How Many U.S. Jobs Does Apple Really Create? | WAMU 88.5 - American University Radio

How Many U.S. Jobs Does Apple Really Create?

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Apple has about 47,000 workers in the U.S. That's not a huge amount for such a profitable and influential company. Now the tech giant is saying it has actually created about 10 times that many jobs indirectly.

Some economists are skeptical of the claim. And the move comes as Apple is facing increased criticism and scrutiny over labor practices at factories it outsources to in China.

For a long time, Apple has enjoyed one of the best public images imaginable. But more recently, those images are being challenged by something much less fun — reports of dangerous working conditions at the Chinese factories where iPads and iPhones are made.

Now, amid growing concern about its outsourcing practices, Apple has posted a study showing that it has created or supported more than 514,000 jobs in the United States. That includes glass manufacturers, FedEx, UPS and a whole new mini-industry of people developing apps for the iPhone and iPad. But some economists are skeptical.

University of California, Berkeley economist Enrico Moretti has written a book about this kind of indirect job creation. He says Apple's total job creation estimate is too high — the real total is somewhere between 300,000 and 400,000.

"My own research suggests that for each additional job in the average high-tech firm, five additional jobs are created outside that firm in the local community," Moretti says.

And when well-paid tech employees spend a lot of money, that also creates jobs. According to Moretti, "That would suggest that at the local level, Apple generates about 300,000 jobs all together in the U.S."

Forest Economics

Peter Cappelli, an economist at the University of Pennsylvania's Wharton School, says the entire exercise of guessing indirect job creation is inherently misleading. Cappelli says big companies are always coming up with these projections, sometimes in an effort to get tax breaks from local governments.

"I think one of the ways to think about this is the economy is a little like, say, a forest, and a big company is sort of like a big tree in a forest," he says. "If you're the big tree and you're looking around, you say, 'Look at all the shade I'm providing here, this is really impressive.' That's certainly true. The question is if the tree goes away, what happens?"

Well if the big tree wasn't there, other trees would grow up to take its place, and younger trees would come up in the middle. In other words, there wouldn't just be a big hole in the forest. By that same token, if you don't spend $500 on an iPad, you might spend that money on another computer or maybe a down payment on a car that was actually built in the U.S.

"It's a pretty squishy process to try to figure out," Cappelli says.

Apple isn't talking about why it came out with this jobs study when it did, but the company has said it is committed to improving working conditions at the factories it outsources production to in China.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

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