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Apple Does Not Need Your Money to Treat Workers Fairly

Posted on Feb 1, 2012
AP / Kin Cheung

Chinese university students, dressed as Foxconn workers, hold mock iPads with a skeleton print outside an Apple shop in Hong Kong.

We’ve learned a lot in the last few weeks about the inhumane treatment suffered by the workers who polish, assemble and build Apple’s iPhones and iPads. Troubled consumers have generously offered to pay more for those products to offset the cost to Apple should it choose to treat its workers fairly, but there’s really no need.

George Takei (yes, that George Takei) is the latest public figure with his heart in the right place to make such a gesture: “Apple can do better, and it should. Even if it means we all pay a bit more for our iPhones and iPads,” he wrote on his blog.

Here’s why Apple can do better without the need for us to pay more for our iPhones: While it pressures suppliers and manufacturers to keep costs to a minimum, Apple has more money than it knows what to do with. The company disclosed in late October that it is sitting on more than $80 billion in cash. And because consumers are willing to pay a premium to own its products, Apple makes huge profit margins on its devices. One firm looked at the materials cost of the iPhone 4s (the latest model), excluding shipping and marketing, and estimated a profit margin somewhere in the 70 percent range, or $546 for every 32GB iPhone 4s sold.

Apple doesn’t directly employ its Chinese workers, but contracts with suppliers and assemblers, like Foxconn, also known as Hon Hai Precision Industry Co. It is Foxconn, with Apple’s tacit consent (Apple claims to have higher standards, but we wouldn’t be talking about this if such standards were implemented), that exploits its workers to the point of driving them to suicide. However Foxconn, which operates in a cutthroat industry and in the last five years has seen profits decline while Apple has doubled it earnings, is motivated by the demands of its best customer. To put things in perspective, Bloomberg estimates Apple’s overall operating margins at 30 percent and Hon Hai/Foxconn’s at 1.5 percent.

How much would Apple lose per iPhone if it paid Foxconn a little more and ordered the manufacturer to let its employees rest after an eight-hour shift, as opposed to working them for 30 straight? Surely not so much that we consumers have to make up the difference. If one of the wealthiest companies in the world can’t be bothered to do the right thing, people of conscience should not bail them out—they should boycott. 

—Peter Z. Scheer

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By michael, February 2, 2012 at 11:41 pm Link to this comment
(Unregistered commenter)

seconded on the Scheer brothers but I just wanted to point out that I saw an
article that said Apple’s profit margin would fall to only 50% vs 65% is they brought
in all production to America.

You know we are losing more than just jobs, we lose future innovations from
workers who find new ways to do old and new things and start their own
companies. Why do you think there are so many wealthy chinese now?

We need to re-industrialize or we die as countries and societies.

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By Laurence Glavin, February 2, 2012 at 4:19 pm Link to this comment
(Unregistered commenter)

While the White House and the Congress were debating whether or not to raise the National Debt limit last August, with the threat of a default by the US Treasury looming, there were reports that Apple had MORE cash on hand than the Federal Government! Something tells me that we could undergo a repeat of this later in the year.

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By John Poole, February 2, 2012 at 2:55 pm Link to this comment
(Unregistered commenter)

Jobs was very clever to attract customers who wanted to consider themselves
discerning and more professional. Buick with their, “Something to believe in” ads
was perhaps an inspiration for Jobs. Apple’s code standards were higher than what
Gates settled on to shepherd to the masses.

The “scandal” with sweat shop labor and Apple suggests most of us will be
trapped as independent contractors within a low ball bid tyranny world until we
rethink many aspects of competition and reward.

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By Robin Adair, February 2, 2012 at 1:57 pm Link to this comment
(Unregistered commenter)

Apple probably could have made just as much continuing to make its products
here in America when you include shipping costs.

Yet like the other idiots who have moved their manufacturing off shore.

They not only pay more for shipping, bribes and kick backs but have hollowed out
the middle class to a point where only a few can now afford their products.

Well done Apple, Nike, IBM etc and all you other off shore pirates!

My advice is not to give ‘em more money in order to screw us over more but to
boycott their sorry asses.

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By UreKismet, February 2, 2012 at 1:35 pm Link to this comment

Cheap labour is one of the great myths about out-sourcing jobs to societies governed by tyrannical regimes.  This is particularly true for tech companies such as Apple.  Don’t get me wrong Apple pay their workers a pittance, but considered in light of the low percentage of labour costs to the wholesale price Apple charges for its products, the cost of labour is a minor component in an expensive product that automates as much of the production as possible.
You see workers are a hassle for corporations everywhere so Apple et al strive to reduce their numbers no matter how little they cost to employ.  Even in Vietnam & Thailand, two countries Chinese corps have outsourced production to, workers need breaks.
Cause ‘asians’ neeed to sleep too. 

They get injured then families have to be paid $100 for funeral costs etc.  Plus all workers can make mistakes, talk outta turn and occassionally take their skills down the road to churn out knock offs of the original product.

Yed, the major corporations who outsourced their production frequently say it is high labour costs in the developed world that are to ‘blame’ for their move but that is just the scam they are running on ordinary peeps.
It is the ability to pollute without hassle, build factories overnight without expensive consent processes, do what they want, that has made societies where the citizens have little say in their destiny, attractive alternatives to rust belt amerika or or smog belt england, much more than the wage bill.
In the meantime those industries that 1%ers own which cannot relocate; service industries in the main, now have labour costs that rival theose in Asia and best of all, every town tries to undercut their neighbouring burgs by giving waivers on polution, health & safety regs, taxes, anything & everything in an attempt to get an employer to base in their town.

But best of all the little sheep only needed to be barked at for a little while by shrub & oblamblam before they willingly peeled back a century plus worth of hard work by the sheep’s less cowardly antecedants and submitted to tyrannical oppression akin to that of the societies which manufacturing was outsourced to.

By all means don’t buy Apple but at least do it for the right reasons ones that cannot be ameliorated by increasing shitkicker pay packets.
Don’t buy Apple because it is just another mega corp owned by the same greedheads who are creating wars, polluting the planet and destroying the many & varied ways of life enjoyed by humans around the world.
Problems that will never be sorted in a couple of PR releases; which is what Apple issues with some success whenever the words Apple & sweatshop appear too close each other in the mass media.

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By MondoBizarro, February 2, 2012 at 12:15 pm Link to this comment
(Unregistered commenter)

Congratulations to the Scheers. Between Robert’s column today and Peter’s the
day before, they’ve identified two of the main tenets of the neoliberal economic
policy that has visited historically unparalleled income inequality upon the
“Greatest Country on Earth”.

Deregulation and globalization are two of the conspicuous emissaries of our
economic slow-poison. As Peter makes clear, Apple could make its products
here in America. Apple could do this and keep their products competitively
priced. They could even continue to enjoy a healthy profit margins. But Apple
didn’t. They chose instead to follow the maxim of the robber barons of the
gilded age: maximize profits.

Note that the equation is not, move your factories to a place where labor is less
expensive in order to survive in a more competitive global market. That’s just a
public rationale. The equations is, move your factories to a place where labor
can be underpaid and protection for laborers is practically non-existent, so that
you can exploit those workers without gov’t/union oversight, all so you can
make a few additional percentage points of pure profit which will then drive
your stock valuations higher. Apple put stock price above all other
considerations, including moral and humane ones. Peter is right - iBoycott!

Reagan was the first. He made it his mission to discipline labor, which put the
decline of the American middle class into motion. But every subsequent
president, including Clinton and Obama have blindly followed the sacred tenets
of neoliberal economic policy. There are currently no viable candidates for
president who even view these policies as a problem, much less propose
measures which mitigate them in any meaningful way.

This the world we live in, the economic soup in which we now swim - or sink.

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By OuPhrontis, February 2, 2012 at 11:28 am Link to this comment
(Unregistered commenter)

Lots of wailing and handwringing over this issue and with good reason. China’s
factory workers face the same sort of conditions U.S. workers lived with until
unions changed everything for the better during the first half of the 20th C. But
all this indignity is entirely misdirected. Apple is a customer of the companies at
fault here. Apple does not own these factories. They do not own stock in these
companies and the abused workers in question do not work for Apple. Apple
does not set production policy and its ability to influence policy is likely limited
to what’s typical in a buyer/vendor relationship. Apple spends millions on
hundreds of annual workplace audits, but again, the conditions workers face in
Chinese factories are little affected by Apple’s efforts to improve matters. Real
change will only come from the Chinese government and from the solidarity of
the people doing the work. This is an old story and it will play out with the same
heros and villains, triumphs and tragedies we in the west experienced from Samuel Slater’s Factories in the early 19th century to Samuel Gompers’ Union-
won improvements 100 years later.

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By Tom Joad, February 2, 2012 at 10:40 am Link to this comment
(Unregistered commenter)

We need to boycott companies like Apple, Verizon, and Walmart, that exploit their workers, offshore jobs, and avoid paying taxes.  They are ruining our country and ruining the lives of those who make their products. It would be great if our politicians would pass legislation to regulate their business practices, but that ain’t happening, so we need to make enough noise and boycott until they can’t ignore us anymore.

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By PeopleOVERgreed, February 2, 2012 at 9:07 am Link to this comment

Without Steve Jobs, Apple will begin to loose its edge. He was obsessively driven and a major risk taker, all of which senior management will avoid like the plague fearful of their compensation package. Jobs had the ability to know what consumers need before consumers wanted what they buy from Apple. Those days are over and Apple will simply maintain the competitive advantage as long as it can to eek out as much share-holder value as possible.

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By Textynn, February 2, 2012 at 1:51 am Link to this comment
(Unregistered commenter)

Apple should be completely ashamed.  They have all this money they are simply hording while all the people that build these products live in horrible poverty.  Im done buying from Apple for good. It’s a disgrace.

We have the same problem in America.  We have companies like Walmart making billions a year.  I guess the Six Waltons have more net worth than the bottom third of the country but you don’t hear leaders talking about the low wages they pay. And in fact, it is taxpayer safety nets that are taking care of these workers that are not paid enough to live on.  It’s a disgrace, a huge misuse of the country’s safety nets, and a disgraceful way to treat workers that make people rich. We’ve been taught to accept this and it has to be stopped. It is the duty of lawmakers to make these companies amassing such great wealth to compensate the people that make it happen.

For too long our leaders and cultures have taught us to accept low pay and get by on safety nets. Then they lecture people about using these safety nets always in the language of abuse and exploitation.  We must demand a stop to this impoverishing and degradation of working people.

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By BillV, February 2, 2012 at 12:23 am Link to this comment
(Unregistered commenter)

China needs a violent revolution. Keep them busy for a while so they aren’t
reigning down death on us circa 2020… Shouldn’t the CIA be doing this shit?
fucking morons, couldn’t strategize and implement a long term subversive
propaganda campaign if they were hemorrhaging Joseph Goebels out their asses.

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By DarthMiffy, February 1, 2012 at 6:00 pm Link to this comment

This article makes a good point. Hang in there, hapless factory workers.
Apple is going to make some changes to save its image, if nothing else.

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By steve warren, February 1, 2012 at 3:58 pm Link to this comment
(Unregistered commenter)

....but of course. have we read the bio on Jobs? the man was an ass. he’d get tickets for speeding, then speed away from the copy. he parked in handicapped zones. genius, sure. but a sociopath.  screw the world. the only thing important is ME.

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By vincenyt, February 1, 2012 at 3:14 pm Link to this comment

Have Apple products really made the world a better place ? It seems that everyone is walking around with their heads in the ‘cloud’ texting, tweeting, listening or surfing. We have lost much of the real interpersonal skills of people gathering in public places. Everyone glued to these devices exists in his own insular world. That is my opinion but I realize there are many benefits these products make available. I just think there are also drawbacks ! The world would definitely be a better place without WalMart !

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By John Poole, February 1, 2012 at 2:55 pm Link to this comment
(Unregistered commenter)

The holy stature of Apple seemed well thought out and implemented. But will the
people who use and worship their products care about the exploitation of cheap
labor overseas? Doubtful.

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