The Spectre of Math

February 27, 2014

Numbers

Filed under: Economics,Politics — jlebl @ 12:43 am

When reading news, one should do some quick calculations to test for ridiculousness.  It really makes reading news far funnier.  Let us look at the 19 billion dollar deal where Facebook bought WhatsApp.  It is especially hilarious if we interpret this as how much do we as a society value WhatsApp versus some other things.  These are based on just quick googling, but they are for just eyeballing the thing, not to be taken exactly.

1) Minimum wage hike.  There are about 3.6 million people at or below mimimum wage [1] (2012 data).  If we suppose that they would work 250 days a year for 8 hours a day, the current $2.85 proposed hike ($10.10-$7.25) would amount to 2.85 \times 8 \times 250 \times 3,600,000 = 20,520,000,000.   So about the same.  Facebook could have paid everyone on minimum wage the hike for a year.  But of course I’ve overestimated I doubt everyone on minimum wage works 8 hours a day 5 days a week.

2) NASA budget is about 16 billion in 2013 [2].  So WhatsApp is actually worth more than all that NASA does in a year.

3) Nominal GDP [3].  Czech Republic is about $196 billion.  Ten WhatsApps is the GDP of the whole country of 10 million people (where WhatsApp has 55 employees, so 10 of them have 550 employees).  Jamaica has nominal GDP of $13 billion or so.  WhatsApp is way more than that.  OK, you say, that’s just one year.  Suppose that WhatsApp (what it does) works out to working for 5 years before it becomes obsolete.  That’s 3.8 billion per year.  The GDP of Cayman Islands is $3.3 billion.  And that’s where Facebook is taking its profits to avoid paying taxes [4].

4) The University of California budget for 2013-2014 is $6.2 billion [5].  WhatsApp would fund the UC for 3 years.  WhatsApp apparently produces so much good for our society that it equals about the output of the entire UC system for 3 years.

[1] http://www.bls.gov/cps/minwage2012.htm

[2] http://www.nasa.gov/sites/default/files/files/FY_2013NASA_OperatingPlanEnclosure1_13SEP2013.pdf

[3] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

[4] http://www.theguardian.com/technology/2013/dec/05/facebook-tax-cayman

[5] http://regents.universityofcalifornia.edu/regmeet/nov12/f1attach3.pdf

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