Technology Has Consequences

September 11, 2017

If this article is any indication, companies that can replace human workers with technology have a huge advantage over others; Recode reports, “Facebook Made $188,000 per Employee Last Quarter, Four Times as Much as Google.” As bad as that makes Google look in relation to their major competitor, the article has much broader implications. Writer Rani Molla tells us:

Silicon Valley companies are more efficient at making money than traditional industries, as evidenced by net income and revenue per employee in their latest quarterly filings. …

Facebook’s efficiency is partly because software products don’t require humans at as many steps of the production and distribution process as companies creating physical objects that need to be mass produced and delivered to stores or doorsteps. Of course, even jobs formerly assigned to humans are coming under the purview of robots — so more industries could see consolidation of labor. Companies like Amazon and its brick-and-mortar counterpart Walmart have employee counts that include part-time workers and are orders of magnitude bigger than their peers, which necessarily dilutes their profit and revenue per person. As far as tech companies, their contribution to the wider economy isn’t entirely clear. Productivity in the U.S. has been flat as we struggle to measure the economic output of internet technology, whose services are largely free.

Yes, we are in the midst of a major societal transition, and no one knows exactly where it will land us. If companies continue to replace humans with technology—and why wouldn’t they?—perhaps even those who have philosophical problems with a basic universal income will eventually view it as a necessary evil.

Oh, and about that four-fold advantage Facebook seems to hold over Google? Take it with this grain of salt: Facebook’s legion of contract workers is not reflected in their employee count. The Recode article reproduces the employee and revenue numbers for nine behemoth companies, from Facebook to Twitter, so see the write-up for those details.

Cynthia Murrell, September 11, 2017

 

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