These days, that's a dicey proposition - as Robert Reich points out:
If you ever wonder what’s fueling America’s staggering inequality, ponder Facebook’s acquisition of the mobile messaging company WhatsApp.
According to news reports today, Facebook has agreed to buy WhatsApp for $19 billion.
That’s the highest price paid for a start-up in history. It’s $3 billion more than Facebook raised when it was first listed, and more than twice what Microsoft paid for Skype.
Given that gargantuan amount, you might think Whatsapp is a big company. You’d be wrong. It has 55 employees, including its two young founders, Jan Koum and Brian Acton.
Whatsapp’s value doesn’t come from making anything. It doesn’t need a large organization to distribute its services or implement its strategy.
It value comes instead from two other things that require only a handful of people. First is its technology — a simple but powerful app that allows users to send and receive text, image, audio and video messages through the Internet.
The second is its network effect: The more people use it, the more other people want and need to use it in order to be connected. To that extent, it’s like Facebook — driven by connectivity.
WhatsApp’s worldwide usage has more than doubled in the past nine months, to 450 million people — and it’s growing by around a million users every day. On December 31, 2013, it handled 54 billion messages (making its service more popular than Twitter, now valued at about $30 billion.)
How does it make money? The first year of usage is free. After that, customers pay a small fee. At the scale it’s already achieved, even a small fee generates big bucks. And if it gets into advertising it could reach more eyeballs than any other medium in history. It already has a database that could be mined in ways that reveal huge amounts of information about a significant percentage of the world’s population.
The winners here are truly big winners. WhatsApp’s fifty-five employees are now enormously rich. Its two founders are now billionaires. And the partners of the venture capital firm that financed it have also reaped a fortune.
And the rest of us? We’re winners in the sense that we have an even more efficient way to connect with each other.
But we’re not getting more jobs.
In the emerging economy, there’s no longer any correlation between the size of a customer base and the number of employees necessary to serve them. In fact, the combination of digital technologies with huge network effects is pushing the ratio of employees to customers to new lows (WhatsApp’s 55 employees are all its 450 million customers need).
Meanwhile, the ranks of postal workers, call-center operators, telephone installers, the people who lay and service miles of cable, and the millions of other communication workers, are dwindling — just as retail workers are succumbing to Amazon, office clerks and secretaries to Microsoft, and librarians and encyclopedia editors to Google.
Productivity keeps growing, as do corporate profits. But jobs and wages are not growing. Unless we figure out how to bring all of them back into line – or spread the gains more widely – our economy cannot generate enough demand to sustain itself, and our society cannot maintain enough cohesion to keep us together.
Add the intern nation problem we have, wherein companies use unpaid interns to do jobs that used to be entry level without ever hiring those interns as regular employees, to the problem of the correlation in customer base to the number of employees necessary to serve them and you have a very, very poor work environment out there for everybody from the high school kids looking to work fast food and finding adults are doing jobs teens used to do to the college kids who have to work half a dozen unpaid internships to try and get a paying job to the middle aged people who get downsized and can't find work ever again.
The jive we hear from Obama and Duncan, Gates and Bloomberg, Cuomo and King, that Common Core and education reform will solve the jobs problem in this country is, quite frankly, bullshit.
We don't have an education problem in this country.
We have a jobs and inequality problem.
A very small segment of the country takes more and more of the wealth and leaves the rest of us to fight it out for the crumbs.
Until that changes, we are going to continue to have a jobs and inequality problem in this country.
And once again, Common Core isn't going to change that.
If anything, the drudgery that is CCSS is meant to get kids ready for a life of drudgery in the 21st century workplace where they will work long hours and get paid little to do what few jobs remain.
As Sarah Littman noted in a blog post:
In the preface to the 1946 edition of Brave New World Huxley wrote, “a really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced because they love their servitude. To make them love it is the task assigned…to ministries of propaganda, newspaper editors, and school teachers”
That's what Common Core is meant to do these days, with the close reading of a story for seventeen days until the kids hate reading or the refusal to allow kids the background knowledge or context to know what they're reading about because the text itself is sacrosanct and answering text-based questions is all that we want kids to do after reading.
But the Common Core drudgery isn't for every kid.
That's why Obama's kids and Cuomo's kids and King's kids aren't learning Common Core in school.
They're not going to lead lives of drudgery - they're part of the political and economic elites in this country who still have a shot at the American Dream.
It's the rest of us who are screwed - unless we rise up and take back the opportunities that were stolen from us by the economic and political elites pushing globalization and technology as economic panaceas on us all.
One of the first battles in the fight is to put a stake through the heart of the Common Core State Standards and the education reform movement that pushes privatization and standardization for the unwashed masses in the public school system and going back to an education system that teaches kids a love of reading, learning and critical thinking.
That's what will keep kids from growing up to be the numbed-out drones Huxley wrote about in Brave New World.
Great post and it's so true. The majority of problems facing the citizens of the US are decently paid jobs and money. I wish people would wake up to the power of unions. Currently, I hope the UAW gets a re-vote in Tennessee over unionizing at VW. Looks like politicians used scare tactics to affect the vote.ReplyDelete
I read somewhere that this particular plant demographic skewed very white and FOX Newsie - there might be better places to try to unionize, where the employee demographic is more diverse and - perhaps - more open to unions.Delete
...the microchip killed labor...ReplyDelete
Outsourcing and globalization has as much to do with it too.Delete
...also...unrelated issue...notice how Mayor DeB. is getting trashed in the papers..by "the media"...come on...he's "speeding"...this is a non-issue..."the media" makes or breaks u....ReplyDelete
Non-issue is right - on the Twitter some of these so-called journalists are claiming the treatment of the press from the de Blasio administration is bad. As if it was good from the Bloomberg admin. They simply don't have the same FEAR for BdB that they had for MB. And that's because de Blasio can't buy their news outlet and fire their lazy ass if he gets pissed off enough - or hire the ones he likes and reward them with largesse (a la Andrew Kirtzman, Jonathan Alter, etc.)Delete
Good point, I want to ask Marcia Kramer where her journalistic bravado and "transparency" shouts were when Bloomberg's financial scandals and illegal third term were bestowed upon the city.ReplyDelete
You can bet she would've been fired and working for "News12 Yaphank" if she did that during his reign.
They never went after Bloomberg's tech boondoggles. CityTIme broke only because Juan Gonzalez broke it. But get ready for 4 years of this, then a Republican beating BdB and replacing him. That's what the powers that be want - unless, as someone notes below, BbB shows more deference to the corporatists. I suspect he may get the message soon...Delete
Or, he becomes the peoples' mayor. Corporate types won't be happy until he is another Cuomo. Why not actually be what they claim he is? Notice Farina's love of Common Core.Delete
Productivity (n): the process of getting fewer people to do more work for less money.ReplyDelete
Indeed. Helped out by Fed monetary policy as well.Delete
Hehe...no doubt...if she was allowed to work at all...Where was Marcia Kramer , etc. all when Bloomturd was illegally landing his helicopter over and over again in Manhattan...??? Compare that as being a non-story, except for a blurb-to taking Mayor over the coals for "speeding"? Mayor DeB...is looking at mucho difficulties ahead with this nitpicking shit...trying to get under his skin...like gnats...Unless he plays ball with TPTB of course...ReplyDelete
Marcia Kramer is one of the more despicable press people - nothing but a fevered ego in search of attention. But she has a platform and she is dangerous, that's for sure.Delete
...if he plays ball with TPTB...all will be well...but he will have lost his soul ...ReplyDelete
Yes - but that's what Zuckerman, Murdoch et al. want and they're using their "journalists" as the "medium" to get the message across.Delete
Reagan broke the back of labor in this country, most evident with the air controller's strike in 1981. He destroyed that union by firing all of the air controllers.ReplyDelete
He put in place the 7. something % of your gross taxable income health care expense deductible on taxes. Obama has raised it to 10% this year. Used to be all deductible prior to Reagan.
Reagan capped teacher expense deductible to $250. per year on taxes. Prior to that it was the entire expense incurred to purchase supplies, travel to further knowledge of your subject area, if relevant.
All of these changes add up to a DESTROY the middle class picture.
Obama has pushed us radically further along, so that all is left is to tap the last final nails in the coffin. Unless of course, we wake up and take our own radical action before the final cleaning of the floor with the middle class.
Great points all - Obama is Reagan incarnate, just with a (D) after his name. Remember, ole Barack did say Reagan was one of his favorite presidents.Delete
http://www.nydailynews.com/news/politics/mayor-de-blasio-blows-questions-alleged-traffic-violations-article-1.1674456. Look at this crap,from the DN...and was watching NY1 last night....they r,taking a complete BS non-issue...and degrading his early stewardship with it....this is outrageous...ReplyDelete
All the media outlets - just tweeted a whole bunch about it. Go to my twitter feed to see what I said, but the gist was, it's penny ante b.s. made to degrade BdB's mayorality. You can see it from the way many in the press talk about him on Twitter to. They have disdain for him.Delete
If you have not read this important piece, now is a good time toReplyDelete
check it out:
Perdido you are great. You and Michael Fiorillo are my heros.
The Brenner piece was very good, yes - really put the whole thing together.Delete
And thanks for the kind words! For a long time, I felt like I was shouting into the wind with my criticism of the ed deform agenda and the politics around it. But as people around the state and around the country have risen up in opposition, it makes it so much easier to fight. It's always nice to have people at the barricades with you! That's why it's great to have all the readers and commenters here at Perdido Street School!
Yup....and Ed. is...(almost was) just about the last "middle class" career left in the States...and they wont tolerate not getting a much larger piece of that pie...ReplyDelete
Nope - it's going away. Had lunch w/ a teacher friend the other day who told me he has some friends in their 30's w/ high pedigree degrees in biology and chemistry who have been let go from their positions here in the north and have been faced with either moving down south for a job (for a lot less money, of course) or scrambling up here for temporary contract work. One guy, my friend said, is now working as a carpenter.Delete
Yes, record profits...with people working for nothing...isn't that called slavery....?ReplyDelete
Slavery is the former provincial term. We now call it the new global economy especially in the united states where workers do not have the protections that they have in western europe. Just think, Apple, in France has to overide the American software used for scheduling because the French Apple techies have laws that prohibit a schedule that involves working late and having to be in early the next morning. In other words, the law provides for a specific number of hours away from work. Same thing for lunch and other breaks.ReplyDelete
FYI, a specific pill, taken once a week, costs $70. here, $47. in Canada, 8 euros in France and 4 euros in Spain. Same exact pill.
The American worker was screwed, is being screwed, and will, if they have a job, continue to be screwed unless we rise up.....
Right! I dont think we have the cahones to do this considering what happened with the occupy movement. I have eleven years left and fortunately I can leave and collect whatever is left of my stolen pension and overinflated TDAReplyDelete
شركة نقل عفش بالقصيمReplyDelete
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شركة نقل عفش بالرياض وجدة والدمام والخبر والجبيل اولقطيف والاحساء والرياض وجدة ومكة المدينة المنورة والخرج والطائف وخميس مشيط وبجدة افضل شركة نقل عفش بجدة نعرضها مجموعة الفا لنقل العفش بمكة والخرج والقصيم والطائف وتبوك وخميس مشيط ونجران وجيزان وبريدة والمدينة المنورة وينبع افضل شركات نقل الاثاث بالجبيل والطائف وخميس مشيط وبريدة وعنيزو وابها ونجران المدينة وينبع تبوك والقصيم الخرج حفر الباطن والظهرانReplyDelete
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