a
tiny
scratch
on
stock
sharerisen
prices
have risen
frombetter
was
hecollege
figured, spending
There
even
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on
stock
split,Itshare
have
from
hein
was
off,
hebetter
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spending
There
even
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tiny scratch
Even
Mr. he
Saragoza,
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asplit,
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by roworkers
Germany,
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made applyi
in
cheaper
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college
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other
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about
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to more
than
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screen.
za,
with
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those
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about
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to
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screen.
college
applying
for
other
jobs.
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about
$45 to
more
than
$427.
the
screen.
Singapore, Korea, Taiwan,
Texas, most of its other chips are
manufacturing has outpaced
The iPhone: Designed in the U.S. …
43,000
China and elsewhere.
… Made Overseas …
5,000 – 10,000
7,000 – 20,000
American capabilities.
made abroad.
The
iPhone:
Designed…in the U.S. …
… Made Overseas
… in China
……
Made
……
Assembled
MadeOverseas
Overseas
Assembled
inandChina
Paul Semenza, senior vice president, Analyst Services, DisplaySearch,
Group
Company;
Linleyin
Gwennap,
founder
principal analyst, the Linley
… Made
Overseas
… Sources:…
…an NPD
Assembled
China
SEMICONDUCTORS
SEMICONDUCTORS
(CHIPS)
SEMICONDUCTORS
(CHIPS) (CHIPS)
DISPLAYS
BATTERIES
BATTERIES BATTERIES
SEMICONDUCTORS (CHIPS)
ASSEMBLY
ASSEMBLY ASSEMBLY
BATTERIES
43,000
–1,000
10,000
20,000
000
– –20,000
– –1,000
200,000
,0007,0007,000
20,000 5,000
300
1,000 7,000 –200,000
200,000 300 – 1,00
–7,000
20,000
300 –300
jobs in the U.S.
jobsjobs
in Taiwan,
Singapore,
Malaysia,
rea
in Taiwan,
Singapore,
Malaysia,
jobs in Taiwan,
Singapore,
Malaysia,
es
Japan,
andand
elsewhere
ntries
Japan,
Europe
elsewhere
Japan, Europe
andEurope
elsewhere
jobs in South Korea
jobs
in China
jobs
in China
China
and jobs
otherinAsian
countries
Dreamed up in California
An industry lost
Anoutsourced
industry
outsourced
Noup
catching
up up
st
An
industry
outsourced
No
catching
An
industry
No
catching
Apple once boasted that
America
was once
a leader
The
semiconductor
was
Sony
helped
develop
thethe
aader
leader
The
semiconductor
was
Sony
helped
develop
The semiconductor
was
Sonyinhelped
develop
the
its products were
television
and other
essentially
in the
United
er
lithium-ion
battery
in the
other
essentially
invented
in the
United
lithium-ion
battery
in the
essentially
invented
ininvented
thethe
United
lithium-ion
battery
in the
manufactured
in
display manufacturing.
States.
Then
foreign
nations
g.
early
1980s
for for
useuse
in its
uring.
States.
Then
foreign
nations
early
in its
States.
Then
foreign
early
1980s
for
use
in
its
United
States.
No nations
longer.
Today,
virtually
no1980s
displays
discovered
thatthat
semiconductor
lays
consumer
electronics
displays
discovered
semiconductor
discovered
that
semiconductor
consumer
Specifics
differ
between
are madeelectronics
in consumer
the Unitedelectronics
manufacturing
could
jump-start
ed
devices,
including
thethe
United
manufacturing
could
jump-start
devices,
including
manufacturing
could
devices,
including
the
versions,
butjump-start
an
States. They
mostly
come
technology
industries.
In the
ome
Walkman.
Japan
came
to to
y come
technology
industries.
In the
Walkman.
came
technology
industries.
In the
Walkman.
came
toJapan
estimated
90 percent
of
from Asia,Japan
especially
South
1960s,
assembly
waswas
outsourced
dominate
thethe
manufacturing
youth
South 1960s,iPhone
1960s,
assembly
outsourced
dominate
manufacturing
assembly
was
outsourced
dominate
the
manufacturing
components are
Korea and Japan, where
to Asia.
Higher-skilled
soon
ere
of these
batteries.
Energizer
where to Asia.
to Asia.
Higher-skilled
soon of these
of these
batteries.
Energizer
Higher-skilled
jobs soon jobsjobs
batteries.
Energizer
manufactured
overseas,
wages
are
not
much
followed.
Although
the
latest
h
built
a battery
factory
in
much
followed.
Although
the
latest
built
a
battery
followed.
Although
the
latest
built
a
battery
factory
in
by workers in Germany,
cheaper but technical factory in
iPhone
processor
is
made
in
al
Florida
in
the
1990s,
but
rawraw
nical
iPhone
processor
Florida
the
1990s, but
iPhone
processor
is made
in is made in
Florida
in the 1990s,
but
raw
Singapore,
Korea,
Taiwan,
manufacturing
hasin
outpaced
most
of
its
other
chips
areare material costs
aced Texas, mostTexas,
material
costs
andand
labor
rates
utpaced
Texas,
most
of
its
other
chips
material
costs
labor
rates
of
its
other
chips
are
and
labor
rates
China and elsewhere.
American capabilities.
made
abroad.
s.
made
unable
to compete.
ities.
made
abroad.
made
it unable
to compete.
made abroad.
made it unable
toitcompete.
jobs in Taiwan, Singapore, Malaysia,
jobsjobs
in China
in China
jobselsewhere
in China
Japan, Europe and
jobs in China
An industry outsourced
No catching up
It’s
notnot
just
cheap
labor
It’s
just
cheap
labor
It’s
not
just
cheap
labor
The semiconductor was
Sony helped develop
The
iPhone
is assembled
by by
iPhone
is assembled
in China
The iPhone
is The
assembled
in
China byin China
essentially
invented
in the
United
lithium-ion battery in
Foxconn,
the
largest
electronics
assembler
Foxconn,
the largest
electronics assembler
Foxconn,
the largest
electronics
assembler
States. Then
foreign
nations
early 1980s for use
in U.S.
the
world.
U.S.U.S.
executives
they
in the
world.
they
in the world.
executives
sayexecutives
they saysay
discovered
that semiconductor
consumer electron
cannot
function
without
companies
likelike
cannot
function
without
cannot function
without
companies
likecompanies
manufacturing
could
jump-start
devices, including
Foxconn.
TheThe
Taiwanese
company
1.21.2
Foxconn.
company
Foxconn.
The
Taiwanese
has
1.2 hashas
technology
industries.
In company
theTaiwanese
Walkman.
Japan cam
million
workers,
many
willing
to live
in in
million
workers,
willing
todominate
live
million
workers,
many
willing
tomany
live
in
1960s,
assembly
was
outsourced
the manufa
company
dorms
and
spend
hours
in ain a
company
dorms
spend
hours
dorms
andjobs
spend
12and
hours
in12
a 12
to company
Asia. Higher-skilled
soon
of these
batteries. En
factory,
six days
a week.
Chinese
workers
factory,
days
a week.
Chinese
workers
factory, six
days
a week.
Chinese
workers
followed.
Although
thesix
latest
built a battery facto
are
cheaper
than
their
American
cheaper
than their American
areprocessor
cheaper than
theirinAmerican
iPhone
isare
made
Florida in the 1990s, b
counterparts
—
but
just as important,
they
counterparts
important,
theycosts and labo
counterparts
—
but just
as —
important,
they
Texas,
most of its
other
chips
arebut just as
material
are
more
flexible
and
plentiful,
and
are
more
flexible
plentiful,
and
are made
more flexible
and
plentiful,
and
abroad.
made it unable to com
can
be be
hired
overnight.
can
hired
overnight.
thousands thousands
canthousands
be hired
overnight.
Sources: Paul Semenza, senior vice president, Analyst Services, DisplaySearch, an NPD Group Company; Linley Gwennap, founder and principal analyst, the Linley Group; Ron Turi, owner, Element 3 Battery Ven
up
Company;
Linley
Gwennap,
founder
and and
principal
analyst, the Linley
Group;
RonRon
Turi,Turi,
owner,
Element 3 Battery
Venture;
Wayne
Lam,Lam,
IHS IHS
iSuppli
THE NEW YORK TIMES
Group
Company;
Linley
Gwennap,
founder
principal
the Linley
Group;
Battery
Venture;
Wayne
iSuppli
THE NEW YORK TIMES
inley Gwennap,
founder
and principal
analyst,
the
Linley analyst,
Group; Ron
Turi, owner,
Element
3 owner,
BatteryElement
Venture;3Wayne
Lam,
IHS iSuppli
THE NEW YORK TIMES
ers. Apple is among the most widely held stocks,
and the rising share price has benefited millions of individual investors, 401(k)’s and pension plans. The bounty has also enriched Apple
workers. Last fiscal year, in addition to their salaries, Apple’s employees and directors received
stock worth $2 billion and exercised or vested
stock and options worth an added $1.4 billion.
The biggest rewards, however, have often
gone to Apple’s top employees. Mr. Cook, Apple’s chief, last year received stock grants —
which vest over a 10-year period — that, at today’s share price, would be worth $427 million,
and his salary was raised to $1.4 million. In 2010,
Mr. Cook’s compensation package was valued
at $59 million, according to Apple’s security filings.
A person close to Apple argued that the
compensation received by Apple’s employees was fair, in part because the company had
brought so much value to the nation and world.
As the company has grown, it has expanded its
domestic work force, including manufacturing
jobs. Last year, Apple’s American work force
grew by 8,000 people.
While other companies have sent call centers abroad, Apple has kept its centers in the
United States. One source estimated that sales
of Apple’s products have caused other companies to hire tens of thousands of Americans.
FedEx and United Parcel Service, for instance,
both say they have created American jobs because of the volume of Apple’s shipments,
though neither would provide specific figures
without permission from Apple, which the company declined to provide.
“We shouldn’t be criticized for using Chinese workers,” a current Apple executive said.
“The U.S. has stopped producing people with
the skills we need.”
What’s more, Apple sources say the company has created plenty of good American jobs inside its retail stores and among entrepreneurs
selling iPhone and iPad applications.
After two months of testing iPads, Mr. Saragoza quit. The pay was so low that he was better off, he figured, spending those hours applying for other jobs. On a recent October evening,
while Mr. Saragoza sat at his MacBook and submitted another round of résumés online, halfway around the world a woman arrived at her
office. The worker, Lina Lin, is a project man-
ager in Shenzhen, China, at PCH International,
which contracts with Apple and other electronics companies to coordinate production of accessories, like the cases that protect the iPad’s
glass screens. She is not an Apple employee.
But Mrs. Lin is integral to Apple’s ability to deliver its products.
Mrs. Lin earns a bit less than what Mr.
Saragoza was paid by Apple. She speaks fluent
English, learned from watching television and
in a Chinese university. She and her husband
put a quarter of their salaries in the bank every
month. They live in a 1,080-square-foot apartment, which they share with their in-laws and
son.
“There are lots of jobs,” Mrs. Lin said. “Especially in Shenzhen.”
Innovation’s Losers
Toward the end of Mr. Obama’s dinner last
year with Mr. Jobs and other Silicon Valley executives, as everyone stood to leave, a crowd
of photo seekers formed around the president.
A slightly smaller scrum gathered around Mr.
Jobs. Rumors had spread that his illness had
worsened, and some hoped for a photograph
with him, perhaps for the last time.
Eventually, the orbits of the men overlapped. “I’m not worried about the country’s
long-term future,” Mr. Jobs told Mr. Obama,
according to one observer. “This country is insanely great. What I’m worried about is that we
don’t talk enough about solutions.”
At dinner, for instance, the executives had
suggested that the government should reform
visa programs to help companies hire foreign
engineers. Some had urged the president to
give companies a “tax holiday” so they could
bring back overseas profits which, they argued, would be used to create work. Mr. Jobs
even suggested it might be possible, someday,
to locate some of Apple’s skilled manufacturing
in the United States if the government helped
train more American engineers.
Economists debate the usefulness of those
and other efforts, and note that a struggling
economy is sometimes transformed by unexpected developments. The last time analysts
wrung their hands about prolonged American
unemployment, for instance, in the early 1980s,
the Internet hardly existed. Few at the time
would have guessed that a degree in graphic
design was rapidly becoming a smart bet, while
studying telephone repair a dead end.
What remains unknown, however, is whether the United States will be able to leverage tomorrow’s innovations into millions of jobs.
In the last decade, technological leaps in solar and wind energy, semiconductor fabrication
and display technologies have created thousands of jobs. But while many of those industries
started in America, much of the employment has
occurred abroad. Companies have closed major
facilities in the United States to reopen in China.
By way of explanation, executives say they are
competing with Apple for shareholders. If they
cannot rival Apple’s growth and profit margins,
they won’t survive.
“New middle-class jobs will eventually
emerge,” said Lawrence Katz, a Harvard economist. “But will someone in his 40s have the
David Barboza, Peter Lattman and Catherine
Rampell contributed reporting.
skills for them? Or will he be bypassed for a new
graduate and never find his way back into the
middle class?”
The pace of innovation, say executives from
a variety of industries, has been quickened by
businessmen like Mr. Jobs. G.M. went as long
as half a decade between major automobile redesigns. Apple, by comparison, has released
five iPhones in four years, doubling the devices’
speed and memory while dropping the price
that some consumers pay.
Before Mr. Obama and Mr. Jobs said goodbye, the Apple executive pulled an iPhone
from his pocket to show off a new application
— a driving game — with incredibly detailed
graphics. The device reflected the soft glow of
the room’s lights. The other executives, whose
combined worth exceeded $69 billion, jostled for
position to glance over his shoulder. The game,
everyone agreed, was wonderful.
There wasn’t even a tiny scratch on the
n
screen.