Tech Titans Are the New Masters of the Universe, Be Afraid: Kotkin
When Steve Jobs died, Occupy Wall Street was in full effect. Yet those who were fighting for wealth equality and the end of the banking oligarchy held a moment of silence in honor of the Apple co-founder, who had a net worth of $7 billion.
Jobs “didn’t believe in charity," writes Joel Kotkin in The Daily Beast. Apple (AAPL) was a company that "had more cash in hand than the U.S. Treasury while doing everything in its power to avoid paying taxes...Jobs was being celebrated by those who should have been fighting against him."
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Kotkin believes that tech gurus are America’s newest set of oligarchs. They hurt competition and hold great influence with government officials. They don’t create many U.S. jobs, they don’t pay much in taxes, and yet 72% of Americans express positive feelings for their industry.
Auto executives flying in private jets set the American public into a rage in 2008 and yet no one complains about Google’s (GOOG) fleet of private jets in San Jose or the tech giant's proposal to build a private $85 million flight center, Kotkin argues. Tech oligarchs are also taking jobs away from Americans, he says.
“Perversely, the small number of jobs -- mostly clustered in Silicon Valley and created by tech companies -- has helped its moguls avoid public scrutiny," Kotkin points out in the accompanying clip.
Kotkin compares the domestic workforce of major Silicon Valley companies to other Fortune 500 U.S. corporations: 50,000 Google employees versus 200,000 U.S. workers at General Motors (GM). Facebook's (FB) 4,600 workers to Ford's (F) 164,000. Exxon's (XOM) 100,000+ staff to Twitter's 1,000.
Google, with a market cap of $215 billion, is about five times larger than GM yet has just one fourth as many workers.
"This is an equation that defines inequality: more and more wealth concentrated in fewer hands and benefiting fewer workers," Kotkin says. “If you look at the wealthiest people in the country, particularly the wealthiest people under the age of 40, they’re heavily tilted towards the Silicon Valley."
The youngest billionaire in the U.S. is Mark Zuckerberg of Facebook whose net worth totals $12.4 billion. He's followed by Sergey Brin of Google, the 21st richest person in America, with $25.5 billion.
“Ten of the world’s 29 billionaires under 40 come from the tech sector, with four from Facebook and two from Google. The rest of the list is mostly inheritors and Russian oligarchs," writes Kotkin.
Facebook paid no taxes last year, despite making a profit of more than $1 billion. Apple’s Tim Cook testified in front of Congress this week about how his company manages to pay so little in taxes.
These companies are also trying to use their influence to sway politics. Facebook’s lobbying budget grew from $351,000 in 2010 to $2.45 million in the first quarter of 2013. Google spent $18 million on lobbying in 2012.
So why do these companies get a free pass when it comes to public opinion?
“In our era we have grown up to love our toys,” Kotkin tells The Daily Ticker. “I think it has a kind of halo effect. People don’t realize that this is not as clean and carefree as we tend to think.”
“These are industrialists, these are capitalists and we should celebrate their successes but we should be very careful,” he adds.
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