Wednesday, March 26, 2014
Too Few High Tech Jobs, Too Many Fast Food & Retail Jobs
Facebook recently bought WhatsApp — a company with just 55 employees — for $19 billion. It's rather stunning that a company with just 55 employees can be valued at $19 billion. What's more, the company had estimated revenues of just $20 million in 2013, which makes the purchase price seem all the more irrational.
The acquisition is indicative of the tremendous money and growth in the tech industry. There are so many high-paying jobs in the sector, and so many millionaires in Silicon Valley, that most people would surely love to work for one of the famous (or not so famous) tech companies in the area.
But, despite their sizable revenues and market capitalization, these companies employ a relatively small number of people. For example:
Apple employs 80,300 full-time employees, plus 4,100 full time temporary employees and contractors. However, 42,800 of its employees work in the retail part of the business.
Revenue: $170.9 billion
Market cap: $446 billion
Google employs 47,756 people.
Revenue: $59.82 billion
Market cap: $268.44 billion
LinkedIn employs 43,282 people.
Revenue: $1.52 billion
Market cap: $24.92 billion
Facebook had 6,337 employees as of December 31st.
Revenue: $7.87 billion
Market cap: $134 billion
Twitter had “over 2,300 employees” when it filed for its IPO late last year.
Revenue: $664 million
Market cap: $29.16 billion
In total, these five major technology companies — the likes of which almost everyone has heard of, and where virtually all young people would feel privileged to work — employ a total of roughly 137,000 people.
For comparison, here are America's 10 largest employers, each of which has a workforce of more than 300,000 people. Combined, they employ more than 5.6 million workers.
General Electric: 305,000 total employees
Hewlett-Packard: 331,800 total employees
Home Depot: 340,000 total employees
Kroger: 343,000 total employees
Target: 361,000 total employees
United Parcel Service: 399,000 total employees
IBM: 434,246 total employees
McDonald's: 440,000 total employees
Yum! Brands: (owner of KFC, Taco Bell and Pizza Hut) 523,000 total employees
Walmart: The largest American employer has 1.3 million workers employed in the United States.
The reality is that the workforce of many of these companies is part-time, temporary and seasonal, and many of these jobs are low-paying and poor quality. The bulk of the employees in at least six of these companies (Walmart, Home Depot, Kroger, Target, McDonald's and Yum! Brands) are low wage workers.
Unfortunately, each of these companies employs more than twice as many workers as the five combined technology companies listed above. And Walmart employes ten times as many.
That's a sobering perspective.
We would all benefit from an economy built on higher-wage workers in industries such as science, technology and engineering. But those are not the type of industries that employ the masses. Moreover, those industries all require advanced degrees.
A recent analysis by the National Employment Law Project shows that low-wage positions
account for nearly three out of five jobs generated in the first three years of economic recovery.
So, while America aspires to be a 21st Century global leader — with a workforce largely comprised of well-payed, highly-skilled workers in modern, first-world industries — our economy is bogged down by far too many fast food and retail jobs.
Of course, those are the kind of jobs that keep workers and their families in poverty and on public assistance.
We need more companies like Apple and Google all around the country, not just Silicon Valley, employing millions more people.
But what we have instead are way too many Walmarts, McDonald's and KFCs.