Apple's Austin campus gains approval with new salary requirements
The addition of minimum salary requirements was enough to sway members of Texas's Travis County Commission to approve Apple's new Austin campus, along with $5.4 million in tax rebates.
The project was given final approval by the commission on Tuesday in a 4-1 vote, according to the Statesman. A new provision was added to the deal last week, requiring an average salary of $35,000 for the bottom 10 percent of Apple-employed workers, and a minimum of $11 per hour for contractors.
The deal was characterized as "in peril" just last week, as the Travis County Commissioners Court remained undecided on its own incentives tied to the project. Previously, the Austin City Council had approved its own $8.6 million grant, while the state will pitch in $21 million in incentives from the Texas Enterprise Fund.
Apple's plans call for a campus to be built in North Austin, where 3,665 new jobs will be created by 2025. The discounts offered by the three different government agencies require Apple to build an 800,000-square-foot office for $226 million.
Local officials initially chose to be aggressive in courting Apple and offering incentives because the company was looking at other potential locations for the facility. It was said that Phoenix, Ariz., was another city Apple was considering.
Apple's plans call for the facility to be built on 38 acres of land in Austin with at least a million square feet of office space. The facility will function as Apple's new "Americas Operations Center."
An analysis conducted by Travis County has projected that Apple's project will generate $15 million in benefits for the county over the 15-year term of the contract.
The project was given final approval by the commission on Tuesday in a 4-1 vote, according to the Statesman. A new provision was added to the deal last week, requiring an average salary of $35,000 for the bottom 10 percent of Apple-employed workers, and a minimum of $11 per hour for contractors.
The deal was characterized as "in peril" just last week, as the Travis County Commissioners Court remained undecided on its own incentives tied to the project. Previously, the Austin City Council had approved its own $8.6 million grant, while the state will pitch in $21 million in incentives from the Texas Enterprise Fund.
Apple's plans call for a campus to be built in North Austin, where 3,665 new jobs will be created by 2025. The discounts offered by the three different government agencies require Apple to build an 800,000-square-foot office for $226 million.
Local officials initially chose to be aggressive in courting Apple and offering incentives because the company was looking at other potential locations for the facility. It was said that Phoenix, Ariz., was another city Apple was considering.
Apple's plans call for the facility to be built on 38 acres of land in Austin with at least a million square feet of office space. The facility will function as Apple's new "Americas Operations Center."
An analysis conducted by Travis County has projected that Apple's project will generate $15 million in benefits for the county over the 15-year term of the contract.
Comments
It's good that they added the salary requirements. Texas, as a whole, is an employers paradise. Nice to see someone coming down on the side of employees for once.
Competition sets the wage - that's the way it's supposed to work. When you have a group of clowns arbitrarily setting wages, nothing good will come from it. If Apple is no-competitive in wages and benefits, people will leave Apple and go to Samsung, IBM, Intel, Freescale, Texas Instruments, Schlumberger or a host of other competitors in the immediate area.
Apple, and just about anyone else, knows the salary range for a given job far better than some idiot who got into politics because he was too inept to compete in the free market system. Let the free market system work, it's worked well for centuries; it only gets screwed up with know-nothing politicians start screwing with it.
Quote:
Originally Posted by Hodar
I submit that this is NOT the job of the Austin City Counsil, this is usually nicely managed by something we like to call the "Free Market" system. I submit that the city councilmen can barely find their backsides with both hands, a map and a flashlight - to sum up the knowledge they possess in determining wages in a High Tech Industry can usually be found at the bottom of a typical birdcage.
Competition sets the wage - that's the way it's supposed to work. When you have a group of clowns arbitrarily setting wages, nothing good will come from it. If Apple is no-competitive in wages and benefits, people will leave Apple and go to Samsung, IBM, Intel, Freescale, Texas Instruments, Schlumberger or a host of other competitors in the immediate area.
Apple, and just about anyone else, knows the salary range for a given job far better than some idiot who got into politics because he was too inept to compete in the free market system. Let the free market system work, it's worked well for centuries; it only gets screwed up with know-nothing politicians start screwing with it.
Well said.
-kpluck
Quote:
Originally Posted by WelshDog
It's good that they added the salary requirements. Texas, as a whole, is an employers paradise. Nice to see someone coming down on the side of employees for once.
What is good for the company is usually pretty good for employees (as a whole), too. When a company is doing well, they hire people. Successful companies want to hire good people, so they also pay well. Companies that are not doing well will start cutting costs, often meaning downsizing or salary cuts. I'd rather be looking for work in a low-unemployment, lower-salary state like Texas than a high-unemployment, high-salary state like NY any day.
I'm not so sure. I agree with the idea of minimum wages. Otherwise business would be paying a large percentage of their staffs with a just barely livable wage. Competition is just part of it, and that only covers the more skilled portion of the staff, those who can shop themselves around.
Unfortunately, many workers don't have that luxury. In my two businesses, we had people from very skilled, and very expensive, to messengers who earned minimum wage. I know how it works.
And you live and work, where?
Quote:
Originally Posted by Hodar
I submit that this is NOT the job of the Austin City Counsil, this is usually nicely managed by something we like to call the "Free Market" system. I submit that the city councilmen can barely find their backsides with both hands, a map and a flashlight - to sum up the knowledge they possess in determining wages in a High Tech Industry can usually be found at the bottom of a typical birdcage.
Competition sets the wage - that's the way it's supposed to work. When you have a group of clowns arbitrarily setting wages, nothing good will come from it. If Apple is no-competitive in wages and benefits, people will leave Apple and go to Samsung, IBM, Intel, Freescale, Texas Instruments, Schlumberger or a host of other competitors in the immediate area.
Apple, and just about anyone else, knows the salary range for a given job far better than some idiot who got into politics because he was too inept to compete in the free market system. Let the free market system work, it's worked well for centuries; it only gets screwed up with know-nothing politicians start screwing with it.
Congratulations on making some breathtakingly broad generalizations about people you have never met.
Quote:
Originally Posted by melgross
I'm not so sure. I agree with the idea of minimum wages. Otherwise business would be paying a large percentage of their staffs with a just barely livable wage. Competition is just part of it, and that only covers the more skilled portion of the staff, those who can shop themselves around.
Unfortunately, many workers don't have that luxury. In my two businesses, we had people from very skilled, and very expensive, to messengers who earned minimum wage. I know how it works.
Minimum wage is one thing. Requiring an average salary of $35,000 for the lowest paid 10% is another thing entirely.
What will happen? Well, Apple will undoubtedly outsource all the low paid jobs. Janitors, receptionists, grounds maintenance employees, etc will all be subcontracted - which means that they may not get any of Apple's benefits - which are typically generous.
The city should stay out of it.
Quote:
Originally Posted by Hodar
I submit that this is NOT the job of the Austin City Counsil, this is usually nicely managed by something we like to call the "Free Market" system. I submit that the city councilmen can barely find their backsides with both hands, a map and a flashlight - to sum up the knowledge they possess in determining wages in a High Tech Industry can usually be found at the bottom of a typical birdcage.
Competition sets the wage - that's the way it's supposed to work. When you have a group of clowns arbitrarily setting wages, nothing good will come from it. If Apple is no-competitive in wages and benefits, people will leave Apple and go to Samsung, IBM, Intel, Freescale, Texas Instruments, Schlumberger or a host of other competitors in the immediate area.
Apple, and just about anyone else, knows the salary range for a given job far better than some idiot who got into politics because he was too inept to compete in the free market system. Let the free market system work, it's worked well for centuries; it only gets screwed up with know-nothing politicians start screwing with it.
I never thought I would say this but...
In this case I have do not have a problem with one of the local governments requiring this. Why? Apple is getting a taxpayer funded incentive to build this. Don't like the strings attached? Don't build it then.
Personally, I think states would do better with a low and consistent tax rate. I think to many times local and state governments go to far to seal the deal and end up giving away far more then they can recoup from landing that big name factory/office/whatever/
Quote:
Originally Posted by melgross
I'm not so sure. I agree with the idea of minimum wages. Otherwise business would be paying a large percentage of their staffs with a just barely livable wage. Competition is just part of it, and that only covers the more skilled portion of the staff, those who can shop themselves around.
Unfortunately, many workers don't have that luxury. In my two businesses, we had people from very skilled, and very expensive, to messengers who earned minimum wage. I know how it works.
Well I guess most of the janitors and maintenance staff will be contractors @ $11/hr. rather than employees at +/- $17.50/hr ($35,000/yr) although I'm not sure how the contractor title really works since most contractors pay their workers according to state or federal minimum wage laws. For example, if Apple contracts out the janitorial services does that mean that the contractor must pay their workers $11 per hour only when they work at the Apple facility but can pay them the state minimum wage when they are working across the street at Texas Instruments?
From a simplistic view of a free market you are correct, but the model has plenty of caveats. The situation in Austin has Apple asking for a reduction in taxes (a discount) with Austin asking for something in return. Quid pro quo. This is a good thing and is the free market working.
Quote:
Originally Posted by jragosta
Minimum wage is one thing. Requiring an average salary of $35,000 for the lowest paid 10% is another thing entirely.
What will happen? Well, Apple will undoubtedly outsource all the low paid jobs. Janitors, receptionists, grounds maintenance employees, etc will all be subcontracted - which means that they may not get any of Apple's benefits - which are typically generous.
The city should stay out of it.
Yes, it seems like Austin would prefer most people would be on government benefits (those who earn less than $35k) and just lie on their back making babies. Only the rich nerds need to actually work. Austin will prevent others from being employed. Sounds odd.
Quote:
Originally Posted by melgross
Otherwise business would be paying a large percentage of their staffs with a just barely livable wage.
Why would you assume this? I'll venture a bet that most employers are actually paying higher than the state-mandated minimum wage in most cases already. But even if they were paying exactly the minimum it doesn't necessarily follow that they would all be lowered absent the mandate. Furthermore, the minimum wage can (and should) be interpreted as saying that anyone whose currently marginal labor productivity is less than $X (whatever X is) is now allowed to work.
Quote:
Originally Posted by melgross
Competition is just part of it, and that only covers the more skilled portion of the staff, those who can shop themselves around.
Untrue. The competitive dynamics are certainly different at different wage rates, but they are non entirely absent. Its simply a fact that there are often more potential employees competing for fewer jobs at the lower end of the skill, experience and wage scale. But no law is going to alter this circumstance of supply and demand...it's only going to have (usually) negative unintended consequences like basically making people with very low marginal productivity completely unemployed (rather then employed at low wage to begin with).
Quote:
Originally Posted by melgross
In my two businesses, we had people from very skilled, and very expensive, to messengers who earned minimum wage. I know how it works.
Perhaps, but you seem to lack a deeper understanding of the basic economics that is at work here. The simple fact is that mandatory minimum wages (set above the market clearing price), while well intended, have the unfortunate effect of making people with low experience, skills and productivity legally unemployable. In other words they tend to have the opposite effect of the stated intentions.
As an employer you ought to be able to realize this by simply asking yourself what happens when the cost of an employee rises (no matter what level...no matter what causes that rise in cost...e.g., wages, benefits, time off, mandatory or market-drive, etc.)
What happens? Do you hire more people? Fewer? Lay anyone off? Put off or reduce planned hiring? Look for ways to get more productivity out of those now more expensive employees (thus reducing the need for additional ones)? Take less profit? Raise prices? Some combindation of all these?
Quote:
Originally Posted by SolipsismX
From a simplistic view of a free market you are correct, but the model has plenty of caveats. The situation in Austin has Apple asking for a reduction in taxes (a discount) with Austin asking for something in return. Quid pro quo. This is a good thing and is the free market working.
Of course it is not the free market working.
Quote:
Originally Posted by bigdaddyp
I never thought I would say this but...
In this case I have do not have a problem with one of the local governments requiring this. Why? Apple is getting a taxpayer funded incentive to build this. Don't like the strings attached? Don't build it then.
Yes, but this is effectively corporatism (a.k.a. economic fascism or corporate socialism) on display.
Quote:
Originally Posted by bigdaddyp
Personally, I think states would do better with a low and consistent tax rate. I think to many times local and state governments go to far to seal the deal and end up giving away far more then they can recoup from landing that big name factory/office/whatever/
Agreed. This is the better approach. No special deals for big companies. Just lower everyone's taxes.
While his generalizations may be overly broad they do highlight real problems with industries and communities in America in general. Companies coming into a community demanding "incentives" or otherwise extorting concessions from local governments open themselves up to these sorts of requirements. It is a very dirty stituation for all involved.
However this poster and others are correct in that this screws with the concept of free markets. It also puts local established businesses in bad shape as you now have to deal with artificially high wages. Generally these sorts of agreements have a negative impact on the community as a whole. The cost of housing, food and the like go up while the bulk of the wages in the community do not. We shall see how Austin benefits from this 10 years from now.
Idiot Texans and Austinites providing corporate welfare for Apple, nothing more than theft from We The People!!!!
When big government and big business get together to screw the people, that is called FASCISM!
Quote:
Originally Posted by SolipsismX
From a simplistic view of a free market you are correct, but the model has plenty of caveats. The situation in Austin has Apple asking for a reduction in taxes (a discount) with Austin asking for something in return. Quid pro quo. This is a good thing and is the free market working.
Next week we will read that Apple Inc. has contracted Apple, Netherlands who subcontracted Apple, Ireland who will be the official employer at the Austin facility.
Quote:
Originally Posted by MJ1970
Of course it is not the free market working.
Of course it is.
Apple's free to build in Austin, Phoenix, or anywhere else it can convince the local governments to screw over the taxpayers.