“Instead, willing and able workers can’t find jobs because employers can’t sell enough to justify hiring them. And the solution is to find some way to increase overall spending so that the nation can get back to work.”
Krugman added that “over time, there will be more equipment that needs replacing, more iPhone-like innovations that boost spending, and, in the long run, we will exit this economic trap.”
Even before the iPhone 5, Apple cited a study showing it has created or supported more than 500,000 US jobs, including 47,000 at Apple alone and 200,000 in the so-called “app economy.”
Apple’s launch comes amid a spate of new product releases expected to woo US consumers in the pre-holiday season.
The Consumer Electronics Association projects record sales of electronics of $206 billion this year, the first time above the $200 billion mark.
Along with phone launches, Microsoft is producing its own Surface tablet computer, Google has introduced a tablet and smartphone and Amazon has upgraded its Kindle Fire tablets.
And Apple is expected to launch a “mini iPad” in the coming weeks to cement its position in the tablet market.
All this has the potential to boost share prices, consumer spending and the so-called supply chain involving component makers. Apple’s record stock price surge has helped push the Nasdaq stock exchange to its highest level since 2000, after the dotcom collapse.
Morgan Stanley analyst Katy Huberty said Apple may ship between 48 million and 53 million iPhones in the fourth quarter and “up to 266 million” in 2013.
Contrary to popular belief, the largest portion of the proceeds from iPhone sales flow to the United States, not China, said Jason Dedrick, professor of information studies at Syracuse University.
“Virtually none of the profits go to China,” he added.
Apple is expected to launch a “mini iPad” in the coming weeks to cement its position in the tablet market.
A 2011 study by Dedrick with researchers Kenneth Kraemer and Greg Linden concluded that 58 percent of the iPhone cost went to Apple profits, with materials representing some 22 percent and labor costs in China just 1.8 percent.
“We estimated about $10 in wages for each iPhone going to workers in China for the iPhone or iPad,” he said.
Even with the stimulus, most economists say the iPhone and other devices probably won’t make a difference in the November election.
Leahey said the introduction is too late to have an impact on jobs before November, and that more important is “the public perception of the labor market,” which is unlikely to change in the next two months.
