A shout-out to the people who clean Apple’s floors

To understand rising inequality, says the New York Times, consider the janitors at Kodak in 1987 and Apple today.

From Neil Irwin’s Labor Day story in the Sunday Times:

Eastman Kodak was one of the technological giants of the 20th century, a dominant seller of film, cameras and other products. It made its founders unfathomably wealthy and created thousands of high-income jobs for executives, engineers and other white-collar professionals. The same is true of Apple today.

But Kodak also created enough working-class jobs to help create two generations of middle-class wealth in Rochester. The Harvard economist Larry Summers has often pointed at this difference, arguing that it helps explain rising inequality and declining social mobility.

“Think about the contrast between George Eastman, who pioneered fundamental innovations in photography, and Steve Jobs,” Mr. Summers wrote in 2014. “While Eastman’s innovations and their dissemination through the Eastman Kodak Co. provided a foundation for a prosperous middle class in Rochester for generations, no comparable impact has been created by Jobs’s innovations” at Apple.

My take: Irwin’s piece about janitors puts human faces on one of my obsessions—the hollowing out of society. His critique of Apple, I think, is a fair one. Management does treat its contract workers as costs to be minimized, rather than assets to invest in.

For a company that takes pride in doing what’s right, the fact that everybody in the business does it is not a strong defense. If I were a shareholder, of course, I might feel different.

12 Comments

  1. John Kirk said:
    One of the parts of the article that I vehemently disagree with was the suggestion that Kodak created far more jobs than Apple. This is just nonsense.

    Now it would take a trained economist to crunch the actual numbers, but the article reaches its dubious conclusion by measuring jobs by the number of people that each company had on its payrolls. Let’s think of a couple of reasons why this is far too narrow a definition:

    — As the article points out, many jobs are now outsourced. So while Kodak employed the janitors (and thousands of others), those jobs have not disappeared at Apple. They’re being done by third party providers, and Apple is paying them.

    — Developers. Apple helps gobs of developers make literally billions of dollars. The article kind of overlooked that little tidbit.

    — Jobs created by Apps. The number of jobs created by the app economy are seemingly limitless. Uber is an easy example. There is a whole industry that didn’t exist before the smartphone. But there are jobs being created all over the place by apps. This is where a trained economist’s input would be needed. I don’t know the number, but the number of people who have jobs because of the existence of smartphones would be HUGE.

    — And let’s look at the other side of the coin. Apps end jobs too. For example, there are many taxi drivers who are losing their jobs because of Uber. But if you believe in the concept of creative destruction (and every economist does and almost no politician does) then you know that not every job deserves to exist. If the same job is being done better or cheaper on no longer has to be done at all, that is a net benefit to society although it’s a loss to the individual who (temporarily) loses their job. I think George W. Bush may have said it best:

    “We ought to make the pie higher.” ~ George W. Bush

    Just to beat this point to death, the tractor destroyed literally millions of farming jobs. Do you think that was a bad thing? Do you think all those people remained permanently unemployed? Have you noticed that almost everyone in the U.S. today works less hours, for more money at a far less demanding job than did the farmers in the 1900s?

    “Nothing, believe me, nothing is more satisfying to me personally than getting a great idea and then beatin’ it to death.” ~ David Letterman

    — Secondary effects. There are more smartphones than toilets. No really. There are. People simply don’t understand the impact that smartphones are having around the world.

    There are countries where there are small merchants who borrow money each morning, use it to buy goods that they sell and repay the loans each night. (I learned this, by the way, from a great podcast called “50 things that made the modern economy.”

    There are millions of people who have access to banking — people who are nowhere near any brick and mortar banks.

    There are people in sub-saharan Africa who are improving their crop yield by using the internet.

    There are people in the deepest jungles and the most barren deserts who locating new buyers and new markets by using online programs.

    Imagine a big rock dropped into a small pond. The ripples from the iPhone just go on and on and on and on. All this is ignored in the article.

    Is the new economy more unequal? Maybe. I’ve been reading about it, but I don’t feel qualified to say. Is the new economy far larger and are people far, far better off because of the new app economy created by Apple and enhanced by Android? Absolutely.

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    September 4, 2017
    • Fred Stein said:
      Great points. Thanks. Also worth pointing out, that Kodak’s demise entailed lose of jobs, begging the the question of why Neil uses them as the standard.

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      September 4, 2017
  2. Fred Stein said:
    Once again, NYT uses Apple’s fame to make a case. Sad that they have to go back 3 decades to make a comparison, or a point. The hollowing out is due to two factors that are unstoppable – globalization and rise of information economy. Tech companies and nearly all industrial company will align or die off.

    We can, and should, ask success tech companies to do more. (The progress, or lack thereof, is a long debate, maybe a book) The NYT author invokes Steve Jobs. But Tim Cook has changed policies since Jobs died. Albeit under pressure, Apple requires that their US contractors hire union workers. Apple now offer stock to all employees, which according to Glass Door has entry level jobs at $13.34. Apple’s App developer ecosystem is wide open and many self-educated people succeed there, despite the odds being very tough. Apple’s community college coursework, while blatantly self-serving, deliberately targets geographies and communities that a left behind. It’s too early to see if this will work.

    They NYT misses a bigger point. There are other way to help build economic strength for those not on the college track. That takes more imagination and fresh thinking. Back in the 80s we had a thriving furniture manufacturing business in the US, virtually all gone to China. Couldn’t we revive that with higher quality products that appeal to Tesla (or Mercedes or Gucci or Rolex) buyers?

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    September 4, 2017
    • Alan Birnbaum said:
      Actually they undermine the point of the article with their own correction (Hats off to Jim Dalrymple/ Loopinsight) :

      Correction: September 3, 2017
      An earlier version of this article misstated a difference between Apple today and Kodak decades ago. Apple, like Kodak, has created tens of thousands of working-class jobs; it has not failed to do so.

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      September 4, 2017
      • Fred Stein said:
        Great point. You’ve made me think.

        Arguably Apple has done much more than Kodak. They’ve created opportunities for self-taught people, whether App developers or Apple Store employees. These are often entry level jobs on par in entry level pay with the unionized janitors employed by Apple contractors. But their growth prospects are higher. I doubt seriously that the number of Kodak’s janitor employees match the size of Apple Store and App developer workers. PS: I’m glad Apple requires their contracts hire union employees.

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        September 4, 2017
  3. Richard Wanderman said:
    Rochester always has been and still is a very different place to live than Cupertino or anywhere within striking distance of Apple.

    So, it’s tough for even mid-level Apple employees, let alone contract workers to get to work and do their jobs.

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    September 4, 2017
  4. Robert Paul Leitao said:
    Quoting the late Samuel Gompers, an American union leader and founder of the American Federation of Labor (AFL), “The worst crime against working people is a company which fails to operate at a profit.”

    It can be argued Eastman Kodak’s inability to transition its core businesses to the emerging digital technologies of the late 20th Century did more harm to the workers at the company than all of the actions for which the author makes reference and for which he believes the company deserves praise.

    There is at least one rich irony comparing two enterprises from vastly different economic, social, political and cultural eras in our nation’s history that was overlooked in the article. Apple was among the funding parties that financed the acquisition of much of Eastman Kodak’s intellectual property which in part allowed that company to emerge from bankruptcy earlier this decade and continue to employ those that remained at what was left of the company.

    As the author reveals in the article, Apple is responsible for directly and indirectly creating 2 million US jobs and invests over $50 billion annually with US suppliers. The author also mentions that Ms. Ramos, who works hard at Apple as the employee of a contractor, is a union member and is covered by a collective bargaining agreement.

    But perhaps the best evidence the underlying premise of the article is flawed is the September 3rd correction:

    “Correction: September 3, 2017
    An earlier version of this article misstated a difference between Apple today and Kodak decades ago. Apple, like Kodak, has created tens of thousands of working-class jobs; it has not failed to do so.”

    Income inequality in the United States is a real issue impacting tens of millions of workers across our country. But earnest debate on the issue isn’t served by comparing what was then with what is today and despite the author’s efforts, the entire premise of his eloquently written article in my view just doesn’t hold water.

    I certainly wouldn’t wish to go back to the labor, social and cultural conditions that existed in late 19th Century America when Eastman Kodak was founded or even mid-20th Century America when the company was in its heyday.

    In my view the best way to address income inequality in America is to look at the realities of today’s global economy, the preparedness of our educational systems to equip students with the knowledge they need to compete with workers around the world and master the skills necessary to thrive in a fast-automating workplace.

    Let’s leave the “Kodak moments” from 20th Century Rochester, New York in their place and turn the page. We need to address the realities of today’s global economy in real time.

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    September 4, 2017
    • John Kirk said:
      “It can be argued Eastman Kodak’s inability to transition its core businesses to the emerging digital technologies of the late 20th Century did more harm to the workers at the company than all of the actions for which the author makes reference and for which he believes the company deserves praise.”

      Bingo. Instead of criticizing Apple, the author of the article should be chastising Kodak who, by failing to keep up with the times, cost 140,000 plus people their jobs.

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      September 4, 2017
  5. Fred Stein said:
    A “Shout out for the people who” answer the support calls. This article, below, is about the 6000 Apple employees in Austin where 50% are in support. I’ll bet they aren’t earning over $100,000 annually. And note Apple’s involvement in the local community college.

    https://www.bizjournals.com/austin/news/2017/09/01/tim-cook-on-what-apple-does-in-austin-and-why-it.html?ana=yahoo&yptr=yahoo

    Calling out Apple in an article about the hollowing our of America takes us off course. The problem is far too complex.Sure, Apple, like Google, Amazon, Facebook, etc. etc. must pay big bucks to get the best talent. If not, they die – no ambiguity, no middle ground. For the semi-skilled we need more artisans cheese makers, craft furniture, clothing made in America (by the President’s daughter for openers,) and more.

    1
    September 4, 2017

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