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You should probably look at earnings not revenue to see how much more is left over for more wages.
by rileymat2 10y ago
You should probably look at earnings not revenue to see how much more is left over for more wages.
- beefman 10y agoThe software companies have 4x the margin (20% vs 5%). So you're right: whereas they presently employ the same number of people per $GDP as car companies, they could employ more. It seems the important thing about software here is that it hasn't been commodified yet. Once it has, margins will come down and it will be just like the car industry. In the meantime, whether it's widely believed to cause economic boom or malaise only depends on which side of 2011 we're believing from.
- nikdaheratik 10y agoI don't think you can necessarily say that. There is a reason why so many governments choose to subsidize auto manufacturing (and aircraft manufacturing) over other industries: there is an entire chain of highly skilled work that goes into making these products. And that chain is reflected in the revenue paid for the product, which is then passed through the chain as "costs" for the auto company and "revenue/profit" for everyone else.