Apple CEO Tim Cook's decision to invest $100 million to bring the manufacture of some Mac computers back to the United States is a welcome development for the U.S. economy. But it wasn't the most interesting thing Cook said.
What jumped out for us was his reasoning:
"I don't think we have a responsibility to create a certain kind of job," Cook told Bloomberg Businessweek. "But I think we do have a responsibility to create jobs."
Wow. When was the last time you heard a corporate CEO say that?
Executives talk about their obligation to create profits for shareholders, which of course is very real. And though plenty of CEOs and companies do a lot of great things for this country, they seldom say job creation is, in itself, one of their goals. It's incidental to that top priority of making money.
The relentless focus on profits, particularly since the recession, has led to wage cuts, offshoring and layoffs. As a result, corporate profits surged to 11.1 percent of gross domestic product in the third quarter this year, the highest level on record -- but wages fell to 43.5 percent of GDP, a record low. U.S. income inequality is among the highest in the industrialized world.
There are myriad reasons for the slow economic recovery, but the reduced buying power of the middle class is a big one. And it's hard to envision a prosperous future if the trend continues, with fewer and fewer Americans able to buy what our companies
Usually what we hear from the business world is: "That's just the way the market works." So Cook's perspective was refreshing. But it can also be the basis for a credible business plan that other corporate chiefs might consider.
A thriving company needs customers, and lots of them, as Henry Ford recognized a century ago when he decided to pay his workers a decent wage.
A billionaire is only going to buy one iPad. OK, maybe four or five. But 1,000 workers making a decent wage might buy hundreds of them.
Of course companies can't go into the red to increase hiring. We're not talking about the many businesses, especially small ones, operating on thin margins and struggling to survive. But many other companies are sitting on piles of cash. And as Bay Area News Group columnist Mike Cassidy has reported, developments in automation and rising overseas wages are making manufacturing here a more attractive option.
Given those trends, couldn't more corporations invest in creating jobs here? Wouldn't it be good for all businesses to restore that reliable stream of American consumers?
Of course there are things Washington can do to create incentives for this, such as changing tax policies and immigration rules. But Ford helped create the American middle class with this idea.
We are glad to see Apple actively employ the sentiment behind its old "Think Different" advertising campaign. By doing so, it and other U.S. companies can be part of reviving a thriving American middle class.