Apple Pledges $350 Billion to the US Economy over the next 5 years

64

Thoughts

Comments (64)

64 responses to “Apple Pledges $350 Billion to the US Economy over the next 5 years”

  1. rameshthanikodi

    You know, I don't think America's economic growth is the problem. The economy is awash with money. The problem is middle class wage. Many developed economies have the same problem. The economy is doing phenomenally well. Companies are making more money than ever before. CEO/high-level executive pay packages have surged like crazy. It's just that the employees who run the day-to-day show have don't reap a single bit of the benefit. Their pay has been the the same since the 90's, even when everything else has changed.


    I guess Apple's investment in the "US economy" is still overall good, it definitely is better than hoarding all the cash and buying back stock or doing stupid things like Planet Of The Apps, and of course Apple will grow even bigger and do even better, and if enough companies do this, the economy will grow on paper, but that isn't addressing the economic problem. The economy isn't starved for cash, it's the middle class who is. And none of Apple's moves will matter to the middle-class if their wages don't rise.

    • lvthunder

      In reply to FalseAgent:

      Middle class wages will rise when there is a shortage of middle class workers. Now that unemployment is low the competition for workers will start to heat up leading to higher wages. With technology starting to replace jobs though that works against higher wages.

      • skane2600

        In reply to lvthunder:

        There was a time when being employed meant full-time, with so much forced part-time employment today the official unemployment rate is misleading. The numbers should be weighted by the hours worked to give a more accurate measurement.

        • PincasX

          In reply to skane2600:

          What you are talking about is reported by BLS in the U6 measurement.

          • skane2600

            In reply to PincasX:

            The U6 measurement isn't the official unemployment rate (and it doesn't measure relative work hours either). So you're never going to hear that number mentioned in a conventional news report.

            • PincasX

              In reply to skane2600:

              The BLS releases it as an official number but you are correct that it isn't the big number that is used for unemployment. .You are also correct that it doesn't do hours other than less 40 but that would likely be wildly inaccurate due to the sample size BLS uses. . But it does give an accurate depiction of the number of people working less than 40 hours that would like full time work as well as the number of people that have given up on work. And the point is that there is an official tracking mechanism for what you are talking about.

              • skane2600

                In reply to PincasX:

                I don't know if your point about sample size is valid, but I can understand the difficulty in obtaining more detailed information. Data that doesn't really enter into public or policy discussions, might just as well not exist. The problem is that decisions are made based on a flawed model. Thus we have "experts" scratching their heads about why pay isn't rising much when unemployment is low.

                • PincasX

                  In reply to skane2600:

                  My thinking on sample size is this:


                  BLS uses 60,000 households. For something binary like "some sort of employment vs. unemployed" it is a straight percentage and a statistically relevant sample size. For hours worked the range when asking someone is between 1-39 for not fully employed. Ultimately that gives a lot more data points and I would think would make the hours worked harder to nail down. I could be totally wrong on that though. I know large payroll processing companies like APD release stats so they might have a number that would be fairly accurate since it would be a larger sample size but it would miss the part about people working part time that want full time work.


                  I think a larger problem is that whichever party is currently in office prefers to talk about the U3 as it paints a far more rosy picture than U6 and the party that isn't in power is more inclined to talk U6. As an example, Republicans were all about U6 under Obama with some even claiming that the U3 numbers were made up and now that they are in power they are all on board with U3 and you don't hear a peep about U6. So a big part of the challenge is those in power will happily ignore data that doesn't support their claim. Hence my comments about our toxic political environment.

                • skane2600

                  In reply to PincasX:

                  Did Democrats really talk a lot about U6 under Bush or talking about U6 now? Yes, politicians like to quote data that supports their case while ignoring data that doesn't, but there's no particular reason to believe every party does it to the same degree.

                • PincasX

                  In reply to skane2600:

                  That was long enough ago that I don’t honestly remember. But the economy was so terrible then they didn’t need to even attempt to cherry pick data.


                  Certainly not everyone acts on the same level but currently everything is super partisan and it has rendered the government ineffective. It would be great if someone in leadership showed some sort of leadership.

                • skane2600

                  In reply to PincasX:

                  With a Republican President and Republican-controlled Congress, the only opportunity for leadership to fix things lies with Republicans.

                • PincasX

                  In reply to skane2600:

                  I respectfully disagree. Opposition still requires leadership. At the end of the members of th house and Senate want to be re-elected and their voters can sway them. We saw this with the various attempts to repeal the Affordable care act. Unfortunately the democrats are leaving it to grass to organize voters vs showing leadership.

                • skane2600

                  In reply to PincasX:

                  The Democratic "grass roots" are even less able to change things than Democratic members of Congress unless you are referring to the long term. All the Democratic legislators could do to change the status quo is abandon their values and vote with Republicans. On the other hand moderate Republicans (if there are any) could show leadership by standing up to their more conservative colleagues and not allow some of the more extreme bills to get through.

                • PincasX

                  In reply to skane2600:

                  The public opposition to the attempts to repeal the Affordable Care Act changed things. People organizing grass roots movements managed to flip enough Republicans in the Senate to kill the bill. Democrats power is in rallying public support something they aren't doing. Which is a shame given they won the popular vote by 3 million and have only grown in the Senate and the House. Public option in clearly with the part but there are no attempts to harness it. They seem content to let Republican infighting do the work of defeating the Republican agenda. I guess the Democratic party is in luck because the level of incompetence shown by Republicans is mind bending.

                • skane2600

                  In reply to PincasX:

                  There was very wide public opinion against repealing the ACA, yet only a very few Republicans in very specific situations voted against the repeal. Except for one, all of those Republicans who voted against the repeal had no problem voting to weaken it later. Had a strong grass roots effort really influenced the results we would have seen a much broader defection and a sustained effort to maintain it on the part of Republicans.


                  I'm not sure what you think "rallying public support" would mean beyond what Democrats in Congress actually did to protect the ACA.


                  The first real opportunity for grass roots efforts to protect the ACA will come in the 2018 election because the outcome of elections count while public opinion often doesn't.

                • PincasX

                  In reply to skane2600:

                  There were very organized groups that took in the ACA repeal and yes they targeted Republicans that were most were most likely to flip. Going after everyone would have been a waste of time. The Democratic Party didn’t really take part in that.


                  The Democratic Party has done squat on voter outreach and has no message going into the midterms. As much as I loath the RNC they did manage to go from

                  having their ass handed to them in 2008 to winning the midterms due to voter engagement and working the the “tea party” movement. The Democratic Party isn’t taking the same approach. So while I think embracing the Tea Party was a disaster for the country, and likely for the RNC it is the type of leadership and voter engagement that the Democratic Party needs.



                • skane2600

                  In reply to PincasX:

                  So which Republicans do you claim were flipped via a grass-roots movement and which grass-roots organizations did the flipping? It might be satisfying to believe that grass-roots efforts made the difference, but that doesn't mean they did.


                  It's not unusual at all for the party not occupying the WH to increase their numbers in the midterms.


                  Democratic "Voter outreach" would have been of little value in 2017 since there were no elections (except for special ones).


                  I disagree that Democrats have no message. The danger is in letting the Presidential loss lead to a fracture in the party.

                • PincasX

                  In reply to skane2600:

                  Collins, Mcain and Murkowski in addition to others were all targeted. Grass roots = people organizing locally though there were some larger groups.


                  Another stunning failure in Democratic leadership happened yesterday when they caved and gave the Republicans what they wanted. Where was the attempt to rally public support? Shit, they got Mitch McConnell to personally stop funding for the military and then failed to make that an issue and subsequently got blamed for cutting off military funding. You are more than welcome to support them but the party is currently a joke. That really sucks for those on the left that would like to be represented in government.

        • rameshthanikodi

          In reply to peten1020:

          "Pew Research Center defines it as adults whose annual household income is two-thirds to double the national median, which was $55,775 as of 2016. That means singles making between $24,000 and $72,000 annually are middle class"

          • PincasX

            In reply to FalseAgent:

            Sorry, I may misunderstand the Pew numbers but isn't two thirds to double get to a range of 36,800 to 111,550?


            If so then sixty percent of the population is below middle class and less than ten percent of the population is above it. That would lead me to believe our economic challenges are far larger than middle class wages. Maybe I'm doing the math wrong.

  2. Usman

    The last time they said they were going to invest in US manufacturing, which in turn meant investing in US based companies like Corning (who make gorilla glass) who then just invested that in over sees manufacturing.


    Only reason Apple is bringing back their cash, is because the US voted to reduce corporate taxes, so now it costs them less to bring their money back into the US, and is likely to go to shareholders.


    I'm very skeptical of these kind of moves, there's no evidence of it ever benefiting an economy, it benefits the stock market but doesn't improve the velocity of money within the economy. If anything it smells like another excuse to justify trickle down economics, which just does not work.

    • skane2600

      In reply to Usman:

      Only corporations are considered to be doing us a favor when they pay their taxes at a reduced rate. US based corporations should have been paying taxes based on all their income regardless of where it's earned from the beginning. The fact that there's this loophole is just another example of corporate welfare.

      • offTheRecord

        In reply to skane2600:

        "US based corporations should have been paying taxes based on all their income regardless of where it's earned from the beginning."


        Yes, but they also have to pay tax to other foreign tax jurisdictions (such as other countries). Tax treaties usually grant credit for taxes paid elsewhere. Thus, it's not like all of this money has never been taxed. It has already been taxed somewhere. It just hasn't necessarily been taxed at U.S. corporate tax rates -- which, prior to the Tax Bill. were much higher than many foreign corporate tax rates; which is why many companies avoided repatriating profits, which this "loophole" allowed them to do, and preferred to pay the foreign corporate taxes, instead.

        • skane2600

          In reply to offTheRecord:

          As is well known, most US companies pay less than what corporate tax rates would indicate. Yes, they took steps to lower their taxes which under current law is legal but that doesn't make it any less of a loophole (no quotes required).

          • offTheRecord

            In reply to skane2600:

            I'm not referring to the "effective" tax rate. That's an entirely different discussion rooted more in accounting minutiae than in statutory tax rates.


            Until the recent Tax Bill changed the U.S. corporate tax system to a territorial-like system, that "loophole" served a very important purpose. It would have been very hard for any rational multinational corporation to justify being U.S.-based without it. Congress understood that, which is why it existed in the first place. Now that the U.S. corporate tax system is more of a territorial system, that exemption isn't necessary to keep companies from moving their HQs to another country.

            • skane2600

              In reply to offTheRecord:

              If you are going to make an argument that companies are keeping their profits overseas because of high US taxes you have to talk about the taxes they actually pay not the taxes they would theoretically pay. As a practical matter "effective" tax rates are the only ones that matter.

              • offTheRecord

                In reply to skane2600:

                I'm not making any arguments about what companies do with their profits or why. There are way too many variables that affect individual companies differently. I'm merely commenting on the U.S. "statutory" corporate tax regime and how legislators in the U.S. approached it before and after the Tax Bill was enacted.

    • offTheRecord

      In reply to Usman:

      "Only reason Apple is bringing back their cash, is because the US voted to reduce corporate taxes, so now it costs them less to bring their money back into the US"


      The tax rate will be lower due to the new Tax Bill, but they're not necessarily bringing it back because the tax rate will be lower. They're bringing it back because the new Tax Bill says they *must* pay a tax (at a special low rate) on it *now* whether or not they repatriate it. Since they have to pay the tax *now* whether or not they bring it back, they might as well bring it back.

    • PincasX

      In reply to Usman:

      The investment in Corning went to their plant in Kentucky which, last I checked, is not overseas.

      • Usman

        In reply to PincasX:

        There hasn't been any development regarding this claim, this information was from end of last year, there has been no confirmation from Corning regarding an increase amount of jobs in their Kentucky plant or an expansion of the manufacturing facility. No plans to expand facility where submitted to the Mercer County Planning Comission.


        Gorilla glass is manufactured in east asia and evidence shows Corning is investing more so in that region.


        I'm saying that there's only been claims of the investment going to the plant, but nothing has materialised.


        I am more than happy to be proven wrong on this case.

        • PincasX

          In reply to Usman:

          Burdon of proof is interesting in that it obligation of the person making the claim. You have claimed the Corning has diverted the money that it was given by Apple to Asia and offer no evidence to back that up. It isn't a matter of proving you wrong, you haven't proven your claim to be correct. Apple said it was investing in the investing 200 million to help Corning with R&D and equipment costs with a focus on the Harrodsburg Kentucky plant (where they also make Gorilla Glass).


          Please show your evidence that Corning diverted the money out of country? All you have offered so far is conjecture at best.



  3. Roger Ramjet

    This is just a big PR/political headline. Apple isn't putting in "$350 Billion to the US Economy", please read the fine print if you are going to repost things.

    • Bats

      In reply to Roger Ramjet:

      LOL...why don't YOU tell us what the fine print is.


      All in all, I think you're scared that the economy will boom, because of this.

      • Roger Ramjet

        In reply to Bats:

        Well, I would expect a person posting headlines to do their DD. But if it is considered fair use, I will excerpt from The Verge: (for some reason links don't work for me on this site)


        That means that Apple isn’t just dropping $350 billion in cash into the US economy. It’s not entirely clear how Apple is reaching that number, but a lot of that money is just part of the company’s normal accounting for things like buying component parts and growing its digital software marketplace. According to Apple’s press release, just $75 billion of that total number will come from capital expenditures, new investments in manufacturing, and its repatriation tax payment, which could imply that the rest of the number is simply the effects of a company as large as Apple having its regular impact on the US economy through its normal growth and spending.

        Ah, that fine print.


        • PincasX

          In reply to Roger Ramjet:

          To be fair, The Verge is just reporting what Apple said though somewhat inaccurately. Only 40 billon is going toward capital expenditures. Apple never claimed it was just dropping 350 billion in cash into the U.S. economy they said what were doing over the next five years. I would take issue with The Verge characterizing it as "normal growth and spending" as a 27%+ is probably way more than most companies normally grow and spend. Also it wasn't hidden in "fine print" it was laid out really clearly for anyone to read.



          • Roger Ramjet

            In reply to PincasX:

            The headline (of which there was no actual detailed post to qualify it on this thread), grossly misstated the value of the investment proposal, that is as "fine print" as anything gets. I simply tasked the person who posted the headline (without any detail or qualifier) to do so, colloquially, "read the fine print before you post".

            And besides, the headline was everywhere on the internet, and other media. So, that difference between the headline and actual detail is not something The Verge created. Some PR person who knows how the system works wanted that "headline number" to get out, while providing detail explanations that showed more realistic numbers in the body that were wildly less (the justification is probably a putative multiplier effect, but it's deliberately misleading/dishonest statement making). I just picked 1 report that was handy, it could have been from joblow.com, nothing to do with The Verge.

            Since Apple is so large and influential watch other companies follow. I guess we will soon see trillions and trillions in virtual investments. Kinda fitting for the times.

            • PincasX

              In reply to Roger Ramjet:

              I didn’t say The Verge created anything I pointed out the data source for what they were saying. I also took issue with calling 27% growth “normal” a look at out GDP points out how wrong that is.


              What you apear to be saying is that Apple’ PR is deliberately misleading and that some story’s like the Verge are calling that out but the people that are doing said calling out are using the same press release detail to explain what is happening. That is a bit of a paradox. Apple is both misleading and providing details that are true in the same document.


              I think what is happening is some media outlets are providing detailed articles about what Apple is doing, you know journalism and a lot more or going for straight up clickbait like the person that titled this thread.



              • Roger Ramjet

                In reply to PincasX:

                Well not exactly, The Verge excerpt I put up there for example stated clearly that: "... It’s not entirely clear how Apple is reaching that number ..." so there is no paradox. Apple threw out a bunch of headline numbers, they didn't tie their numbers together, or make good effort to explain what some non-standard terms might mean, they put a mighty number up front, which is what he internet would grab. On their website, headlines:


                1. Apple Accelerates US Investment & Job Creation, big headline, followed by sub heading:
                2. $350 Billion Contribution to US Economy over the next 5 years
                3. Blah blah blah


                They never explained how their $350 Billion "direct contribution to US economy" tied to anything, what does "direct contribution to US economy mean"? But any lay person reading it sees, #1, "investment" & "jobs", and sees #2 immediately. Then they went to town. Some like The Verge questioned, but Apple did not provide them enough data to know what the number meant. Why release something in the lay public domain that requires an econ degree to understand?


                • PincasX

                  In reply to Roger Ramjet:

                  The problem here is you expect the headline of a press release to have 100% of the details. You clearly didn’t read the content as it has much of what you are saying wasn’t answered.

                • Roger Ramjet

                  In reply to PincasX:

                  No, I did read the content. I could not find anything that added up to $350 billion in there, and I saw no other explanation for what they meant by "$350 billion contribution to the US economy". They had some other things in there that may make sense on their own, but if you are trying to get what they mean in the headline, it is confusing at the least, no two ways about it.

                • PincasX

                  In reply to Roger Ramjet:

                  I managed to break bout the math above. It isn’t terribly complicated.

      • peten1020

        In reply to Bats:

        Really?! Is this your best argument?

      • PincasX

        In reply to Bats:

        I'm not afraid of a booming economy. I am highly skeptical that a 75 billion dollar increase in spending by one company over five years will cause a domestic boom. It will likely help some regional economies like wherever they put the new campus.

  4. rehooks47

    Apple just announced today they will create 20k new US jobs. What kind of jobs and where will they be?


    Apple also announced paying $35 Billion in US Taxes to repatriate overseas earnings. How much of Apples overseas holdings does this represent?

  5. Tony Barrett

    Other than being complete bull, it makes for great headlines!

  6. PincasX

    So, trying to parse Apple's press release here.


    "Combining new investments and Apple’s current pace of spending with domestic suppliers and manufacturers — an estimated $55 billion for 2018 — Apple’s direct contribution to the US economy will be more than $350 billion over the next five years, not including Apple’s ongoing tax payments, the tax revenues generated from employees’ wages and the sale of Apple products."


    So Apple isn't adding 350 billion to what they were planning to spend, they are adding 75 billion to what they were planning to spend over the next five years. The growth will come from:


    • 30 Billion in U.S operations including adding a fourth campus and 20k in new jobs.
    • 10 Billion in its various data centers.
    • 4 Billion added to its Advance Manufacturing fund.


    That leaves 31 billion left to go to something. I doubt it will all go to its coding education initiatives.


    Here are my take aways:


    Is this largely PR? Yes, even if 75 billion isn't a small amount and is a drop in the bucket given the size of the U.S economy. But given how much of beating Apple has gotten for not repatriating cash I can see why they are making a big deal out of it now that they are. I also think this also meant to combat the cyclical "Apple is doomed" because of some dubious data point. A company that is seeing a slow down doesn't plan to add a fourth campus or increase their workforce by 25%. Lastly, its a pretty good barometer of our crappy political environment. Overall it looks like Apple is being shrewd and playing offense.



  7. PincasX

    In reply to peten1020:

    I read press release as 30 billion toward adding a new campus as well as adding jobs at its current locations plus 10 billion more toward data centers.


    Also the Advance Manufacturing Fund is growing by 4 billion, the first billion would have been accounted for in the 275.

  8. skane2600

    I Pledge $30 to the US Economy this week by buying coffee from my favorite coffee vendor. Apple is investing its money in its business, its not a charitable donation.

    • shameermulji

      In reply to skane2600:

      Nobody said it was a charitable donation.

      • skane2600

        In reply to shameermulji:

        The word "Pledges" is not usually associated with a company's intention to invest in themselves. This is being presented by Apple as if they are doing somebody a favor whether they mention the word "charity" or not.

        • PincasX

          In reply to skane2600:


          That would be a fair point but Apple didn't use the word pledge they used the word invest .... repeatedly. Just read their press release on it. The pledge part came from someone else.


          • skane2600

            In reply to PincasX:

            Obviously the press release was intended to suggest Apple was going to help the economy. There would be no point making this public other than trying to self-promote. They could invest in themselves without making a big deal about it.

            • PincasX

              In reply to skane2600:

              Yes, company press releases tend to paint a company in a positive light that isn't exactly a news flash. There are in fact things in the press release that will be good for the economy (20k new jobs for example) but given the size of the economy that is a very small drop in the bucket. But then you attributing things to them "charity work" and "pledge" is as disingenuous as you claim they are being.


              You are correct that they could invest without mention but I think the press release is a product of two things:


              1. We have reached the yearly cycle where tid bits from the supply chain mean the iPhone sales are bottoming out. I think this is, in part, Apple's attempt to show they still see growth and are growing accordingly without getting into product details.
              2. It is also a indication of how toxic our political environment is. Companies shouldn't feel compelled to whip out there d--k and say what they are doing but sadly that is where we are at and we have seen from ATT and Wells Fargo among others.


              I personally find that second reason obnoxious as I suspect you do but sadly that is where we are.

              • skane2600

                In reply to PincasX:

                "Yes, company press releases tend to paint a company in a positive light that isn't exactly a news flash. "


                Obviously, but the frequency with which companies pat themselves on the back, doesn't render the self-serving aspect immune to criticism or render critics disingenuous.

                • PincasX

                  In reply to skane2600:

                  I totally agree with that point but your criticism wasn't due to frequency. What was disingenuous was this:


                  "Apple is investing its money in its business, its not a charitable donation."


                  Your insinuation is that Apple was trying to spin this as charity and not investments when they clearly called them investments.


                  and this:


                  "The word 'Pledges' is not usually associated with a company's intention to invest in themselves." 


                  Apple never said the word pledge and by putting it in quotes you are implying that was used by Apple when it wasn't. Again, they used the word investment.


                  In short, you are bashing them for not talking about their investments as investments when they very much did talk about them in that way. That is totally disingenuous.


                  If you feel they congratulate themselves too much or whip their d-ck around to much then that is fair enough. Criticize those points but don't make things up.

                • skane2600

                  In reply to PincasX:

                  The phrase "it's not a charitable donation" isn't a claim that anyone said it was, just an acknowledgement that they pitched it as a benefit to the country. In recent years there's been a pattern to treat the addition of new jobs by a company as doing people a favor and this is consistent with that view IMO.


                  I put quotes around the word "pledges" because that's proper usage. Apparently I mistook the characterization of the author with what Apple actually said in their release. That was a mistake on my part, but doesn't change the fact that they are suggesting their are helping the country.


                  Here's a headline direct from Apple's newsroom: "$350 Billion Contribution to US Economy Over Next Five Years" Note the word "contribution".

                • PincasX

                  In reply to skane2600:

                  I get it, you are bound and determined to paint Apple poorly on this no matter where you have to move the goal posts. I am very aware of what the press release said. Unlike you I actually read it prior to commenting.


                  I honestly think your issues is with how some in the press and otherwise are characterizing it. It does seem there are some that are out to canonize Apple for just doing business and that is not only tiring but just bullshit.


                  Also bullshit is people lining up to give the tax cuts credit for this when yesterday Tim Cook stated that a bunch of what they were doing was going to happen with or without the cuts.

                • skane2600

                  In reply to PincasX:

                  Not moving the goalposts at all. My consistent point was that Apple was characterizing this as beneficial to the country and my quote illustrates that's exactly what they did.


                  I would make the exact same claim if it was Microsoft, Google, Amazon or any other company.

                • PincasX

                  In reply to skane2600:

                  We are going to have to agree to disagree or talk in circles. I’m suggesting the former.

  9. GT Tecolotecreek

    Still waiting to hear what Microsoft and Google are going to do with their repatriated cash.

    At least Apple is doing something positive.

Leave a Reply