Unless we want to turn a small part of America into a third-world country by suspending worker's rights, environmental protections and safety regulations, I don't think we could compete with these Asian countries.
I also don't think we should.
These jobs, well, suck. They are semi-skilled and are doomed to inevitable automation. The people who work these jobs are treated as chattel right now. When these people rise up and demand to be treated better forcing costs to rise, these jobs will move again to some other desperate country.
If the first world wants to compete better, start certifying products as (human & environment) cruelty free. Label how many children were used to produce the product. Label how many years of life were robbed from people by working on the product because of chemicals. Stick an import tax on any place employing children or harming the global environment. Because straight nationalism isn't going to cut it.
From another article: The total component cost of an iPhone in 2009 was $172.46. Workers in China assemble the iPhone, but because their wages are low the assembly cost per phone (labeled manufacturing costs in the table below) is quite small, only $6.50 a phone. The total production cost per phone is $178.96: http://thesocietypages.org/socimages/2011/12/29/the-innovati...
>"If iPhones were assembled in the US the total assembly cost would rise to US$68 and total manufacturing cost would be pushed to approximately US$240. Selling iPhones assembled by US workers at US$500 per unit would still leave a 50% profit margin for Apple": http://business.time.com/2011/01/11/is-the-iphone-bad-for-th...
However, I think it's fair to conclude: Slicing the iPhone in this way, we can see that the real value of the iPhone isn’t in the manufacturing process at all, but lies in its design and the development of its components. And by owning the technology and design, the U.S. also gains in global trade, even though the iPhone isn’t manufactured in America: http://business.time.com/2011/01/11/is-the-iphone-bad-for-th...
$6.50 of manual labor in China translates into $68 worth of labor in US only if you forget about automation. At American wage levels a whole set of production steps could be more profitably done by robots.
I think it's fair to include in our assessment how much these people would be suffering if these jobs weren't available. People take these jobs because they're the best thing available. They definitely suck when compared to our sit-in-a-chair-programming-all-day jobs, but would they even be able to afford to live without them?
The solution is probably for these places to voluntarily start providing better working conditions and pay, which is unlikely to happen. However, I can't say with certainty that taking those jobs away from them and bringing them back here is going to provide a net gain for those people.
You're so timid. The solution is obvious. Take wealth from the privileged superrich and use it to educate the poor.
And I mean actual education, like khans academy, not fake education, like American public schools (politically correct obedience training)
When 1% of the population hordes 50% of the wealth through nepotism, cronyism, monopolies, oligopolies, and bribing politicians, the solution to poverty is obvious. Guillotines.
The markets can't be free when bribery, nepotism, cronyism, monopoly and oligopoly dominate them. Free the markets from the cartels of privilege.
The French revolution was ultimately a huge success that robbed countless monarchies of their power.
Instead of requiring teachers to slave away on wall street before they teach, we should just pay them for every pupil who goes to them.
Let's organize society based on simple scientific observations instead of having faith in the superrich masters of the world. Your faith in the superrich reminds me of an evangelical Christian having faith in their god regardless of how bankrupt that god has shown himself to be.
It's time society arranged itself according to the wisdom of the scientists instead of the authoritarian superrich and their evangelical slaves.
Social science is based on statistics and philosophy. You betray your ignorance.
Right now you are entrusting your future to Rupert Murdoch and the Chinese Communist Party. They are the actors who will most shape your collective future.
Scientists are a much better option. Rule by experts - meritocracy - is the only way to save this dying economy.
>Social science is based on statistics and philosophy. You betray your ignorance.
Or you do. From what I can tell social scientists are scientists in the same way Christian Scientists are scientists. They start with the answer and work backwards.
>Scientists are a much better option. Rule by experts - meritocracy - is the only way to save this dying economy.
First of all, command economies, which is what you're talking about whether or not you want to admit it, have left a string of wreckage and bodies. Economics by science is exactly what the communists thought they were doing. Thanks all the same, but I'll pass.
And secondly, the economy is not "dying". It's trying to do what market economies do if you leave them alone - adjust to new circumstances and start growing again. The last think we need to do is have people start making decisions from the top.
Maybe we actually can implement meritocracy without a command hierarchy. It's a problem of technological limitation, that might be theoretically solvable.
You're an ignorant uneducated anti-intellectual with strong opinions on stuff you have no experience with and have spent no time investigating.
You repeat the slave morality taught to Evangelical Christians by the Goldman Sachs psychopaths to whom you bow down.
The economic system is entering a period of peak instability to be followed by transformation. You'll hear about after it has completed, at the same time American Idol fans become aware. Such is the fate of the anti-intellectual who shuns knowledge and education. So be it.
I'd rather that we, as a nation, consult with experts (for example, social scientists and really good educators), come up with a ten year plan, and execute on that plan consistently. If the plan works, great, if not, tune it and execute another iteration. Sort of like glacial-paced Agile for governments. Instead, what we have now is mostly a bunch of "common sense" stuff that really means status quo, which gets disrupted every single time a politician comes into office, anywhere.
> I'd rather that we, as a nation, consult with experts (for example, social scientists and really good educators), come up with a ten year plan, and execute on that plan consistently.
Good for you, but what's actually likely to happen?
I note that the department of education can do those things today, or 20 years ago, but didn't. What makes you think that this time will be different?
The Deptartment of Education is controlled by the power elite and by the masses who elected stupid represetatives.
The issue is democracy - better called dumbocracy. Rule by the dumb.
In a democracy, the government at best can be as good as the lowest common denominator.
The next step from democracy is meritocracy. People with demonstrated intellectual and proven-track-record merit should be allowed to vote in their field of expertise.
So if Khan and John Taylor Gatto have demonstrated that they are better educators than the DOE, then they have more voting power. The principle of meritocracy is that more votes should go to those with demonstrated merit.
Right now the government is controlled by a combination of stupid people voting for emotional gratification and the power elite manipulating the stupid people for personal profit.
Take away voting rights from those with no merit and give the rights to those with demonstrated merit.
The education system is a tremendous challenge and the first step is to STOP listening to the idiots who have failed, and start listening to the people who have succeeded. Since idiots never know they are idiots, we must forcibly remove their power by removing their ability to vote and certainly by barring them from ever being elected.
Instead of fatalistic laissez-faire capitalism that inevitably leads to a new aristocracy, let's work on creating a functioning meritocracy where those with logic and scientifically demonstrated merit are given the power. In particular, their votes should have greater weight.
Don't let the dumb drive DoE policy. Instead let all university educated people vote on DoE leadership after taking a basic exam proving their knowledge.
When we recognize that the Christian fascists (for instance) are pushing an illegitimate social model - fascism - it becomes a moral imperative for us to disempower them. The rational way to do this is by highlighting their lack of merit and highlighting the merit of the educated, intelligent, rational people.
I'm not saying it's a simple solution but good solutions are not simple. A good solution takes work and is going to be messy. But what other option is there? Let the country slip into corporate feudalism? The dumbocracy must end and be replaced by some form of meritocracy.
I tried to upvote you out of the gray because your comment is interesting. There is just one problem with deliberately giving some people more power than others: those whose power is taken will try to use the same arguments used by those doing the taking. Examples: "We know what's best for our children!" "Those idiot evolutionists are trying to force their beliefs on those of us who know better!" etc.
"Since idiots never know they are idiots," how do you prove that you're not the real idiot when you're busy allocating power, and how do you prevent the meritocracy from being manipulated?
It's obvious that the current system isn't leading us to the Utopian paradise we all want to believe is possible, so if you've solved these problems, I'd love to hear the solutions.
> Take away voting rights from those with no merit and give the rights to those with demonstrated merit.
Feel free to name three large human-caused disasters of the last 100 years that weren't driven by "those with demonstrated merit".
I write that because the vast majority of large disasters of the last 100 years were driven by such people.
Since you mentioned it, fascism was actually a creation of intellectuals and was driven by them. They eventually lost control to thugs but didn't object until that happened. (In some cases, they didn't even object then.)
Nte that any discussion involving progressives turns to camps for non-believers within a very short period of time.
The problem with that approach is a bunch of smart and interesting non-oligarchs also get the chop during the ensuing Reign of Terror. Then after a while, Napoleon steps in to fill the power vacuum.
The lives of the poor are of equal value to the lives of the rich. So the calculation must include the suffering throngs created by privileged and selfish nepotists and cronies.
Literal guillotines are unnecessary. Just take away their money, prosecute the criminals, and hold meritocratic elections free from the media circus.
Creating a better world is common sense. Tie the hands of the psychopaths among the superrich, discredit the mentally ill Christian fascists, and use scientific reasoning to fix the government and economy.
There is no shortage of resources when you recognize that the vast wealth of the superrich is unearned and won throug bribery, cronyism, nepotism, monopoly, and oligopoly. Wealth amassed through those methods is illegitimate.
>There is no shortage of resources when you recognize that the vast wealth of the superrich is unearned and won throug bribery, cronyism, nepotism, monopoly, and oligopoly.
I don't see any evidence this is true as a general rule. In some cases, yes, but not the general case.
Then you're blind. The far majority of the superrich inherited their wealth. This is called nepotism and it's bad for meritocracy.
The far majority of corporate and government leaders are there through cronyism. This is corrupt.
Mega corporations like halliburton enrich themselves with no bid contracts which they get by bribing officials. This is bribery.
Cellular networks and ISPs form oligopolies instead of competing with each other. The medical industry does this causing death and poverty.
The wealth of the superrich was inordinately acquired by combining monopoly, oligopoly, cronyism, bribery, and nepotism into one big ball of corrupt selfishness. This wealth is not earned legitimately through production and competition, it is stolen by distorting the market and corrupting the government both of which are fundamentally immoral.
Criminals must be stripped of their loot and sent to prison. Start with Lloyd Blankfein who scammed his own clients and made his riches by exploiting the trust inherent in the client-professional relationship that is a pillar of civilized society.
Just a quick history on some of America's wealthiest people
Larry Ellison--born to unwed mother, raised middle class
George Soros--poor immigrant to England, worked as a porter and waiter through college
Sheldon Adelson--son of a cab driver and immigrant
Michael Bloomberg--worked as a parking lot attendant to pay his college tuition
Carl Icahn--father was a cantor, mother was a schoolteacher
Leonard Blavatnik--Soviet Immigrant
Harold Simmons--parents were teachers
Harold Hamm--worked his way up from pumping gas and car repair
Andrew Beal--worked through high school fixing televisions
Ray Dialo--son of a jazz musician
Charlie Ergen--started out as a door-to-door salesman
Eli Broad--father was a housepainter, mother was a dressmaker
These are just the people who come from the middle classes and below. Most of the rest had parents who were only doctors or lawyers, or small businessmen (not what I'd call well connected power brokers), and most of them where only 2 generations away from lower class families.
Anecdotes are intellectually dishonest. Statistics show that social mobility in the USA is low and in sharp decline.
Your selection of 13 out of 50 indicates that 75% of even your sample inherited their privilege. So my statement about the "majority" stands.
In addition, the list you select from includes only public wealth. Inherited wealth is usually private, and the privilege associated with private wealth is rarely public. Privilege itself is a private phenomenon.
The top 50 is a paltry analysis. The top 400 is even too paltry, though it is instructive. Look at real statistics that include the entire population not cherry picked media darlings who are used as anecdotes to distort the real statistics.
"Census data show that 81.6 percent of those families who were in the bottom quintile of the income distribution in 1985 were still in that bottom quintile the next year; for the top quintile the fraction was 76.3 percent."
The media promotes visibility of that minority who worked their way up. They don't report on statistics though.
As the social safety net and human rights are further eroded, social mobility will decline more quickly.
Don't let a few cherry picked anecdotes fool you.
" A 2007 study (by Kopczuk, Saez and Song) found social/economic mobility in America at top income levels "very stable" and "not mitigated the dramatic increase in annual earnings concentration since the 1970s."[17]
Economist Paul Krugman, argues that despite their "great ferocity in presenting its case and attacking its opponents", conservatives have resorted to "extraordinary series of attempts at statistical distortion". While in any given year, some of the people with low incomes will be "workers on temporary layoff, small businessmen taking writeoffs, farmers hit by bad weather" -- the rise in their income in succeeding years is not the same 'mobility' as poor people rising to middle class or middle income rising to wealth. It's the mobility of "the guy who works in the college bookstore and has a real job by his early thirties."
How is social mobility among inner city blacks? It's a disgrace. The attitude of libertarians toward inner city blacks is deeply immoral and racist. "Just let them rot! No talented Ted Turners could ever come from the ghetto!"
The most meritocratic individuals in our society are not entrepreneur billionaires like the shallow and selfish Larry Ellison. They are unsung intellectuals in ivory towers whose genius is not recognized by CNN because CNN is junk TV for idiots.
We don't live in a meritocracy. People like Larry Ellison are not meritorious. If the superich had any caring for the unfortunate the wealth gap would not be trending the way it is.
Those 13 people I listed represent 13 out of the top 50 richest people in the US. Not cherry picked anecdotes. They represent 25% of the top 50 wealthiest Americans.
I'm not arguing about social mobility amongst the bottom quartile or the top 1% or anything else. I am refuting your claim that the all of the "super rich" inherited their wealth.
You said this:
>The far majority of the superrich inherited their wealth.
When I provided statistics that showed only 31% of billionaires inherited their wealth. You said this:
>It's bullshit. They were born into connected families and simply built on the advantages they already had.
You stated a fact without evidence, I provided evidence to refute your claim (also why do you care about evidence--you said earlier this isn't Nature).
At least 25% of the 50 richest Americans started out with no fortune or family connections whatsoever.
Even more of them were only upper middle class, but I didn't include them.
Well, I don't mean evidence in the sense of a scientific cite. But this is just an assertion - at least you can back it up with some argument as to why you think it might be true.
When 51% of the population decides that taking the money is legitimate and a good idea, it will happen. The poorer people get the more people hop on board.
The current ruling elite are flaming the fans of theocracy. They are responsible for pushing the slave morality of evangelical Christianity on the pathetic and miserable masses.
If we don't disrupt the growing master/slave relationship occurring between the superrich and the Christian fascists, we WILL see the majority voting for theocracy and they will get it.
The solution is to promote reason and science as tools of social improvement - meritocracy - not fatalistic laissez-faire capitalism which is nothing more than plutocracy.
I know what you're talking about. But you know, the real problem is human nature, and its selfishness and greed. It's those two that cause all of the problems you've listed. Basically, human nature is an intractable problem.
4% of the population commits the far majority of atrocities. That 4% is made up of the psychopaths - people genetically endowed with no conscience.
Psychologists and sociologists studying sociopathy have estimated that there are huge numbers of sociopaths in decision making positions who make the calls in favor of greed and brutality. Conscience bound people find it very hard to cause the deaths of innocent children in Nigeria though oil corporation policy.
Conscience bound people often will quit their job rather than make a decision for greed when that decision will harm people.
This is precisely how sociopaths rise to power - they will do the job and take pleasure in it. Now American institutions and corporations are run by sociopaths and we are surprised that evil is so prevalent.
> 4% of the population commits the far majority of atrocities. That 4% is made up of the psychopaths - people genetically endowed with no conscience.
I didn't mean people like Hitler and Stalin. Plenty of those in history, of course.
But think about politicians all over the world. Surely you'd agree that a lot more than 4% of them are mostly just concerned with their personal gain, instead of the common good. That's a result of the selfishness and greed inherent in human nature.
Even good people are selfish. I'm good but I'm also selfish. On the other hand, take Julian Assange for example. Now that guy is just about as selfless as humans come, but how many percent of the world's population do you think are like him? Maybe even fewer than the psychopaths you mentioned.
> Conscience bound people often will quit their job rather than make a decision for greed when that decision will harm people.
Sure, some would. But on the other hand, there are 21 thousand people working for Monsanto. Do you think only the very top executives know how evil the company is? What about, say, all of the so-called "financial services industry"?
Those Foxconn workers would be worse off without their job (otherwise, why not quit?). Of course, when you have millions of employees, there will inevitably be some nut-jobs among them.[1]
Also, I think you misunderstand the meaning of externalities. From Wikipedia:[2]
In economics, an externality, or transaction spillover, is a cost or benefit not transmitted through prices that is incurred by a party who did not agree to the action causing the cost or benefit.
As far as I know, everyone part of the iPhone manufacturing process agreed so.
Disclosure: I live a few blocks away from the Foxconn's plant in Shenzhen.
That must be the Longhua plant (Foxcon City) because no way I would want to live near the Guanlan one ;-). I spent a few weeks at the Guanlan iPhone factory at the end of 2010, debugging my device driver.
Let me see if I understand you. You'd rather people be unemployed than have the opportunity to work a (by your standards) crappy job? What do you intend to do with all the people who get taxed out of a job?
What about people who work crappy jobs in China but aren't employed by multinationals? Shall we tax them too? That's going to be kind of a hard sell, isn't it? I mean, the Chinese people might have this crazy idea they ought to decide what's allowed to happen in China.
Scarcity is a myth. There is plenty of food and shelter for everyone. If there are no jobs then take the wealth from the superrich and use it to feed the poor. Human life trumps property rights.
The superrich job creators are not creating jobs. Time we took their money and put it to better use.
>Scarcity is a myth. There is plenty of food and shelter for everyone.
But only because people have incentives to produce food and shelter. Take away those incentives and there will certainly be scarcity.
>If there are no jobs then take the wealth from the superrich and use it to feed the poor. Human life trumps property rights.
No it doesn't. Or rather, you can't have a functioning economy without property rights, and then you'll have millions starving. We've been down this road, so this shouldn't be a point of contention. It's no coincidence China's economy didn't start growing until they junked all that silly Marxist claptrap and started to respect property rights.
I just have to ask - how old are you? I don't see how anyone could have reached middle age and hold these opinions.
There is a happy medium between outright fucking communism and outright corporate fascism.
The superrich acquired their wealth through illegitimate means: nepotism, cronyism, bribery, monopoly, oligopoly, war-mongering, and all sorts of predatory scams.
Money acquired through illegitimate means is illegitimate and anti-meritocratic. Property rights do not apply to those who distort markets for their own benefit or avoid competing in the marketplace by creating a cartel or bribing a politician.
Superrich who engage in this behaviour are making themselves bigger than the market and bigger than the state, they are making themselves into autocrats, aristocrats, plutocrats, tyrants, slave-holders.
China is a slave state dominated by unmeritorious Party cronies and their nepotism. Chinese workers are slaves.
The proper response to slavery is rebellion and liberation. Humans are obligated to provide for themselves, not to be enslaved by psychopathic businessmen and broken economic systems.
When CEOs award themselves $100million salaries and golden parachutes they are engaging in cronyism and oligopoly. The free market no longer holds sway and this is immoral. Money gained through these methods is not private property, it is stolen goods.
Anyone who distorts a market or corners a market is an enemy of the public and forfeits their property.
>The superrich acquired their wealth through illegitimate means: nepotism, cronyism, bribery, monopoly, oligopoly, war-mongering, and all sorts of predatory scams.
Again, this is an assertion for which I see scant evidence outside a few specific cases. Most of "the superrich" own pieces of companies that do things like make toilet paper or provide insurance. Their money is invested in concerns that provide me with products and services, and I don't begrudge them a profit.
>China is a slave state dominated by unmeritorious Party cronies and their nepotism. Chinese workers are slaves.
Oh bullshit. Chinese people are not slaves. They may not have all the political freedoms we do, but work is a voluntary association just like it is in the US. In terms of the party, well, you'll never have a large organisation of people without power imbalances. It's neither the worst government in the world nor as bad as it was just a few decades ago.
>When CEOs award themselves $100million salaries and golden parachutes they are engaging in cronyism and oligopoly. The free market no longer holds sway and this is immoral. Money gained through these methods is not private property, it is stolen goods.
CEOs do not pay themselves. Where did you get this idea? CEOs are paid by the shareholders, ultimately, and if you're not a shareholder in that company, why do you care what the CEO makes?
Sure, but retirees had many decades to save up enough money to survive without a job. Since poverty is the default condition of human existence, i.e. all you have to do to be poor is not do anything to make money, most people will need some kind of gainful employment.
The direct cause of poverty is the police. A naturally born human goes into the forest and hunts for deer to eat. Then the police arrest him and throw him in jail.
He was not born poor; he had a forest full of food. The police made him poor.
In this way what you are calling natural poverty is actually a creation of civilization. The natural state of a human is that he may live off the land. Civilization has broken this connection in favor of the state and so the state has an obligation to the human to provide him with a fair chance.
Note that the superrich or even the middle class are not born in poverty. Rather they are born with silver spoons in their mouth. How is that justice? These wealthy families then engage in nepotism to ensure the wealth of their offspring at the expense of the poor. This is deeply unmeritocratic and is injustice. For these upper classes to then turn around and tell the poor to be enslaved or die is the height of evil.
"He was not born poor; he had a forest full of food. The police made him poor."
No, the forest is NOT full of food all year long. The roman empire knew that people in the forest will go down to the cities several times a year to loot the agriculture and cattle raising people because they STARVED(they will have too much food in spring, nothing in winter), so they will force this people to settle.
That was more than 2000 years old. Now human population is x600 bigger, and there is no way forest could sustain all of us without artificial fertilizers, and land planning.
"Note that the superrich or even the middle class are not born in poverty. Rather they are born with silver spoons in their mouth. How is that justice? These wealthy families then engage in nepotism to ensure the wealth of their offspring at the expense of the poor. This is deeply unmeritocratic and is injustice. "
This is deeply meritocratic, if I'm the best at something and make enough money I decide witch person or people receive the money, including my descendants, especially when I already pay over 60% of what I earn in taxes so other people could have opportunities.
>In this way what you are calling natural poverty is actually a creation of civilization. The natural state of a human is that he may live off the land. Civilization has broken this connection in favor of the state and so the state has an obligation to the human to provide him with a fair chance.
No, actually. Civilization is what is necessary to avoid periodic famines. There's a reason the hunter-gather existence fell out of favor. It's only an idyllic lifestyle to people who haven't really thought about it.
On the subject of the state having an obligation to provide a "fair chance", well, a fair chance isn't handouts, no matter how much other people may have. We have a system in which you can apply your talents to accumulate resources. It works very well.
>Note that the superrich or even the middle class are not born in poverty. Rather they are born with silver spoons in their mouth. How is that justice?
Is it justice that some people are better looking than others, or have better health? Is it justice that some people find a compatible mate and others don't? It's not the state's job to dispense "justice" - if it was I'd have a hot girlfriend. Even the court system isn't there to dispense justice - it's there to carry out the law.
>These wealthy families then engage in nepotism to ensure the wealth of their offspring at the expense of the poor.
Nepotism doesn't mean what you think it means. The wealthy families invest their money in an effort to stay wealthy, that much is true. But the side effect is poor people get wealthier, not poorer.
>This is deeply unmeritocratic and is injustice. For these upper classes to then turn around and tell the poor to be enslaved or die is the height of evil.
That's a little hyperbolic. "Enslaved"? Who's enslaved? A job is a free exchange - you get money for the work you do. If you don't like it do something else. That's not slavery, that's just life.
> Civilization is what is necessary to avoid periodic famines. There's a reason the hunter-gather existence fell out of favor. It's only an idyllic lifestyle to people who haven't really thought about it.
Not actually true. Most hunter-gatherers were better fed and healthier than people living in cities - they worked for a couple of hours a day gathering food.
It fell out of favour because city dwellers were eventually able to fortify and outproduce on the better land, forcing everyone else to the outskirts.
Hence the line about people being pushed to the outskirts.
Now hunter-gathering is a subsistence lifestyle. Back before agriculture it was a very different story, since there would have been hunting in the most productive lands, too. Fossil records back this up - early hunter gatherers were much larger and taller than later farmers.
Actually, the FoxConn workers are making a lot more than their parents, and in fact are sending money home. I don't think you could say that of anybody in US, even a university graduate.
The real problem in US is everything is expensive.
And don't forget that the government of a country with 1340 M people, has an enormous incentive to keep the status quo. If automation destroys hundreds of thousands of jobs, it's a recipe for chaos. The ones ruling China, surely want to keep people working with low wages, so they can be replaced easily if they start causing trouble. Having hundreds of thousands, or millions of unemployed people is by far much more dangerous for them, than loosing a few bucks per phone by not automating the process.
An interesting factoid I saw online was the economic value of a quantity of oil. One of the cost visualizations was what the lost oil could produce in economic output in China, and the US. The US value far exceeded China's.
China benefits from low-wage and low-rights labor. Capital productivity is still higher in the US. Not something to take as a given for all times, though.
How would that help those people though? Presumably these people are not forced to work in those factories, so just moving their jobs to robots in America isn't going to help them. It would only help them if the premium is going to the workers (and you could probably make do with less than $100: assuming that the workers get $5 of the $6.50, increasing the price of the phone by $100 and giving it to the workers would give them 20x additional salary).
In aggregate, this would result in fewer products being purchased and fewer jobs. That said, the conditions in these jobs appear to humane- with a few exceptions.
There are many organizations you can donate that $100 to instead. It may not make the world a better place for those specific people who assembled your particular iPhone but it'll make just as strong an impact someone's life.
I don't like their assumption of 50% profit margin (including nothing but hardware). They have the manufacturing cost and the retail cost, why not use the american manufacturing cost to think up a real retail price?
Companies have closed major facilities in the United States to reopen in China. By way of explanation, executives say they are competing with Apple for shareholders. If they cannot rival Apple’s growth and profit margins, they won’t survive.
They don't care about workers, they care about shareholders. If Apple says to its shareholder "We'll earn 30% less next quarter, but we'll create 30000 new jobs in the US!" how do you think the market would react ? They'd sell like crazy! The share price would plummet. No one wants to loose money.
What's the moral advantage of using American over Chinese workers? By a similar token, why not just raise the wages of those Chinese workers by 100%. They'd be madly richer, very happy, and still far cheaper than American workers. Then again, the existing wage level is such that it commands some 8 000 applications a month (at Foxconn).
Part of the gist of the article was that US regulations make building out flexible manufacturing capacity rapidly incredibly difficult. Quicker to do it in China. Ironic considered the PRC's legendary red tape (no pun).
Apple owes its existence to American education, infrastructure, and a host of other services provided by American taxpayers. Why shouldn't they support the same families that supported them all these years?
Apple is a boon to the US economy. It adds a market capitalization exceeding the GDP of other sovereigns, high-paying jobs, and international prestige in design and technology.
Apple also pays taxes to the US Treasury. These taxes, in addition to those on the incomes of its stakeholders, are meant to repay the presumed social debt Apple gains from being here. Whether those rates are set badly or the taxes squandered isn't Apple's question.
A person across the Pacific could similarly ask, if Apple hired only Americans, why Apple insists on supporting the richest country while denying people in East Asia a meager income for a crime no greater than not being American.
>Apple owes its existence to American education, infrastructure, and a host of other services provided by American taxpayers. Why shouldn't they support the same families that supported them all these years?
You mean, why shouldn't Apple pay even more to support families it's already been supporting all these years? Do you honestly think Apple, as a corporation, has been a net-negative to the taxman?
Apple is no longer utilizing those services. It is instead using Chinese education and infrastructure. Why should Apple continue paying for services it no longer needs?
Absolute and total nonsense. Do you really think Apple and other multinationals could operate as profitably, or at all, without many of "those services."
Enforcement of Apple's intellectual property? Protection of their brand and trademarks? The contracts they rely on? The banks they rely on? Safe passage of ships and aircraft carrying raw materials and finished goods? The security and safety of their executives and engineers?
No. We are talking about Apple. You may be talking only about Apple's Chineese subsidiaries. Even so, they do not exist in a vacuum, and it is foolish to think that Apple's IP, brand and trademarks would be as secure in China without the global system of IP protection that the US government has been instrumental in building.
There was another article on Foxconn that was really good. The working conditions are absolute SHIT. No exaggeration. Despite being shit, the abuse at the factories is still better than a life of poverty. To you and I Chinese workers are treated like shit, but to them, it's better than before. And that's when it really hit me. As human beings, we like to climb UP, but not down, we like to ADD but not take away. We want MORE but never LESS. And as soon as a country stablizes and steps on it's feet, it's growth stops. There's no one to take advantage of. Everone has climbed up. And business is all about taking advantage of someone. This is a re-occuring theme in history.
I think this is what Americans need to understand the most.
China is the new America (in it's younger years, pollution, slaves, child labor, no rights, but lots of growth and opportunity), America is the new Europe. One day, everyone reading this will be dead, but rest assured China too, will stablize, be free, and then it will be Africa's turn.
There's another article that I can't seem to find that talks about this exact process. It takes time for a country the size of China to grow. People's living condition doesnt just suddently get better.
I see people complain about the working conditions when they're living in the US in their single family homes with 2 cars in the garage with boat loads of disposable incomes. They just dont understand the alternative of these giant factories is just no work or even worse jobs. Overtime, when these unskills people becomes more skills at what they do, they will have more options and things will naturally get better.
The only benefit of the workers was their ability to be quickly reconfigured with rudimentary training and strict scheduling. A robotic assembly line with the same just-in-time reconfiguration is superior for obvious reasons.
We've reached peak oil, peak children, and now it's probably time to consider the effects of peak labor.
These are middle class jobs, not some sucky jobs. You are too comfortable where you are, hence you don't see other people's plight.
Try to build a factory in the US. By the time all the environmental reviews and other regulations are observed, and law suits from Sierra Club and others are cleared, there is simply no way to build the factory! Hence no one builds them, hence ...a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
I know plenty of factories in the US. They're robotic. The US churns more product out now than it ever has, but it employs fewer and fewer people to do it. These are the productivity gains from 40 years of computerized automation taking its toll on the American worker. It's not a skills problem, it's much worse. If it's a skills problem the only solution is for humans to acquire the skill of working 24/7 performing repetitive tasks with a predictable maintenance schedule.
They're not, but the supply chains are already in place, which brings up the other elephant in the room. If labor isn't the issue pollution is. As EPA laws tightened China's lax oversight beckoned. It's not easy to find a place in the US that will look the other way and is located close to labor/transportation.
In the UK these are defiantly not classed as middle class jobs. Heck teachers are only JUST about considered lower middle class in the UK. Working on the shop floor is not a nice job. Humans are just not designed for fitting one component for 8 hours a day with little variation.
It's one the great tricks america has done, almost everyone thinks they're middle class. In the UK i'm not even sure i'm middle class.
A UK factory job might not be fashionable, but thanks to unions, they pay fairly well, easily twice or three times what supposedly-educated people make at any call-centre (possibly excluding credit-collection ones -- they make some real dough in commissions). There is no "free overtime" or other white-collar euphemism for unpaid work, automation has made workload extremely light for almost everyone, and good luck firing them without hefty compensation.
The problem with these jobs, apart from perceived low social status, is that they tend to be few and far between, mostly because of automation, high startup costs and low margins in the industrial sector.
No trust me. I had a family member in factory job. They did not like it at all. He gained arthritis from working there, then despite the fact he had been working there most of life without any complaint about his performance tried to performance manage him out a few years before he was due to retire. He earned less then my first grad job.
And, if Federal Reserve created inflation hadn't destroyed their purchasing power, they'd be 20% ahead on wages at the bottom than they are today even if those wages had stayed at the same literal dollar amount they were at over forty years ago.
The middle class is getting hammered and because they have less disposable income they save less and spend less, hence the economy grows slower.
Wages have been stagnant since the 70s, while healthcare costs and cost of living have skyrocketed
This sentence is a jumble of confusion. Wages have not been "stagnant", wages adjusted for a flawed [1] measure of the cost of living have been. Nominal wages are way up. You are correct that health care costs increased, but those costs are mostly not paid for with wages [2].
In fact, total compensation for labor is up considerably. Workers simply receive more of their benefits in the form of untaxed health benefits rather than taxable wages:
Further, the stagnation of wages themselves is due mainly to Simpson's Paradox. Immigrants enter the US and occupy low levels of the wage ladder, lowering the averages. But the immigrants are better off, as are non-immigrants (who's wages did not stagnate):
> In fact, total compensation for labor is up considerably
Over 40 years, you'd hope for a little more than "considerably". Especially since a lot of growth is in worker productivity - people doing real work (i.e. those on minimum wage) work harder than ever.
Maybe 39% (from 1975-2005) isn't enough for you. That's your call. To me, it's a far cry from "stagnation".
As for growth in worker productivity, I seriously doubt it occurred due to actions of minimum wage workers. Are you asserting that a burger flipper flips more burgers now than in 1975?
If we follow Paul Krugman's logic [1], this is not the case. Workers tend to be paid their marginal product. This suggests that if wage gains were distributed more to the top than the bottom, this is because the productivity of high earners increased more than the productivity of low earners.
The middle class is smaller because we've added fifty million immigrants (legal and illegal) to the bottom end. So of course the people who were here make up a smaller percentage of the total.
Its excessive regulations and crazy labor laws that stop people from building factories in much of the US. I am mostly leftist on much of my view and I'm sure people here will downvote me, but unions have screwed workers.
People in the US can continue saying these are sucky jobs etc, but every Chinese person I've met who's worked at these factories has claimed they've enjoyed the experience. Although the ones I met said they did it while putting themselves through school etc.
They "like" the factory because it's Better than starving and working on a farm. They make more money in a factory than on the farm. China is the place to manufacture but NOT the place to live. Everyone wants to do business with china but no body in their right mind wants to actually live there.
That's right. Assuming you're American, its exactly what your grandparents or great grandparents might have done in the late 1800s or early 1900s when they got off the farm.
When the Chinese people have had enough of their working conditions, they'll change things themselves.
Good for your great-grandparents. I've had white co-workers who took me to the textile mills where their grandparents worked in the Boston area, in abysmal conditions by today's standards. They've been long shut down and turned into office buildings.
There are no property rights in China as we understand them. Farmers grow stuff on "their" land, but get to keep their produce. They're actually pretty productive.
If you read the article none of the executives quoted directly mention how cheap Chinese labor is. They talk about how quickly they can "scale up or down." There are only 2 countries where you can scale up your semi-skilled work force rapidly, and the other country hasn't started ramping up for manufacturing just yet.
Regarding your comment about suicide, China for various reasons has a rather high suicide rate. Its not clear to me if the suicide rate amongst FoxConn workers is just a symptom of their society or something really bad about FoxConn itself.
Keep pressure on them to improve. Not just Foxconn, which is getting singled out (and will, most likely, end up being one of the better ones due to scrutiny after this blows over), but on all of the factories until they reform.
Specifically, they appear to pay no attention at all to worker safety. You'd think that after things like that horrible carcinogenic Sanlu milk, they would be more interested in things like chemical safety, but I guess they're not quite there yet.
While America is by no means perfect, they should copy us and have people monitoring workplace injuries, require worker education on safety, require appropriate protective gear for anyone doing dangerous things, and hold companies responsible for the health & safety of their workforce. It's not impossible to improve. I don't expect them to be perfect, but there are plenty of things they could be doing which, according to the reports, they are not.
When the Chinese people have had enough, they'll demand change. Who are we to force change down their throats?
In 2003 our President invaded a country that had nothing to do with the war on terror. We didn't listen to anyone including our closest allies. Why would China or anyone else give a shit about what we have to say now?
>> When the Chinese people have had enough, they'll demand change.
> You mean like the group that threatened suicide? Or the outrage over that Sanlu milk powder?
Like I said, when it gets too much, they'll demand and get change. Its not our problem.
>> In 2003 our President invaded a country that had nothing to do with the war on terror.
> I don't know why you're comparing bad PR to starting a war. You appear to have a very different idea of "pressure" than I do.
My point is we don't have a lot of moral authority anymore. Everyone remembers that we started a war under false pretenses. And that we killed 100s of thousands of Iraqis in the process of bringing them "democracy". Our own jihad for democracy.
It isn't just bad PR. You said we should "pressure" China to force their factories to provide better working conditions. Why should they?
Or were you implying that we should invade China as well? Is that your idea of "pressure"?
The "pressure" I'm talking about is the existing bad PR. That is, what's happening right now. And it is getting results, because Apple itself is auditing its suppliers.
I most certainly do not advocate starting any wars. I'm not even talking about government pressure. Frankly, the economic pressure from Apple, which doesn't want to take crap for factory conditions in China, may do more good than anything the US government is likely to try.
And I'll add that Apple is one of the best companies to put pressure on. They have a super-strong strong brand and their products often fetch higher prices and profit margins than their competitors. This gives them a strong incentive to protect their brand, and the means to do so.
Part of the reason their products can demand a premium price and healthy profit margins is because they have high standards for quality, profit margins and quality both rely on a strong and well managed supply chain. This well managed supply chain gives Apple greater ability than most to extract compliance with their required labor standards. The demand for quality means, in part, that Apple's suppliers make a greater investment in training their workers, which makes retaining those workers more important.
If Apple's suppliers attract and retain workers with better pay and better working conditions, then that creates pressure on other manufacturers, who must improve the package they offer workers in order to keep them from going to work for Apple's suppliers.
I'm sure there are other good targets for this sort of pressure, but Apple has to be among the best.
> The rest of the world (and those of us who deal with it) begs you not to start any more wars.
I didn't really have any planned, you know. I mean, I don't even have a lair in a volcano on a skull-shaped island yet! You can't seriously expect me to go around and start wars without one. It simply isn't done.
But seriously, I think that bad PR for image-conscious companies with factories that have substandard working conditions is a good way to leverage economic pressure. Because their brands have value to them, they'll try to restore them by putting pressure on their suppliers to clean up their acts and hopefully that will lead to reforms by driving competition. None of which involves wars or even government intervention, though it might take a bit of investigative journalism.
Hahaha. Very funny man. LOLCATZ, Cheezburger Catz!
You know I meant "United States" when I said "please don't start another war".
We have a big difference in the way we think. I think if someone CHOOSES to work in a factory under semi-inhumane conditions so their children can have better lives, they are fucking heroes.
You think they are victims. Your Western brothers (including the clown who got his post deleted) think they are somehow less than them.
> Label how many children were used to produce the product.
Exactly who is going to count this and not report back 0? Either because they resolved all the issues they found, because it's illegal, or because they're not going to admit to it, because it's illegal.
Off the top of my head, everything in the US and countries with strong labor/environmental laws gets a US certified "cruelty free" sticker with little checkboxes under it that state that no child labor, etc. was used. No one else gets to have a label unless they pay to have their entire supply chain certified on a yearly basis.
The absence of a label will be taken as the product did in fact use child labor, unsafe work environments, etc. just like the lack of an organic label is taken to mean that the farm uses pesticides when in fact, it could just be they couldn't afford certification.
You make a good point. Much "organic" produce in the US is now grown in China, particularly of processed ingredients. China is selling the certification, the food is grown in toxic soil with fertilizer and pesticide, then a gentleman signs off that it is organic and it can be sold in foreign markets for a premium to naive customers.
Certifying that something is "child labor free" or "slavery free" is just as reliable.
Especially in a factory, you shouldn't trust anyone giving you numbers that are too good to be true. Sure, you can have automated processes that keep track of things, but if anything unexpected happens (which is common) and the processes change in ways the monitors don't expect, your numbers become meaningless.
My boss, an old guy in his 50, scoffed the notion of "Made in Canada" (or "Made in USA").
He said that "Made in X" (CA/US, interchangeable) used to be good when they first came out. But quality drop significantly that they weren't any better than "Made in Y" (China, Philippine, Nepal, Srilanka).
Even after you put those gory details, if the quality of the "better-morale" products suck, it won't matter much.
I think we all (everyone in this world) know what it takes to make iPhone by now. But we're trained not to care any more.
Good suggestion, but not sure the perception will change much.
I'm almost an old guy (50 in May), I'm the guy who makes the LEGO-compatible iPhone 4/4S and iPod Touch cases (www.smallworks.com)
We recently moved the molds for these out of China, and back to the US, in order to save money. The production costs are nearly equivalent to those in China, and the 6 week 'float' of cash while the product is on the boat is a huge PITA.
The cost advantage varies by industry. For some industries 6 weeks on the boat for final product is a lot. For others, every component 6 weeks or so on tens of boats is more problematic.
I agree with the gestalt of your statement, however; painting this with broad brushes, e.g. manufacturing has left the US for good, is simplistic.
Anecdotal, I have had a few items made in China over the years I've replaced with USA made stuff that was much higher quality: my gas grill (going on 7 years of use, chinese one lasted 2 years) and some bakeware I recently bought.
Some things are better from here, some aren't, but lately most of the items I buy from the US are usually higher quality, albeit often much more expensive.
It's not anecdotal and I agree with you: some things are better and some aren't.
Perhaps there were a time in the past (of my boss's life) where made in USA weren't as good as it promised/advertised thus giving way to made in China.
When I grew up in the late 70's and the 80's, a lot of US made stuff seemed to be crap. I think that part or most of the stuff now made in the US is more quality, because it's much more difficult to make cheap stuff and compete with China.
The are not doomed to eventual automation, because the people who work these jobs have a huge advantage over the machines that might replace them:
they are flexible in what they build, and easy to train.
Robots have to take a huge leap forward before they can even come close to the flexibility offered by a person.
People are flexible in what they build, they are flexible in how they build it, they are flexible in what job they do, and (depending on the contract) they can be dropped instantly where they are unnecessary.
Compare that with a factory made of robots representing a large capital investment that could very quickly become out of date if you change your product slightly.
If you had actually read the article, perhaps you would have added the immigration of all of Foxconn's employees into the U.S. Apple's complaints weren't about wages or regulations in the U.S. at all. The primary complaint was that there simply weren't enough people with the sufficient training to do these jobs in the U.S. the workers do not exist.
"A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames."
Is anyone else disgusted by this? Waking employees during their rest period, not to mention it being after midnight. These poor workers are essentially slaves in all but name. It's quite unconscionable that Apple should make $400,000 profit/employee while the aforementioned is happening.
Fair enough, but this perspective is very Western, ie, further along the economic development timeline.
In China, it can be argued that this represents progress over the alternative, which would likely be rural poverty. The alternative might be 16-hour days, without anything resembling a dorm.
Again, I understand the disgust, but sweatshops are part of our economic history too. The question is whether it is a necessary (and net-positive) step. It might be.
Disgust comes very quickly in economic history after sweatshops, though. Major industrialization along the lines described here, with mass-scale factories and a "company town" where employees live/work/sleep there, happened in the United States in the 1880s. And that whole decade was immediately full of labor unrest, most famously the Haymarket riot, but including thousands of strikes, protests, and other "labor disturbances" across the country, due to a feeling that industrialists were getting rich by treating their employees as quasi indentured servants. The backlash was severe enough that by 1900 both major parties were attacking the industrialists, with Democrats having ties to the unions, and the Republicans led by trust-busting Teddy Roosevelt. (I'm guessing the Chinese authorities are keenly aware of all that history.)
I recently read an article about Foxconn workers threatening mass suicide if conditions don't improve, so it's happening there too.
Eventually they will run out of their supply of peasants fresh off the farm and things will change. Or robots will take over, which happens first is anyone's bet.
1) Many of the companies are with working with low profit margins, i.e. the profit margin is <5%. With rising costs in both raw supplies and worker wages + low demand from abroad, many of these companies are being driven out of business due to their decreasing profit margin.
2) Since rising costs are eating into companies' profit margins, many companies are looking at relocating their manufacturing base from China to countries with [even] cheaper manual labor. For example, Foxconn has recently inked a multi-billion w/ Brazilian gov't to produce ipads and apple related products there. Other companies are looking to relocate their manufacturing base to SE asian countries like Vietnam where cheap labor and gov't wiling to bend the rules for FDI are still aplenty.
A Brazilian worker earning the minimum wage[1] every month, and considering that there's a whole set of taxes that an employer has to pay for every employee in Brazil, mainly for social security, that probably will turn every Brazilian employee worth almost 2 to 3 Chinese doing the same job.
So that's probably not the case for Foxconn as well.
[1]: Which according to Wikipedia is more in US dollars than what a typical Chinese worker in Shenzen earns in a month, US$ 390.93 versus US$ 208.32
If that's the real reason, it seems that Brazil's protectionist tariffs are having their desired effect (forcing more manufacturing to be relocated to Brazil). No idea if they're a net positive for Brazil's economy, but this move will probably be taken as a vindication.
In my opinion there are some positive effects but overall it's really bad.
As you can see in the link in the sibling comment, the overhead of employing people in Brazil is quite big. Besides, there's also additional overhead due to a myriad of non-labour-related taxes, and living cost and the minimum wage are significantly higher than in China and SE Asia.
So while we do have a large industrial base, it's not like we have factories for every kind of product just because of protectionist tariffs.
That results in the curious situation of having to pay (say) U$1000 in Brazil for some Chinese-made product that can be had for U$500 in the US.
> Disgust comes very quickly in economic history after sweatshops, though. Major industrialization along the lines described here, with mass-scale factories and a "company town" where employees live/work/sleep there, happened in the United States in the 1880s.
...and yet most people are still not sure if their clothing / food / gadget / jewellery was produced ethically.
For sure, there's stuff like fair trade, and "Ethical Consumer", but these are still niche products.
It seems many people are happy to offload those dirty low paid over worked unsafe jobs to other countries.
This. I'm not sure any country in the world ever rose up out of abject poverty (which persists in rural China, e.g. Szechuan province, where no Western reporters ever seem to go), without going through a phase where everyone had to work 12 hour shifts at shitty factory jobs. That includes the US, Japan, Taiwan, South Korea, and every European country.
It sucks that things seem to work that way, but it looks like China is moving in the right direction here, not the wrong direction. At some point (as was the case in all the countries I mentioned) they will demand and receive there rights. There is evidence of this happening in China already.
At least all the Foxconn workers all agreed to work at Foxconn, which implies that their alternatives were worse. There are countless millions of others in the world who aren't so lucky.
Ireland never industrialized. Went from subsistence tenant farmers to post-industrial, via famine, revolution, civil war, disillusion with church institutions and attracting foreign direct investment in the middle.
Ireland generally inclines towards actively forgetting those who leave. There's a deep vein of begrudgery for people who found success abroad, like they're too big for their boots, and a kind of shame that keeps people silent for those who didn't. The way Joyce put it, Ireland is the old sow that eats her farrow; people who leave usually don't come back.
I don't think remittances were ever a significant source of income. It's not like patterns of emigration seen with other countries, where one or the other parent leaves and sends money back to the family, and eventually returns. If anything, remittances were used to fund further emigration, so that families could join up abroad. Ireland's population still hasn't recovered from the famine of the 1850s.
>It sucks that things seem to work that way, but it looks like China is moving in the right direction here, not the wrong direction. At some point (as was the case in all the countries I mentioned) they will demand and receive there rights. There is evidence of this happening in China already.
Correct. There are many incidents in southern China (e.g. Guandong, wenzhou, and other cities with a large factory presence) where workers have gone on strikes to protest for fairer wages and better benefits.
Also, I read a NY times articles (can't recall the link off the top of my head) where Chinese factories were competing against each other for qualified workers. As a result, workers were given higher salaries and better benefits.
>In China, it can be argued that this represents progress over the alternative, which would likely be rural poverty. The alternative might be 16-hour days, without anything resembling a dorm.
Well said. I would highly suggest that people watch the documentary "the last train home" (available on Netflix streaming), where it shows you the mentality of migrant workers who leave rural China for factory jobs in urban China.
It's not so much the midnight wakeup and the rush to accomplish some necessary goal. In the right circumstances, that's actually kind of neat.
But we do have to understand, these employees live their lives in company dormitories, and for this above and beyond effort, are not paid in overtime, but with a biscuit.
Apple (and others) are arbitraging the more humane and worthwhile labor arrangements our parents (and their parents) literally fought for, and died for, to make our working lives much better.
It actually is, pretty despicable, not that foreign workers are given a chance to better their lives, but that the Apple's (and others) decisions work not to raise everyone up, but to bring us all down to a minimal level.
I think all of us are eager to see living and wage conditions rise all around the world. It is the race to the bottom that is disturbing.
If China were to improve its records on the environment, worker rights, and human rights, it sounds (from the article) as if they would still have an advantage in manufacturing that would be pretty hard to overcome by another country.
But I would certainly feel a lot better, and would even be willing to pay a bit more for my products, knowing that the government did indeed enforce similar regulations to what we see in Western countries.
Ironically, the Chinese government, which is still ruled by the "Communist" party, is demonstrating the worst aspects of capitalism -- namely, that profit trumps all other considerations.
Nah. That's the price you pay to make Apple move their factories from the US to China. If not, Apple will make their plants in the US.
As some has mentioned, it's the price you pay for growth when you are poor. I have been there, and done that. Still not rich, but situation improved. I couldn't do it otherwise, and I'm happy I did it and moved forward.
The advantage is partly from having less focus on the good of an individual vs the good of the whole. It looks like there's an inherent cultural aspect to this that exceeds what we've ever seen in "western" cultures, but some of it will almost certainly fall by the wayside as economic development continues, as it did in the west.
The edge will probably be there for generations to come, but I expect the gap to shrink dramatically.
The list of things that both you and the person who is roused at midnight both chose:
- The job.
The list of things you get to choose while you're on call and what the person who is roused at midnight did not get to choose:
- Where to live.
- What to eat.
- What kind of bed in which to sleep.
- What type of housing in which to live.
- The mode of transportation to and from work.
- The environment of living in which to simply exist.
Here in India, being permitted to live on site is considered a perk of employment by many. Among other benefits, if you are a migrant worker, it means you don't need to pay for both your family's housing and your own.
Not me. For these people it represents a step up from the alternatives. And if you somehow force China to meet western labor standards, you're not going to make them better off. The jobs will move to Burma, or Indonesia, or Vietnam, or Guatemala. Then the Chinese factory workers whose condition so disgusts you will lose their 12 hour a day factory jobs and return to working sixteen hour days on the farm.
Keep in mind that it is an American company that these workers are manufacturing products for.
Should we as Americans feel good about ourselves for giving work to overseas workers that is better than their baseline, but still represents shit work that we ourselves would never do?
>Keep in mind that it is an American company that these workers are manufacturing products for.
Keep in mind that the work is not taking place in Cupertino, but rather in places like Longhua. Also keep in mind Apple is a multinational corporation, and that Apple products are sold in places other than the US, and that Apple's international competitors don't pay US wages to manufacture their products.
>Should we as Americans feel good about ourselves for giving work to overseas workers that is better than their baseline, but still represents shit work that we ourselves would never do?
Yes, as a matter of fact. Because this is the way poor people become not-poor people. Economic growth is the basis for improved living standards.
It's not intrinsically shit work. I have worked in industrial factories. They can be good jobs. Obviously they can be crap jobs as well. All depends on what sort of society you want your children to live in.
Agreed. The media is not helping either by framing the issue wrongly. It's not US competitiveness that is the issue here -- it's China's lack of human rights.
This is a somewhat controversial article but it makes a point that China's unfair competitive advantage is its lack of respect for most human rights, IP laws, etc.
Another thing is that going to college is not a fundamental right of a citizen. If you do not score high enough on the NCEE, you are basically slotted for factory work (if your family is not well-off enough to pay full freight at at a European or American institution)...
"Students in the Chinese education system endure six years of elementary school and six years of middle and high school to prepare for what is often the most important turning point of their lives: the National College Entrance Examination. The exam takes place once each year. If student scores are high enough, they might be able to enter one of the few high-ranking Chinese universities in big cities like Beijing or Shanghai. This builds the foundation for good jobs after graduation. And if their English is good enough, they can take the TOEFL (Test of English as a Foreign Language) or the IELTS (International English Language Teaching System, or the British equivalent of the TOEFL). And last, if their families are financially blessed, they might have a chance to apply to colleges in English-speaking countries such as the USA, United Kingdom, Australia, Canada, or New Zealand.
Unfortunately, if their entrance examination scores are below a certain point, the options after high school are limited to obtaining associate’s degrees or starting in extremely low-paying jobs.
For most Chinese students, the only way to a brighter future is to ace every subject in school and to be in extraordinary condition on the three days of the National College Entrance Examination...
Many American students find it hard to understand the Chinese schedule. But we accepted the rigor because competing for the few high-ranking Chinese universities requires a lot of work. Nearly 8.8 million students take the college entrance exam each year, and only about 20,000, or 0.2percent, make it to the top colleges in China."
Reading this, I have to offer an anecdotal (counter?)point. All of the following is true, but is by no means the norm.
My father was born in rural China. He grew up eating roasted grasshoppers. His parents were both teachers; they were proletariats and there was no way to rise up the social ladder (not that there was much of one within thirty miles).
Around fourteen, he realized he was in serious trouble. There was no way out, he was trapped in that village. He decided to start paying attention in school and worked on mathematics problems in his free time. Mathematics problems were all he needed (solutions to them were nice, but not necessary after a few examples). He also worked on a few other subjects, but those were all closely related to mathematics (physics is one, for example).
He did well on the NCEE, and went to TsingHua. After that, he immigrated to the United States.
He maintains that there is no such thing as being "genetically smart". All there is to it is work. He has a brother and a sister; none of them achieved the level of success he did, simply because they didn't practice math problems when they were young.
So yes, you're right when you say "For most Chinese students, the only way to a brighter future is to ace every subject in school". However, contrary to what you make it seem, it isn't impossible or even extremely difficult though; all it requires is determination and work.
Of course, this is anecdotal evidence. It is by no means a key to success in China today.
Though other factors come into play, environment, education, etc., we are not all gifted with the same faculties, and it is ignorant to claim otherwise.
Also, there may be structural reasons why it can't work for everyone. I imagine that if everyone studied harder, the score needed to go to college would go up.
> Is anyone else disgusted by this? Waking employees during their rest period, not to mention it being after midnight. These poor workers are essentially slaves in all but name.
That's second half of the 19th century western world by all accounts. It's exactly the kind of stuff you find in e.g. Zola's Germinal.
Yes, it's quite interesting that the position of the author of the article seems to be that if only the US had hordes of slaves kept captive in slave camps where they can be awakened at midnight, then perhaps we could be more "competitive". You are right to be questioning this as an advantage as opposed to a reason to ban the import of all goods from this slave society and put the "businessmen" that knowledgeably profited from it in prison for crimes against humanity.
Yes, I also read that very paragraph and highlighted it to copy in to a post over here for further discussion (and with much the same conclusion as you). Here were two others from later in the article:
:"The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day."
Not just slave labour, but Chinese-government subsidised slave labour.
:"The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day."
China is lifting itself out of poverty and they aim to be the most powerful country in the world, not a cheap labour factory. Meanwhile the US is a rich developed country with over 2 million slave labourers (prisoners) living in dormitories, subject to violence and working for less than a chinese laborer with fewer rights. I would rather buy an iPhone made by aspirational Chinese than victims of the war on drugs. I tend to avoid US products due to a perception that US employees don't get decent wages or health care compared to other developed western democracies.
"I would rather buy an iPhone made by aspirational Chinese than victims of the war on drugs."
One of the weirdest statements on this topic so far, it supports the hypothesis that humans are not rational (and likely are completely f*ing insane) when it comes to arguing theology, philosophy or politics. Let's just take the gloves off (or better, pull out the guns and start shooting) - we're obviously better designed to do that than to come to any reasonable compromise (it is always a compromise, not an agreement) through speech.
P.S. Am reading Maurice Ashley's "England in the Seventeenth Century". That was a period chock full of political/theological/philosophical madness. Threads here show humans remain as "rational" in their thinking as they were then.
Both the book and this topic are a hoot until one realizes that some of those involved were/are in responsible positions. My conclusion so far: Taleb's description of Black Swans is optimistic: we're much more likely to see some civilization-crumbling in our lifetimes that we formerly thought.
It's been a quiet and peaceful ride down the river so far but I'm going to buy a barrel and some tar - I think the roaring sound I hear ahead is a waterfall.
slaves aren't paid, though, and these workers are. for me, the saddest thing about those conditions isn't that workers have to endure them, but that they voluntarily endure them. whether it's because either the pay is high enough or the job is better than any other job they can find or a combination of the two, the important thing to realize about these working conditions is that people are fighting to get/keep these jobs because the other jobs are worse. industrialization is messy and horribly exploitative.
The untrained eye sees jobs being taken away from Americans. The economist sees value being passed on to American citizens in the form of a price reduction of Apple products, and healthy acknowledgement of the reality that the American workforce is no longer suited to produce computer hardware efficiently.
Jobs are not a sign of prosperity; we don't go to work just to go to work. If that were the case, we'd mandate that people must farm with spoons.
The article and video don't seem to be arguing that it's bad to lower costs. They aren't even saying that it's inherently bad to outsource some of these functions to China and other countries.
Rather, there seem to be two points:
(1) Ignoring the cost of labor (which everyone thinks is the reason that US companies outsource to China), it's still logical to send manufacturing to China. Their plants, labor force, and supply chains are all better suited to the needs of high-tech manufacturing than anywhere in the US.
(2) Moving all of these manufacturing jobs to China (or elsewhere) has not only meant the loss of many mid-skill manufacturing jobs in the US, but also many jobs that were created to support those jobs, to a degree that the service sector doesn't even come close to reaching. This has long-term ramifications for US jobs, in that many of the traditional middle-class jobs that people used to be able to get no longer exist.
It certainly sounds to me as though the US should not expect to get any of these manufacturing jobs back. It also seems unlikely that you can train an entire country to do white-collar, high-tech and service-sector jobs. And while I know that the US continues to do a huge amount of manufacturing, it's with many fewer (and more highly-skilled) employees than ever before.
So, what's an economy to do? It's easy for me to tell my own children to study hard and to try to get good jobs, but that's not scalable, nor is it realistic. Maybe when everyone can manufacture things at home, using 3D printers, then manufacturing will be as flexible and portable as software startups nowadays. But barring that, the solution is far from clear to me.
As goods are produced more efficiently, they become less expensive to purchase for the consumer. As efficiency increases, then, workers have to work less.
The amount that Americans have worked per week has dropped almost monotonically (http://eh.net/encyclopedia/article/whaples.work.hours.us) since the mid eighteen-hundreds. The end goal is that we all don't have to work so much; maybe some of us not at all.
In short, an economy should pursue the most efficient strategy for manufacturing and delivering goods, and that happens (mostly) through the price system.
This kind of large scale box-office-hit manufacturing is not coming back.
However, there is still opportunity for smaller scale manufacturing centers to be established outside. These typically involve smaller batches, more specialist products.
I agree with your sentiment, but job creation isn't the end goal. Prosperity is. Prosperity comes through automation, which is the exact opposite of job creation.
>The economist sees value being passed on to American citizens in the form of a price reduction of Apple products
The person in denial more like. Any ecomomist would realise the price of apple products is tied to how much you will pay (ie for profit maximisation), not how much it costs. That is how you make over $400k per employee.
The article points out that wages are a small part of the cost.
That's a false dichotomy. A good's price is tied to how much you'll pay and how much it costs. If an iPhone cost $200 more to make, it'd be a good bet that it wouldn't sell for the same price.
Not really. The price is a function of the value to the buyer, which drives demand and is independent of manufacturing cost. Above a certain price I just won't find an iPhone to be providing value, so demand will drop. Apple has some room to cover costs with price increases, but it's limited.
If the good costs more to make than the buyer is willing to pay then there is no price because there is no sale, so clearly price depends on cost. Functions can have more than one input.
The realist sees the exhorbitant privilege of paying China paper dollars in return for a shipments of iPhones won't go on forever.
When that happens it will be the American workforce clamouring for sweatshop jobs to put food on the table.
Just sayin'.
“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”
The rationale for doing a startup in Silicon Valley is that everything you need is right there in Silicon Valley with you. Apparently, parts of China are turning into the Silicon Valley of manufacturing.
This is probably the most insightful comment in the thread. Beyond the working conditions, which add a significant cost advantage, the integration and proximity of factories is a massive benefit which is very costly to replicate.
Massive economic benefit, yes, but also a massive ecological disaster, as anyone who has experienced the smog around manufacturing centers in China could tell you just by seeing the impact with the naked eye (and feeling it in their reduced-capacity lungs).
China's version of the CDC is currently advising people in Beijing to stay indoors because the smog is so bad.
Indeed, but it will take much more to change China's ways. Until pollution becomes a risk to human life that takes an obviously shocking immediate toll the Chinese will not do anything about their pollution. Even then, given their huge population, problems are more likely to be swept under the rug (employees sent home to die, etc.).
So change due to environmental concerns is a long way off.
What I take out from this article is that a company like Apple creates work for some 763 thousand people worldwide.
That's mind-blowing. 763 thousand people working together to produce my macbook pro, my iPhone, my iPad. 763 thousand people earning a living because of Apple. Seven hundred and sixty three thousand.
My business currently employs 3 people full time, including 2 founders. We're looking to hire some more in the next year, but we have a long way to go.
Most people seem to be focusing narrowly on wages and worker conditions, which is not the main point of the article-- even if you take wages out of the equation, China is now much better positioned for production. The whole supply chain is nearby-- vast majority of high-tech electronics are made in asia (Taiwan, Japan, Malaysia etc), everything else in China itself. To make even one component in the US would require shipping it to China for assembly, which would introduce a lead time of weeks, whilst still costing more. There is a lack of mid-level (degree > x> HS) skilled workers (engineers) in the US, many in China. These are bigger problems for US manufacturing than the costs alone (labour costs aren't a huge portion of most manufacturing).
the take-away is that American companies can be, and are, very competitive in some areas of manufacturing thanks to automation. But automation requires a relatively small number of these high- and mid-skilled workers to design things and operate machines. the layer below them - when, for various reasons, they are even still employed in the US - doesn't earn enough to make middle-class (they earn 10x Chinese workers, but that's not enough for a home even in low cost areas such as S. Carolina).
How many of you would like to work in dormitories at your employer, be called up to start a 12 hour shift within a moment's notice be given nothing but one biscuit and a cup of tea to last you through that shift? Maybe you'll do it for your own startup, but I don't think any of you would do it for an employer.
The reason why Apple manufactures in China is because workers have no rights -- and with that comes unmatched labor flexibility and rock bottom prices too.
It's not US competitiveness that is the issue here -- it's China's lack of human rights.
I've worked on a remote mine site in Australia before. Single workers are housed in dorms built by the employers. These have cooks and cleaners. We have regular hours, but if there were to be some urgent work, we would be expected to get our act together and get things done. (The only point of difference is we get paid overtime).
I'm not so sure we should even aspire to train our future workforce for these jobs. Robotic workers are slated to supplant some of the most complex manufacturing tasks currently executed by humans. By the time our manufacturing force is primed to take on these jobs, we may find that they no longer exist.
As a side note, I think it's interesting that at a time when Americans are clamoring for more employment, they are simultaneously emptying their wallets for iPhones in record numbers. Somehow, despite the ailing economy, Americans can find it in their hearts to lift poor Chinese workers out of poverty.
But robots are not good enough (way worse than human) to adopt to new jobs. It takes lots of time to reconfigured or reprogram robots to do new jobs. Human are very good at adopting and reconfiguring to new environment and new challenge.
It will take a long time for robots to get to that level.
Most of the perceived value of an iPhone is in the design and marketing.
But surely the employment value of an iPhone is still largely in the manufacturing. How many employees at Apple do you think is directly involved in the design and marketing of it?
Versus the number of Foxconn employees building it?
Those jobs couldn't exist in the US. The article said Foxconn has 200,000 workers assembling iPhones. The average wage for a factory worker in China is ~$200 (according to a quick Google search). That's $40 million per month, now move those employees to the US and it's going to cost around 20 times that.
Close to a billion dollars a month to employee an equivalent number of US citizens. The iPhone couldn't exist at those prices.
i think you didn't read the article? They cited a study that claimed that since the majority of iphone cost is materials and logistics, making it in america would only add $65 to the production cost of a single phone.
But the real barrier is that making all the screws, the gaskets, etc, is all overseas and it would be prohibitive to have to ship those raw materials.
And sure, to make ALL those things -- American all the way down -- would be quite expensive. But nobody is advocating for more american factories making screws.
> making it in america would only add $65 to the production cost of a single phone
This is false. Making it in America would remove $65 (if that was indeed the figure, which is very doubtful) from the profit of the device. The price wouldn't change. Product pricing has nothing to do with the cost to make it, but is instead whatever the market will bear.
Why worry about Chinese workers making iPhones, eventually robots will be making them anyway.
Yep. When people complain about losing US manufacturing they are really complaining about losing US manufacturing jobs. Sure, manufacturing output is growing in China, but it's also still growing in the US. Automation is what has killed the US manufacturing job and not offshoring.
I don't know why you see is workers living in dorms as being disgusting.
You have to compare these people against waiters who only make money when customers tipped enough, or stitched together two or three jobs back to back. These people have no leverage against small business owners. FoxConn workers may threaten suicide, the waiters in the US knows that suicide is not going to make an iota of difference to the bosses.
At FoxConn, workers earn enough to have money left over for savings. Can you honestly say that for the minimum wage hourlies you see everyday but care to ignore?
The fact is - as reported - even if the Apple or Corning wished to build the factories in the US, the center of gravity of manufacturing has moved to Asia. It is very difficult to shift. Structurally, the manufacturing world has changed. It is very the same reason why other countries struggle to reproduce Silicon Valley elsewhere, or build a new financial center outside of New York.
I've worked at a lot of jobs where people have on-site company-provided housing; it's common in defense, oil and gas, mining, etc. in remote areas.
Depending on how it's done, I have no problem with it. It's definitely better if you're a high-paid worker than someone who might end up borrowing from a company, doing the company store thing, etc. which caused so many problems with labor in the past.
In a lot of cases, the housing is contracted out to specialist "man camp" providers, who run the entire facility and charge a per-resident rent to the employers. This probably removes a lot of the perverse incentives.
It's a great way to save on housing, commute, etc. if you're single/don't have a family. A lot of older people would maintain a home elsewhere and then do 2 weeks on, 2 weeks off type shifts, which doesn't save as much money, but does make work a lot more efficient.
Corporate apartments, dorms, etc. wouldn't be unreasonable for someone doing a startup or tech company in a place where rentals are inefficient -- it's pretty easy to rent an apartment and have some roommates in silicon valley, but if you were doing a startup in a rural/suburban place where people usually bought vs. rented, maybe the company should work something out for them.
I lived in a company-provided mining quarters for a few years. I see no problems with dorms at all. A lot of readers tend to think about slavery because it makes them feel better about America but the reality is that structurally US could no longer execute this way. In particular, the old issues of class warfare that drives union rules as well as management techniques are outmoded and calls for some fresh thinking.
The US used to have worker dorms (actually, more like company towns) back in the day. They often forced people to shop in company stores and otherwise exploited them. I don't know if that's happening in China--I have yet to read allegations of that--but it's one thing I wonder about, given the historical precedent. With long shifts like that, it's not surprising that they want to keep workers close. So it could be a good thing or a bad thing depending on whether and how they're taking advantage of the arrangement.
It isn't like that. Chinese factory workers are very mobile, as evidenced by the 20% year-on-year wages growth.
I recall an article on FoxConn that said they couldn't find enough local suppliers to produce enough eggs for their employees (Wikipedia said 800,000) that they started their own farms.
The reason people lived in dorms is not very different to why I lived in dorms when I worked on a mine site in Australia. A minesite needs to be where the ore is. Similarly, the FoxxConn factory needs to be close to where all the other manufacturers are.
The workers are usually from out of town. America already employs alot of people who live away from their families too. You run into them every day. They are the maids, the cleaners, the people who work in restaurants, the fruit pickers. Some of them only see their wifes/husbands/children once a year.
It's odd for them to go back and forth between claiming that the US lacks the skills required and talking about a Chinese iPhone factory where thousands of workers hand assemble components during a 12-hour shift they suddenly started at midnight. The average factory job is not rocket science and the average factory worker learns what they're supposed to do on the job.
The problem is the ecosystem. Those low-paying slavish jobs support the next layer of skilled middle-class engineers and infrastructure. If there is no manufacturing in the USA there is no need for manufacturing process engineers. As the article said, even material suppliers like Corning have to locate their manufacturing nearby to be responsive to orders and save money on shipping costs.
Right, but it all boils down to having an army of cheap workers in the end. That feeds everything else, because we still don't have manufacturing robots that are as adaptable as humans for cases where you would have to retool your whole line on the fly.
Basically, I think the Chinese have it a lot worse than the US with respect to safety, but that some things are exactly the same in both countries.
I would also note that, right now, it's possible that Foxconn is one of the best factories in China, simply because they're under scrutiny. So on one hand, it's quite possible that someone will be able to point out that they're being unfairly singled out.
On the other hand, conditions are still bad and one might hope that the scrutiny focused on them will force them to improve. Hopefully other companies will follow suit, but I doubt they'll do so without coming under pressure.
The part about Eric Saragoza (the guy who worked for Apple in Elk Grove 10 years ago) was interesting. He was at a level of education that could have given him opportunities to work his way into middle class maybe 20-30 years ago. But why did he have 5 children? This may seem harsh, but that seems like a foolish decision. Why would he decide to support 5 more people?
Well having children is just about the most fundamental thing we are driven to do besides keeping ourselves alive. Additionally he probably felt he had a good job with a good company and that things would work out.
There is an excellent book "Poorly Made in China: An Insider's Account of the China Production Game" by Paul Midler [1] for those who want to know more about behind-the-scenes of China's manufacturing.
How awesome! The key to success in device manufacturing is: 1) treat your employees like animals (or worse) 2) get the host government to subsidize the endeavor under threat that you'll move your business to a more accommodating country and 3) have a deep disdain for the responsibility of corporations to do anything but make as much money as possible.
Apple is certainly not the only company that does this but they've certainly made a fine art of it. This is simply grotesque. Society created corporations (though there appears to be some debate about this) because it was thought that limited liability would make us better off, you know - more, better stuff. Corporations clearly feel that they have some inalienable rights and those include screwing the societies that enabled them if it means making another buck. This is vile and sociopathic.
If a corporation does not serve the best interests of the society that enables it, that corporation should be terminated.
> Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products.
I wonder, if Apple attempted to work most of those jobs in a western system, how many total jobs would there be? I'd have to think less.
As bad as this may seem, I see this sort of globalization as a good thing, because the total overall number of jobs is probably higher. (A job, meaning a steady paycheck, and not rural poverty.)
In the end, more jobs = fewer serious problems. I'd have to think, though, that you'd need to take care that you don't lose job counts. Western countries probably need to worry about that a bit more. I don't see how it can be done without more education and training.
FTA: "However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays."
The plant sophistication there in China is staggering: workers are not treated well, but the factories, infrastructure, and processes are state of the art.
Now, I know I might downvoted (because this is quite touchy subject) but I do want ask this question:
If US does not have sophistication, talent, and infrastructure to make production of iPhone, then how US armed forces can maintain its world's dominance?
This is in relationship to the story about drone begin hacked and down in Iran: it seems to me that US armed forces probably do not even know what they don't know.
So a common mis-conception is that US manufacturing is in decline. This is empirically not true - the BLS Manufacturing index has been rising over the past decades and continues to rise today.
What is falling is manufacturing employment. This is due to a combination of rising labour productivity and a jump up the value chain (which produces fewer, more sophisticated products).
Regarding arms, the US is the largest arms exporter. And it is all built here. That's not just because of export regulation (ITAR), but because that precision manufacturing basically only exists in the US, Schweiz, Sverige, Deutschland, and Russia (plus a couple more).
This is very true, repeated often by economists, but nobody listens.
It's so ironic this is so often pointed out, since the reality (increasing marginal revenue product of labor) is indicative of something good, not bad.
Technology has certainly already disrupted a lot of industries and increased the marginal revenue product of labor (and lowering the number of people employed), and I think we are just getting started. At some point, if we aren't there already, we are going to be in a situation where our long-term labor needs are substantially less than the supply.
In a sense, this is a good thing for our society overall (and very good for the capital-owning segment of society), but what about those whose labor isn't needed? We're not too keen on paying people to not work.
I'm certainly not advocating a Luddite inspired revolt against technology or remaining inefficient for the sake of keeping people employed, but those who argue that the reduced need for labor is all rainbows and unicorns often fail to account for the human element of the labor equation.
That endgame supposes there is a finite space of possible things to do which machines will eventually have an absolute advantage over.
My belief is that it is more likely that as we leverage human ingenuity more with machines, that ingenuity, alongside artificial intelligence, will be freed to pursue greater things. Simply projecting time is correlated with mechanization with is further correlated with job supply decay to Pluto may not be valid.
I do not, at the same time, see a future for un-skilled or semi-skilled labour.
The U.S. probably does have the sophistication, talent, and infrastructure to make the iPhone, if price was no object.
For things that are economical, which mostly means low ratio of employee-hours to value of the finished product, the U.S. does a reasonably good job manufacturing them, which is why U.S. manufacturing output by value is the highest in the world.
China actually imports a substantial amount of the machinery it uses in its factories from U.S. factories, which are fairly competitive in the meta-factory category of building industrial machinery for use in other kinds of factories (China annually imports about $20b in industrial machinery from the U.S.).
India is already getting too expensive. The Philippines is the hot place now, but wages are rising quickly there also. Companies could start to look to Africa, but the corruption and lack of a government in many of the countries makes that a tough move.
What will happen is as wages rise more and more work will simply be automated. Factories will be built where they most geographically make sense (close to components, raw materials, customers, etc...)
Expect to see mini silicon valleys of manufacturing pop up much like what happened in Detroit with automakers and part suppliers during the hey day.
Also, saying they aren't coming back is ignoring that they never really left. US manufacturing is still growing strong, and the main reason long term for more new factories to not be built in the US will have to do with the EPA more than labor wages.
There is no major white label producer in the US like Foxconn.
All the major manufactures of hardware have shops in the US. IBM in New York, Intel in Arizona and Oregon, AMD(back when they did that kind of thing) in Texas, etc, etc. Saying the US lacks sophistication and talent says more about them than it does about the US.
Why doesn't Apple assemble iPhones here in the USA? It's all in the economics. Cheap skilled labor, fast and easy access to components, unregulated work conditions - none of this is possible in the USA.
A long article that does little to provide any insight into how we can solve this problem.
FTA: "A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.” """
If that's the sort of existence we'd have to face for bringing those jobs back to the US, I'm not sure I could envision many Americans doing it – and, I, personally, couldn't expect that sort of availability and devotion.
I'll even go so far as to put my own moralistic spin on it – if that's the cost to humanity, I don't want my iPhone made more cheaply... but that may just be me.
Having worked a 12 hr shift in a tire factory I can tell you the only thing that would have to happen is the pay would have to meet American standards. I am not sure Apple is willing to pay that much when slave labor is available elsewhere.
I've only ever been able to think of two directions we can go in.
We can strip away pensions, insurance, environmental regulations, unions, OSHA, and every other advantage the U.S. workforce retains. Or we can add some friction to offshoring and free trade.
The former approach means that we'll lose our stronger buying power and eventually become a less attractive market. The latter means there's less profit to be made and we'll become a less attractive market.
I personally favor the latter approach because retaining our buying power means we're less likely to be shocked by rising energy and food costs down the road, fewer people will be injured and out of work in a system with no safety net, less garbage and pollution gets pumped into our environment, etc.
But right now it feels like we're going halfway down the former road, chipping away at our workers' infrastructure while still remaining uncompetitive on the world market... and continuing to reduce friction on trade.
Sure, ununionized labour would be more employable, but these would be lower-class jobs, not the middle-class jobs that the west of today was built on. Nobody’s going to be able to support a family at middle-class standards on $10-15 an hour.
For some reason, the broader socioeconomic discussion the western world should be having has been condensed to creating jobs. But jobs aren’t a binary thing; and they’re means to an end, not the end goal (an equitable society in which the average person can be a member of the middle class).
The article said that most of the high value componentry came from Germany, Japan and Taiwan. I'm not aware of these people working under slavish conditions. Could it be that the US companies don't have sufficient technical edge?
Um, 'middle class' is squarely in the $10-15/hr range in the US today. That's about $25-30k per parent, with 2 working parents. That's 'average' in most of the US.
I’m not in the position of supporting a family, but is that really enough to support a mortgage, car(s), daycare (if we’re assuming both parents are working), putting kids though university, buying supplementary insurance, etc?
I get the sense that “average” is no longer middle class unless you really loosen the definition of middle class.
US manufacturing output has never been higher; the US is not losing manufacturing capabilities. We're losing jobs. We're hiring fewer people and making more product value than ever before.
Essentially, employee wages and production control (by compelling arduous hours upon workers) wins out en masse. The free market system is what it is, and this is what it leads to. Jobs will go to whoever can do them cheaper, better, faster. I don't know much about "better", but cheaper and faster is definitely an advantage to the Chinese people.
To be fair though, if we honestly believe that everyone's life is of equal value, then should the work not go to those who need it most? Those who live in countries where a factory job is the height of what they can hope to achieve? It's our obligation, as those who have the opportunity, to pursue the jobs that aren't available to the world's starving people.
Off the top of my head, around 500k-1M people are now involved in developing phone applications. This is a whole industry that did not exist 5 years ago. American economists would rejoice that as a nation, the US is getting involved in higher value proposition jobs at the expense of losing commoditized, low-barrier-of-entry work. Of course, the measurement of human suffering to by those who cannot or will not transition gets lost in the shuffle.
I always assumed that the job trend would work its way back to the US when automation trumped the masses in factory labor. The problem I see is that we are not doing enough to get ourselves ready for the next generation. Our school systems have been stripped down and do not have enough of the sciences or vocational studies that would allow people to get interested in engineering.
With automation, many of the jobs won't come back with the factory. There will be a few highly-technical positions for the engineers that set up the plant and keep it running, but for the most part it's like building a datacenter as mentioned in the article - $500 million for ~100 jobs.
The jobs aren't coming back. That doesn't mean manufacturing won't come back.
Fully automated production in the US seems more viable than manual labor in the US. Perhaps it will be more viable than manual labor in other countries as well.
I'd be curious to hear from anyone who has experience in this area if that is likely?
New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
OK, that is not flexibility and manufacturing know how. That is too much power in the in the hands of the job providers.
As jobs continue to grow eventually even China will start to go short on workers and then things will start to change.
But then other countries will impose tariffs on US exports, thus reducing demand for US-made products. And since there are more of them than us, it'll hurt us in the long run. For instance, Airbus, over in the free-trade EU, will probably poach all the airplane orders that Boeing could have filled.
If you're building glass, or gaskets, or tiny screws, or LCDs, you want your factory to be in China next to the iPhone factory so the parts can arrive as quickly as possible. If you're building iOS, you can just upload it to the factory from California with comparable delay.
Until your manager decides three other programmers from China or India could output a larger quantity of serviceable code for half your wage. And the drop in cost nets him a bonus from his bosses. Until they offshore him, and only need translators to run their company.
The brief mention in the beginning of the article about Chinese government subsidies allowing the Chinese manufacturers to offer better pricing options than even their cheap labor force should allow is the key to their success. The government is taking an active interest in promoting this industry.
So what I read here is that because Americans desire more normal lives than having to get up at midnight with a pastry and coffee to meet a last-minute design decision, that work should not be in America.
Quintessential Jobs, if you ask me. And not the way a world economy should be run.
The consumer electronics business has become an Asian business.
And of course, when people in the '70s and '80s complained about Asian companies dumping TVs and memory chips in the US, they were denounced as anti-free-trade. And this is the result.
I don't agree with Jobs comment (to Obama, as quoted in the article) that the Chinese build higher quality products. The recent Apple products I have owned all start having hardware failures after the first year, and are completely broken down within 3 years. Japanese and Taiwanese laptops I have bought, which have similar hardware and similar price, simply do not have the same quality control problems, nor did the older Apple products I owned that were made in California.
It's entirely an issue that Apple can make more profit per product by making low quality computers built by virtual slave labor in China with no enforced environmental laws. This works for them because they have managed their brand well, particularly with Ives lovely case designs. Certainly not because the electronics and quality is better, it just isn't.
"The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day." The massive scale of Foxconn really hit me when I read the amount of food served is measured in TONS per day.
I wish it were reasonable to suggest that a company perhaps NOT set it sights on maximizing its profits at the expense of all else about society's infrastructure.
“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”Companies and other economists say that notion is naïve.
Anyone find the Apple position to be the naive one. You can't sell luxury goods to peasants. Every employee at crap wages is one less potential customer.
When President Obama asked Steve Jobs why iPhones can't be made in America, he replied: "Those Jobs aren't coming back."
Companies no longer feel an obligation to support American's workers. Apple feels that to design one of their products with the highest quality - that it has to be manufactured in China. There is no other place in the world that can scale up (millions in weeks) while maintaining a very healthy profit margin. The fact of the matter is that the supply chain for high-end and low-end electronics does not touch America in a significant way - it is mostly in Europe and Asia. Even Corning's much touted Gorilla Glass is manufactured in new factories in Asia because that is where the action is.
Even though once Apple marketed about being made in America, that is no longer the reality.
In America, you cannot wake up workers for an emergency production shift at midnight. In China, that is business as usual.
As the pace of innovation quickens (five iPhones in four years), American businesses must rely more on China to compete globally.
> In America, you cannot wake up workers for an emergency production shift at midnight.
This part is not completely true.
There are no workers in dorms that you can just round up, no. But a supervisor can call up a bunch of people and tell them to report in, or they can ask people to stay for another shift after their first one finishes.
It is by no means impossible for people to work 18 hour shifts in America.
It's close enough to true, though, in the context of manufacturing. Extended shifts at overtime rates are not cost effective. And there are no good alternatives. I ran a manufacturing company (granted in California, a very employee friendly state) where everyone wanted to run 4 days of 10 hour shifts, called the 'alternative work week', instead of the usual 5 - 8 hour days. There is a regulatory means for doing this without it resulting in overtime pay. The problem is, the regulations are onerous and full of potential pitfalls and the consequence of screwing it up is that an employee sues 2 years later and all those 2 hours logged over the usual 8 hour max are retroactively deemed overtime and must be paid to the employees. So even though everyone wanted to put in an extra 2 hours each day to get the fifth day off, we couldn't do it because of the risk. In other words, it's not always just about what people are willing to do.
We don't have that in Arizona. They can work the guys 40 hours in two days and not have to pay overtime (they've come rather close to doing this). Also, only working hours count towards the 40: vacation does not. Work through Thanksgiving? Well, that just sucks. Like you say, CA is a lot more employee friendly.
That said, you're right that they avoid OT like the plague. That's what made me speculate that they were already running at maximum capacity and had to do something to boost that for a while. But yeah, it does happen. I've been there to support an 18 hour shift. Not fun.
To be fair, it sounded like Foxconn was at capacity and the 18 hour shifts were more common, but I don't really know for sure. And make no mistake: a shift like that is brutal for anyone who has to stand the whole day.
But yeah, things like that happen in America, too. It usually leads to high burnout unless the workers are desperate. Things like 15% turnover per month are pretty average.
The focus on 12 hour shifts and dorms in China is all dandy, but what does it take to build a factory in the US?
By the time all the environmental reviews and other regulations are observed, and law suits from Sierra Club and others are cleared, there is simply no way to build the factory! Hence no one builds them, hence ...a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
Factories get built in the U.S. all the time. Since there is some amount of competition for them between states, the typical approach is to shop around for a nice deal, where the state/city will usually not only offer to shepherd you through the environmental/approval process, but actually pay for it or subsidize your construction, and give you 10-20 years of tax breaks. Happens with car factories all the time. Even Apple is doing it with the A5 chip manufacturing facility it announced it's going to open in Austin.
That, my friend, is bullshit. Here in Indiana, we have factory space standing empty, thus no environmental review required, even if we had environmental reviews in Indiana, which we fucking don't.
All we require is health care and a working wage - and it's cheaper to let us die.
I also don't think we should.
These jobs, well, suck. They are semi-skilled and are doomed to inevitable automation. The people who work these jobs are treated as chattel right now. When these people rise up and demand to be treated better forcing costs to rise, these jobs will move again to some other desperate country.
If the first world wants to compete better, start certifying products as (human & environment) cruelty free. Label how many children were used to produce the product. Label how many years of life were robbed from people by working on the product because of chemicals. Stick an import tax on any place employing children or harming the global environment. Because straight nationalism isn't going to cut it.