- Eric Reguly examines Apple as a prime example of how supposed market successes actually reflect the private capture of public investments - and suggests the public should benefit financially from its investments which facilitate corporate growth:
Apple is such a runaway success that its profits pile up like snowdrifts in the Rockies. At last count, Apple was sitting on $165-billion (U.S.) in cash and securities. That’s more than the GDP of Hungary.- Kev points out how employers see even their own employees as disposable tools rather than people worthy of human dignity. And Yvonne Roberts discusses what economy built on that assumption means for far too many workers:
What to do with the windfall?
Here’s another idea: Give the surplus cash back to the taxpayer.
It will never happen, but if you believe that the stakeholders who are responsible for Apple’s success should be rewarded, taxpayers would certainly take precedence over the hedgies. Greenlight and its ilk had absolutely nothing to do with Apple’s journey from garage start-up in 1976 to the world’s most valuable tech company. They did not provide any of the capital. Apple has tapped the public markets only once, in 1980, when its initial public offering raised $97-million (U.S.). In fact, taxpayers provided the lion’s share of the funding for many of the key inventions that are built into every Apple device.
(W)hat powers the iPad, iPhone and iPod? Lithium-ion batteries developed by the U.S. Department of Energy. How about the devices’ liquid-crystal display? That came from the National Institutes of Health, the National Science Foundation and the Department of Defense. The Internet, GPS, SIRI (the intelligent personal assistant used in Apple's operating system) and DRAM cache did not start life as Jobs’s back-of-the-envelope doodles. They came out of the U.S. Defense Advanced Research Projects Agency and other government bodies.
Governments also supplied much of Apple’s brainpower. Thousands of its engineers and technicians have been recruited from the finest U.S. (and Canadian and British) universities. “Operating in the United States, Apple should recognize that the knowledge base on which its success has been built can be traced back to government investments,” said academics William Lazonick, Mariana Mazzucato and Öner Tulum in a 2013 paper titled “Apple’s Changing Business Model: What Should the World’s Richest Company Do with All Those Profits?”
The concept of imposing a special fat-profits tax on a single company is legally absurd and morally dubious, but the concept of imposing taxes on the supernormal profits of companies that benefit the most from government spending (such as those in the technology and defence industries) is not.
Entrepreneurship is the pulse of a thriving economy but, according to the thinktank the Resolution Foundation, one in four who, like Almond, became self-employed in the last five years would rather work for a boss; their situation is involuntary. As employers use ever more aggressive tactics to reduce labour costs and restrict collective action, productivity is suffering and patterns of employment initially viewed as temporary are becoming permanent. The gap between the richest and the rest widens. This is not unique to the UK.- In a similar vein, Elise Gould and Frances O'Grady make the case for wage growth (and political and economic environments which put workers in a position to demand it) in the U.S. and the U.K. respectively.
This story of wage stagflation and the working poor is just as applicable in Britain. Beyond chancellor George Osborne's talk of economic recovery, the stories are legion of families and communities across the whole of Britain who are only just managing to keep afloat. No matter how often Osborne says it, it doesn't make it true. Large numbers of Britons are not in recovery. The gulf between those getting by and those getting on grows each month.
In the UK, as elsewhere, underemployment, a lack of investment in training and low pay are rife. Forty per cent of part-timers, mainly women, would like longer hours, according to one survey. At the same time, for many on low pay the last several years have seen the cost of living soar as their wage packet has shrunk.
Huge income disparities and increased casualisation of the workforce also means higher costs for the taxpayer subsidising low wages. Research last year by Landman Economics showed that the cost to the exchequer of millions of workers paid less than the living wage – "wage dodging", as the GMB calls it – is £3.23bn a year in social security spending and lower tax receipts. In a paper published last month, academics Dr Lydia Hayes and Professor Tonia Novitz considered how the cake could be sliced more fairly. They say economic inequality was at its lowest when 58% of workers were in trade unions and 82% of wages were set by collective bargaining. By 2012, 26% of the workforce was in trade unions and only 23% covered by collective bargaining, while the gap between top earners and the lowest is higher than at any time since records began.
Among the recommendations Hayes and Novitz make is sectoral bargaining to set terms and conditions across particular industries, and the right for employees to join a union without repercussions. Other proposals from the High Pay Centre include worker representation on company boards, remuneration committees, a maximum pay ratio and a legally binding target for the reduction of inequality.
- Nicholas Kristof discusses the appalling link between race and wealth inequality in the U.S. Josh Fullan and Josh Lorinc report on a program encouraging Toronto students to see how different their city looks at varying income levels. And the AP reports that 40 per cent of Michigan's households lack enough income to meet basic needs. (Which most of us see as a problem to be solved, with the notable exception of the Fraser Institute which claims that Michigan's anti-worker policies and consequent impoverishment of its citizens make for a goal to be pursued.)
- Finally, Jeffrey Simpson highlights the absurdity of Stephen Harper making yet another publicity tour of Canada's North while refusing to so much as acknowledge climate change which is radically altering the region.