I don’t really know what conditions are like in the factories where Apple’s products are assembled in China. On one hand, you have Apple’s supplier responsibility page. On the other hand, you have suicides at Foxconn factories where Apple products are assembled.
Today I noticed some manufacturing estimates for the iPhone 5. Apple is rumored to have placed an order for 15 million iPhone 5s from Pegatron, a manufacturer with factories in China. Apple sold 18.65 million iPhones last quarter. I can’t help but wonder how much better working conditions would be if Apple spent $5 more per iPhone on labor costs. Apple has at least $60 billion in cash and had profits of around $6 billion last quarter. Spending $5 more per iPhone would cost them less than $100 million per quarter.
I realize that Apple doesn’t set the pay rates in its suppliers’ factories, but of course they can put anything they want in their supplier compliance agreement. They could limit hours per week worked or require manufacturers to offer paid vacation. I wonder what Apple’s costs would look like if they required overseas manufacturers to comply with all U.S. labor laws except our minimum hourly wage?
The excuse has often been made that low margins in the electronics business lead to the poor working conditions in overseas factories. Apple’s margins aren’t low — I’d like to see them do even more in terms of helping out the people who assemble the gadgets we all love so well. And to be fair, I’d be glad to pay a bit more for gadgets if the money were going directly to the people on the assembly lines.
Apple’s labor costs should be higher
I don’t really know what conditions are like in the factories where Apple’s products are assembled in China. On one hand, you have Apple’s supplier responsibility page. On the other hand, you have suicides at Foxconn factories where Apple products are assembled.
Today I noticed some manufacturing estimates for the iPhone 5. Apple is rumored to have placed an order for 15 million iPhone 5s from Pegatron, a manufacturer with factories in China. Apple sold 18.65 million iPhones last quarter. I can’t help but wonder how much better working conditions would be if Apple spent $5 more per iPhone on labor costs. Apple has at least $60 billion in cash and had profits of around $6 billion last quarter. Spending $5 more per iPhone would cost them less than $100 million per quarter.
I realize that Apple doesn’t set the pay rates in its suppliers’ factories, but of course they can put anything they want in their supplier compliance agreement. They could limit hours per week worked or require manufacturers to offer paid vacation. I wonder what Apple’s costs would look like if they required overseas manufacturers to comply with all U.S. labor laws except our minimum hourly wage?
The excuse has often been made that low margins in the electronics business lead to the poor working conditions in overseas factories. Apple’s margins aren’t low — I’d like to see them do even more in terms of helping out the people who assemble the gadgets we all love so well. And to be fair, I’d be glad to pay a bit more for gadgets if the money were going directly to the people on the assembly lines.