60 Minutes, How Many Jobs?

My colleague and Race Against the Machine co-author Erik Bynjolfsson and I were part of the 60 Minutes story “March of the Machines” that aired last night.

I was really pleased with the piece. Reporter Steve Kroft and producers Maria Gavrilovic and Harry Radcliffe did a great job telling a complex story without trivializing it, and presenting a point of view without being sensationalistic or alarmist. Please do check it out, and let me know what you think.

The team did a thorough job of fact checking, contacting us several times as they were assembling their story. However, they did air a clip of me reciting some outdated statistics, so let me give better ones here.

I said that Apple, Amazon, Facebook, and Google combined employ fewer than 150,000 people, which is less than the number of people entering the American workforce every month. I drew the employment numbers from this graph posted by The Economist’s ‘Graphic Detail’ in February of 2012. (It has the four combining to employ 151,200 people, so I should have said “about 150,000.”).

All these companies are still growing and hiring, and the most recent data my RAs could track down, which was from the second half of 2012, has the ‘four horsemen‘ combining to employ about 188,000 people. How many months worth of population growth is this? The Jobs Calculator supplied by the Federal Reserve Bank of Atlanta provides a handy way to estimate an answer. If we want the US unemployment rate to stay where it is — 7.8% — over the next year, we’ll need to add about 103,000 jobs a month.

So a more current and correct statement is that Amazon, Facebook, Google, and Amazon have a combined market capitalization of more than 900 billion dollars (as of today) yet employ fewer than 200,000 people, which is less than the number of net new jobs we’ll need to create every two months in America just to hold the unemployment rate steady.

In short, I wouldn’t look to the tech sector to put America back to work.