

Cloud centers bring high-tech flash but not many jobs - chaosmachine
http://www.washingtonpost.com/business/economy/cloud-centers-bring-high-tech-flash-but-not-many-jobs-to-beaten-down-towns/2011/11/08/gIQAccTQtN_print.html

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AlexMuir
I've just written an article (waiting for publication) lamenting the same
thing from almost the exact opposite angle: Lots of jobs, no money.

Here in Scotland, the government has just given £10.6m in 'support' to Amazon
to encourage them to open a distribution centre (actually they already had
two, but anyway...) The Scottish government is trumpeting this as a
recognition of Scotland's "highly skilled workforce". Actually it's 750 jobs
(gov't estimate) mostly on 1% above the legal minimum wage, with no real
prospects.

And to cap it all, Amazon don't even pay tax in the UK. All their sales go
through a Luxembourg company. So it seems ridiculous that the taxpayer is
subsidising the operations of a highly profitable, tax-avoiding company.
Effectively we're buying jobs.

Meanwhile, Borders is bankrupt (loss of 1,200 jobs), and other booksellers
(Waterstones paid £2m in corporation tax last year) are struggling.

Relating it back to this post - highly skilled work requires less people. Low
skilled work requires less people AND pays less money. But it's progress, and
I fear it's simply an economic reality. I don't know what the solution is.

Note: I don't want to litter this post with climbdowns, moderations etc. I'm
not disparaging Amazon jobs, and 750 people working instead of unemployed is
good. But we can't win in a race to the lowest paid unskilled labour. And
Amazon's labour can't even be offshored anyway, so who are we bidding against?

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notatoad
"not many jobs"? in a town of 3400 people, the new datacenter is expected to
create 50 direct jobs and 150 contracting/maintenance positions. if we say the
workforce comprises half the population, that means 10% of the jobs in town
will be datacenter related. that sounds pretty good to me.

apple isn't going to magically turn your town from podunk, nowhere into some
big metropolis.

~~~
ebiester
Yes, but it's very likely the 50 direct jobs will be handled by people mostly
brought in by Apple and some won't even live in the town.

~~~
sjs
They contracted someone to build the thing in the first place. Whoever is
there for the data centre will be renting or buying a place to live, or at
least staying at hotels, shopping for food and going to restaurants.

It may not solve all of the town's problems but it probably does not do any
harm either.

~~~
AlexMuir
You're right. But the problem is bigger than this. It's that the data centre
eliminates a far greater number of jobs than it creates. Somewhere else in the
US, there's a CD pressing factory which has just closed its doors with 150
jobs lost. And 10 retailers who sold those CDs. And the company that printed
Road Atlases. It's an inevitability, but one that is overlooked by saying,
"Well it's progress, we're creating skilled jobs in the businesses that are
doing the displacing. Let's retool our workforce."

~~~
ianhawes
If a data center produces only 50 jobs, then I find it hard to believe that a
CD pressing shop produced 150 jobs.

~~~
mbreese
The Sony CD plant in Terre Haute, IN employs ~ 1,400 [1]. I know they have
other plants, but I think that is it for the Eastern US. And, it's pretty much
the only company in the country that produces physical media, so other CD
pressing plants are pretty rare.

[1]
[http://www.indianaeconomicdigest.net/main.asp?SectionID=31&#...</a><p>Edit:
According to <a href="http://www.sonydadc.com/en/locations/"
rel="nofollow">http://www.sonydadc.com/en/locations/</a>, the only production
facility in the US is in Terre Haute...

------
motters
This is very much in agreement with my observations about technological
unemployment in the US.

[http://sluggish.homelinux.net/wiki/Employment_and_Productivi...](http://sluggish.homelinux.net/wiki/Employment_and_Productivity_Trends_in_the_US_Economy)

Jobs in software related industries have been stagnant or in decline in the US
for the last decade, and traditional narratives about the ability of workers
from older industries to upgrade their skills and become "knowledge workers"
seem to no longer be true.

~~~
marshallp
According to the bureau of labor statistics jobs in software industries are
set to massively increase, so who's right

~~~
rndmize
I'm not sure I'd trust the BLS projections very far. According to this
article,
[http://www.slate.com/articles/technology/robot_invasion/2011...](http://www.slate.com/articles/technology/robot_invasion/2011/09/will_robots_steal_your_job_2.html)
the BLS projects a sizable increase in pharmacy work, but automation may end
up flipping that on its head.

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spitfire
Technology is about making things easier. Computers, in particular, are about
automation. We're finally starting to figure out this automation thing in
operations. Cool.

If you're not figuring out how to make you redundant the guy beside you, then
the guy beside you is trying to figure out how to make you redundant.

------
balloot
It is incredibly short sighted to say that the sum of the jobs created by a
data center is the people reporting to work in the building. This data center
likely created hundreds, if not thousands of jobs. It's just that most of them
aren't in hicksville, NC.

There are hardware engineers designing the facility, software engineers
maintaining the software infrastructure, product managers scheming of ways to
use Apple's cloud facilities, etc.

~~~
msbarnett
> This data center likely created hundreds, if not thousands of jobs. It's
> just that most of them aren't in hicksville, NC.

Well, yes. But it's worth taking note of the point that Governments
subsidizing the creation of data centers in places like hicksville, NC with
the idea that the jobs they create will become a huge boon to the local
hicksville economy is fundamentally mistaken.

Aside from a skeleton staff to main the facility, most of the work is, as you
say, create for people who will never need to set foot in North Carolina. The
local jobs aren't bad for Hicksville, but they don't justify the huge
subsidies, and they aren't going to ever save hicksville from economic
irrelevancy.

~~~
yummyfajitas
According to the article, the government didn't subsidize Apple.

 _Town Manager William “Todd” Herms said Apple’s presence boosts the town’s
tax base and helps it lower overall taxes..._

Apple benefits from reduced taxes, and the town gets 50% of something rather
than 100% of nothing.

~~~
hackinthebochs
That quote seems more like political-speak than actual hard numbers. The
article also said that the state government gave Apple $46 million in tax
breaks, while local government cut their property taxes by 50 percent and
personal taxes by 85 percent. I'm hard-pressed to see how the taxpayers aren't
subsidizing this datacenter.

~~~
tlear
They gave Apple those breaks to get them to build the facility there. No
breaks 0 revenue, breaks some other > 0 revenue.

~~~
msbarnett
Money is fungible; tax breaks are no different in function than charging the
full tax rate but handing Apple a pile of cash equivalent to what they'd have
saved with the tax break.

It's a subsidy. The argument that they made more with the subsidy than they
would have without it is separate from the idea that tax breaks don't amount
to a subsidy (which was yummyfajitas assertion).

------
wavephorm
I keep seeing new articles in this type of tone. Like they know what's wrong
but are afraid to say what they want for fear it won't be published. What this
article is describing is capitalism working effectively, maybe too effictively
to be sustainable. Capitalsim is all about using technology to produce profits
more efficiently. By building a data center in a small town Apple is
efficiently using its techology to produce profits. This isn't something to be
complaining to Apple for doing.

Technology's effictiveness is outstripping captialisms mechanism for job
creation. The unemployment problem probably cannot be fixed without drastic
socio-economic reform.

~~~
jessedhillon
This.

Every time I see articles like this -- pointing out how large full-time admin
and operations teams are now replaced with smaller teams and easy-to-manage
infrastructure -- I wonder if something similar will happen to software
engineering.

In fact, I am sure that something like this _must_ eventually happen to
engineering. The cost involved in designing and developing new services will
be reduced to only that which is essential. I just dont know what form it will
take.

Will newer, easy-to-use libraries reduce the work of five engineers to one?
Will basic application development knowledge become so ubiquitous that
engineers are only needed for the harder, more obscure challenges? Will all of
engineering be reduced to only the most creative work, with all the logic and
plumbing provided automagically by intelligent programming environments?

Probably all of the above. What's a dev to do?

~~~
balloot
Yes, we all yearn for the days when cloud computing data centers were run by
thousands and thousands of operations engineers. Sadly, those times are no
longer here - mostly because they're a figment of your imagination.

But don't let that stop you from assuming for no good reason that the software
industry is about to die. People have been making that assumption for 10 years
or so now, so you have plenty of good company.

~~~
jessedhillon
<http://en.m.wikipedia.org/wiki/Straw_man>

I didn't say that a single data center employed thousands of engineers, or
that the software industry is dying. But don't let that stop you from having
an imaginary argument.

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georgieporgie
Around here in Oregon, I've seen a fair amount of similar stuff over a few
decades. A big company moves into the area. Everyone is thrilled to be
building the new facilities. Then, a few locals are hired, a few skilled
employees are brought in from their other areas, and everyone else is left
scratching their heads.

After a few years, the municipal tax break comes to an end. The big company
needs new technology anyway, so it's cheaper just to build a new facility in a
new town with new tax breaks, than it is to upgrade the existing one.

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10100101001
Instead of subsidising jobs, subsidise education.

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10100101001
Create your own job, instead of relying on someone else. Isn't that the idea
of a startup?

~~~
marshallp
What if your startup doesn't make any money

~~~
10100101001
Not sure. My startup does not have that problem.

