Let’s talk about $10 a day childcare…
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Season Finale on Big Tech Earnings…
2021’s first season for Big Tech earnings has come to an end, and it was a blockbuster show. The quarterly results for Facebook, Amazon, Apple, Netflix, and Google (aka the FAANGs) were a blowout in sales estimates. The other big earners we’re looking at are Microsoft, whose report was pretty good despite disinterest from Wall Street, as well as Shopify
Shopify, long Canada’s Big Tech flex, smashed expectations with a total of $988.6 million in 2021 (that’s around double the amount from 2020) revenue thus far.
FAANGs Are Sinking Their Teeth In
Facebook had a strong quarter with their revenue reported at $23.67 billion. This was mainly from the social media platform’s success with advertising revenue. On the downside, Facebook’s monthly active user count was down compared to previous years, which isn’t surprising because who needs Facebook when you have Tik Tok?
Apple’s sales grew by 54% to $90 billion with profits more than doubling to $24 billion. This was an all-time high for the company because of high Macbook, iPhone, and iPad sales, and Apple’s second consecutive quarter with double-digit year-over-year growth rates.
Amazon beat their earnings estimate by more than 60% from $39.7 billion in 2020 to a whopping $67.2 billion in 2021. This one goes out to all you frenzied online shoppers.
Netflix’s share prices fell roughly 10% in this year’s quarterly earnings with 2.2 million fewer paid subscribers than anticipated. This might come as a surprise given how many people (like us) binge watched Netflix shows since the pandemic’s start, but the fall in earnings is due to increased competition as more streaming services pop up.
Google’s parent company, Alphabet, had strong numbers across the board: Youtube revenue grew nearly 50%, and advertising revenue was reported at $44.68 billion. Most notable was Google’s cloud services that brought in $4.05 billion, up from $2.8 billion this time last year. $2.8 billion to $4.05 billion.
What To Look For Next
Coming out of this season’s earnings, analysts are looking at how the biggest players are going to further e-commerce efforts, how this will increase revenue growth, and increase the competition amongst Big Tech, especially FAANG companies.
Big Money, Little mRNA
As many Canadians anxiously await their first jabs, the global market is already betting on booster shots. American health data company, IQVIA Holdings, released a report predicting $157 billion will be spent on COVID-19 vaccines between now and 2025. This accounts for 2% of the total $7 billion estimated to be spent on all vaccines in that time period.
Let’s see a quick breakdown:
- The European Union is negotiating with Pfizer to get 1.8 million doses within the next 3 years
- The United Kingdom has purchased 60 million boosters from Pfizer.
- Israel ordered 9 million Pfizer doses in preparation to provide boosters over the next 3 years.
The $157 billion figure takes into account Moderna’s commitment to produce 3 billion doses of their vaccine every year, research for vaccines to combat the new variants, and development of an immunization similar to the flu shot.
IQVIA predicts 70% of the world will be vaccinated by 2022 and booster shots will most likely be required every 2 years based on current efficacy data. World spending on Covid-19 vaccines will reach $54 billion this year and is expected to slowly decline as more people are vaccinated. The last time the world saw dollar figures like this was the push for new hepatitis C cures and the world spent $130 billion over 6 years.
What about Canada?
In December and January Canada spent $40 million on over one million doses, spending more per dose compared to other countries. What does the current federal budget look like as it relates to vaccines?
- $9 billion on procurement
- $3.4 billion for research and development
- $1.3 billion to administer vaccines
Federal Budget: What’s in it for the kids?
Budget 2021 included a big commitment to fund affordable childcare: $30 billion over five years. $10 per day childcare in five years time is a bold proposition when you consider the complex layers of coordination that need to take place between Ottawa and provincial governments.
But with 16,000 women dropping out of the labour force since the beginning of the pandemic due to a combination of factors (like over-representation in hard hit sectors and the burden of unpaid labour), affordable childcare could be critical to getting women back to work. Overall, it is estimated to grow GDP by 1.2% which is huge, given that GDP growth hovers around 2%. It helps (read: literally hurts) to be reminded of how expensive the median cost of childcare is across the country:
National affordable childcare will be modelled off of Quebec’s mostly successful program that raised the province’s GDP by 1.7%. At $8.50 a day, Quebec women with young children have the highest labour force participation in their cohort Canada. But the Quebec system is not perfect: waitlists are common, it’s a struggle to train and recruit skilled workers because the pay is low, and not all centres are accredited or offer the same quality of care. A national program must fairly compensate skilled workers to ensure students enroll in early childhood programs, anything less will doom the program.
It’s worth remembering that childcare is a provincial responsibility, and the national program calls for collaboration between levels of government. While many Premiers may agree that childcare may benefit their economies in the long run, short-termism and narrow partisan interest tend to dominate these conversations.
So, the next time the dude running your province (because with the exception of Caroline Cochrane in NWT, they’re all dudes) signals that childcare is a nice to have, remember that universal affordable childcare is an issue that goes beyond equity and women’s labour force participation, and is a key ingredient in a growth-driven agenda.
The solution presented is not without its flaws — it hinges on provinces stepping up, may not drive growth in the immediate term, and won’t get off the ground for many years — but props to Finance Minister Freeland for trying to make good on a long overdue promise.
Things we read and liked:
On the topic of COVID-19, Duke University estimates that the 92 poorest countries in the world will likely be unable to vaccinate 60 percent of their populations until 2023–or later (links via transportation newsletter Along For The Ride).
Are you an aspiring Black equity and inclusion consultant? Check out this mentorship program.
Btchcoin contributor Paisley Sim writes in Policy Options about why the Canadian paid sick leave system is broken — and how it can be fixed.
And finally, someone found JP Morgan Chase CEO Jamie Dimon’s secret Instagram account.
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