Posted Monday, March 5, 2012, at 5:44 PM
514,000 jobs or no, Apple's real contribution to the American economy has been the $400 billion of stock market value it's created over the past three years.
Photo by Kevork Djansezian/Getty Images
Apple shareholders must be scratching their heads after the gadget king commissioned a study showing it produces around half a million jobs in the United States. After all, subjective reports like this miss the point. Apple has created $400 billion of stock market value over the past three years. That’s good for the American economy and capitalism.
Ripple-effect estimates like the one Apple released this week are more PR than science. Apple directly employs some 50,000 people. The other jobs alluded to in the study are contractors or third-party support - from applications developers to UPS deliverymen. The numbers reported are rough approximations at best, misleading at worst.
For example, many of the company’s reported 200,000-plus app developers might be employed even without Apple, since they also work on software for Android and other platforms. And third-party support workers are calculated using multipliers based on metrics like sales. But most delivery trucks and jets will carry more than just Apple products, so direct dependence is tough to gauge.
The tech giant has its reasons for commissioning and publicizing a job creation approximation. The company’s late founder Steve Jobs was reported to have told President Barack Obama a year ago that jobs manufacturing iPhones and other gadgets lost to Chinese factories aren’t coming back. It also gives regulators, like antitrust watchdogs scrutinizing Apple’s market position, a sense of what’s at stake.
But there’s a danger to Apple protesting too much. While Apple has a moral duty to ensure that workers assembling its products are not mistreated - the gist of recent scrutiny over its use of contract manufacturers - it has no obligation to ensure full employment in its home market, or anywhere else. In the long run, overstating its case as a provider of jobs may actually give its critics more ammunition with which to attack.
The primary fiduciary obligation of Apple’s board of directors is to shareholders. And 90 percent of those reporting their holdings of Apple stock are American individuals or institutions. Since the financial crisis, Apple’s market cap has surged from roughly $100 billion to half a trillion today. By that measure, Apple has little reason to engage in the kind of economic fudgery best left to politicos on the campaign trail.
Read more at Reuters Breakingviews.