Saturday, November 24, 2018

Amazon v. Foxconn. Which Is Better?

Actually, I had this discussion with a couple of co-workers the other day.  Both "knew" that Walker had been snookered by Foxconn, compared to the way Amazon got the better of New York and Virginia.

Both of them didn't think past Step One.  Tim Sheehy actually does, just as I did for my pals.  It's a credit to Romell that he printed Sheehy's salient remarks.

...“When you do the math straight up, Wisconsin paid more per job,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. But, he added, that’s partly because of “the multiplier and the supply chain that flow out of manufacturing versus out of Amazon.

Analysts use multipliers to project the additional jobs generated as the salaries and other money from a new business spread through the economy.

As a manufacturing operation, Foxconn has a higher jobs multiplier than Amazon, a services firm, Sheehy said.

He pointed to a 2017 study of Foxconn’s economic impact projecting that every 100 jobs at Foxconn will create another 170 jobs at other companies in Wisconsin. A study of the impact of the Amazon development in Virginia, meanwhile, projects that every 100 Amazon jobs will create another 88 to 99 jobs in that state....
To over-simplify:  Harley-Davidson employs a bunch of people.  But even with that bunch of people, Harley-Davidson does not make its own motorcycle seats.  Milsco makes those--and Milsco employs another bunch of people.  The brakes are made someplace else, too, as are the tires, speedometers, electornics, etc., etc., etc.  In contrast, Amazon is a secondary HQ.  Won't require supply-chain, but will (like Harley) require outside service firms:  accountants, caterers, etc. 

The J-S item quotes Amazon as stating that their jobs will pay 'an average of $150K/year.'  Well, maybe.  That's a helluva lotta money for purchasing slots, even in NYC and DC.  We'll see.

By the way, Z-Man has made another significant point about Amazon:  they are spending the 'social capital' of American brick-and-mortar retailers while putting them out of business.  What does that mean??

Joe's Hardware sponsored a kids' baseball team with a $500.00 check.  Maybe he also sponsored a bowling team for $300.00, and handed out various hardware items for door-prizes at a couple of local churches, worth, say, $250.00 all-told.

Which of those activities does Amazon do?  Which baseball team, in every town in America?  Which church door-prizes?  Hmmmm?

And Ticker has done the math; it's likely that Amazon is running at a loss, except for Gummint welfare and tax benefits--and, oh yes, shareholder generosity.  When will that game end?  Hmmmm?

Walker--and Trump--did just fine bringing Foxconn to Wisconsin.  But if you're so damned opposed to Foxconn, then forbid your children and grandchildren from working there.  Have them work for Amazon, instead.  Or Racine United School District!!

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