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Last updated on April 24, 2014 at 16:36 EDT

Apple Report: Creating Jobs Through Innovation

March 7, 2012

Apple Inc., on its website Friday, posted claims that it is responsible for creating more than half a million jobs in the United States through the sale of its iPad and other devices.

Apple announced on its site that 514,000 jobs had been “created or supported” by the Cupertino, California-based tech giant. The announcement comes as Apple faces strict criticism for staffing overseas factories with foreign workers.

The iPhone maker says American workers make up nearly 66 percent of its worldwide employee base. Apple said of that percentage, 304,000 jobs go to the engineering, manufacturing and transportation of its products. The remaining 210,000 jobs have been created in the “App Economy” since the introduction of its iPhone in 2007.

Apple also claims a percentage of those figures come from their 246 US retail outlets that staff over 100 people each, and another 7,700 call center advisors that are right here in the US as well.

“The vast majority of our customer support calls are handled by US employees,” Apple said on its website. “Relocating our call centers overseas to places like India would reduce our costs by 50 percent or more. But we keep these jobs in the US because it helps us deliver a better customer experience.”

This is the first time Apple has released an estimate of the number of jobs it has created, and while the reasons might be easily interpreted, the tech giant is remaining tight-lipped on why it had done so.

However, this isn´t the first time a large tech company has released figures on its employee base; it is a fairly common practice in the tech industry. Google has made similar announcements, estimating the economic activity it helps create.

But claims of this kind are often seen as unreliable — and for Apple´s part, the estimate comes at a time when the company is under fire for overseas labor practices. Also, most tech companies employ relatively few people compared to other American business firms, such as General Motors and GE had in their heyday.

Some estimates are in sharp contrast to Apple´s 66 percent US-employee base. The world´s most valuable company can be attributed to approximately 700,000 overseas jobs through a network of suppliers that make its iPhones, iPads and other products. That figure could undermine Apple´s estimates and give economists a source of debate for years to come.

David Autor, an economics professor at MIT, told the New York Times in an email that the “entire business of claiming ℠direct and indirect´ job creation is disreputable” because most of the workers Apple is taking credit for would have been employed elsewhere in the company´s absence.

“But of course, they might not have been as well paid or gratified with their work,” he said. “We´ll never know.”

Part of Apple´s estimates, about 257,000 jobs created at other companies, is based on a study conducted by consulting firm Analysis Group.

The study quantified Apple´s job creation by taking the company´s total spending on goods and services in 2011 and putting that through a Bureau of Economic Analysis formula that uses a “multiplier” to calculate the number of jobs created.

Calculating job creation does come with a fair amount of controversy — namely President Barack Obama´s  stimulus package that has set estimates on jobs created between as few as 1.6 million and as many as 8.4 million jobs. Still, Apple says it is being conservative in its estimates and is not counting an additional 187,000 jobs that have been created as a result of spending by people directly or indirectly paid by Apple.

Peter Cappelli, a professor of management at the Wharton School at the University of Pennsylvania, told Nick Wingfield of teh New York Tims that companies often have a stronger case when quantifying their effects on a regional economy, rather a national economy.

Apple said among outside jobs it has helped support were the delivery services that bring its products to its retail outlets and directly to customers´ homes.

While economists and experts agree that Apple has a huge economic impact that goes well beyond the people it directly employs, they said it was difficult to conclude what the company´s benefit is to the overall job market.

“They certainly have a big economic impact, as does every other firm,” Cappelli said. “If you say, ℠If there had been no Apple, those people would not have jobs,´ that´s not true.”

As an example, Cappelli said that if there were no iPad, the $500 an Apple customer would have spent on the device most likely would not have been put into savings, but rather spent on some other product or service.

You can find Apple´s job creation estimates at http://www.apple.com/about/job-creation/.


Source: RedOrbit Staff & Wire Reports