Juan Hernandez, a welder, started working at SpaceX in 2015 at an hourly wage of $28. Rather than seeking a higher salary, he concentrated on acquiring stock. On the day the company went public, those shares held a value of around $880,000.
He’s not alone; over 4,000 current and former SpaceX employees became millionaires when the company debuted on the Nasdaq, trading at $135 per share. SpaceX’s valuation soared to $1.77 trillion, positioning it as the seventh-largest publicly traded company, even surpassing Tesla. This IPO marks the largest in history. Roughly 400 employees now boast stock worth over $100 million, including some cafeteria staff who serve soup.
It’s a curious contrast. Historically, employees making significant earnings in the stock market were typically in coding or marketing roles, but this time, it’s welders and machinists benefiting from the boom.
SpaceX allocated stock to its welders and line workers, many of whom were on below-average pay. Reflecting back ten years, when SpaceX was still in its nascent stage, such a strategy seemed risky; now, their wealth is soaring.
Oddly enough, Brownsville, where SpaceX is located, regularly ranks low on economic charts in Texas, yet SpaceX has transformed local work earnings. In fact, home prices in Cameron County have more than doubled since the arrival of the rockets, climbing from about $131,000 in 2014 to over $281,000 now.
Critics call it unaffordable, yet their complaints often fail to clarify who is actually buying the homes. The new wealth tends to benefit those who were already residents before SpaceX moved in. When the value of real estate in a struggling area increases due to job salaries, residents typically hold onto their properties. In places where income remains stagnant, climbing prices can create issues. Brownsville has witnessed a rapid increase in wealth.
Automation Concerns
There’s also anxiety about machines taking over jobs. Automation was once a blue-collar issue, but it’s now creeping into white-collar roles. While AI can handle tasks like drafting documents or passing exams, it still can’t perform delicate physical tasks like wiring or sealing a fuel tank. The first jobs likely to go will be sedentary roles. Meanwhile, skilled trades as plumbers will still see demand.
A recent humanoid robot even completed a half-marathon faster than any human, but it required human support in earlier races. While robots can run, they still can’t manage tasks needing fine motor skills or critical thinking. There’s still a distinct space for trades, especially with a recovery in manufacturing on the horizon.
It’s perhaps worth noting that those considering coding bootcamps or welding schools may want to look at the success stories coming out of Brownsville.
Elon Musk’s Rise
Elon Musk stands to become the world’s first trillionaire from this IPO. His growing fortune sparks conversations about wealth inequality, with figures like Bernie Sanders labeling the accumulation of such wealth as morally questionable.
Critics often focus on Musk, missing the bigger narrative about how he achieved his success. Many fortunes begin with legacies or inherited wealth, but Musk’s is distinctively rooted in innovation and technology. He’s pursued factory innovation vigorously, often working long hours and sleeping in his factories, a point overlooked by detractors.
There’s also potential for others to benefit from a stock pay structure, even if cash remains a simpler option. Yet while some suggest distancing themselves from perceived exploitation, it’s important to differentiate between wealth generated through resource extraction versus that from innovation and production. Musk embodies the spirit of a visionary, reimagining industries while navigating capitalism’s complexities.
