Does Apple have the Power to Change the World?

by Jeff Wiener on February 2, 2012

I’m torn. On the one hand I like my iPhone (I mean I really like it), while on the other hand I can’t ever imagine any of the staff here at Digitcom enduring the working conditions that those along Apple’s supply chain face on a daily basis. So what’s the answer? How do we fix this ethical problem?

Yesterday business mogul Donald Trump weighed in on the issue, challenging new Apple CEO Tim Cook to relocate Apple’s supply chain to America, calling for Apple to pioneer the move towards in-sourcing, that is, bringing American companies’ supply chains abroad back to U.S. soil. But in today’s global economic market is pulling production out of these countries really the answer?

Where Trump is clearly interested in companies like Apple bringing their supply chains to America as a way of boosting a flagging economy, I continue to frame the entire situation in human terms, in a way that helps the Chinese Foxconn workers and helps us here at home, and perhaps its within that framework that a possible solution can be found.

It was a little over a decade ago when the corporate trend of the day was outsourcing, the relocation of many aspects of one’s business, including manufacturing, supply lines, and customer service to other countries where employment standards were lower and employment expenditures could thus be reduced.

The result of such outsourcing was that many companies indeed were able to reduce employment costs and thus increase revenues, although for customers it often meant that a phone call to the customer service department of the company down the street meant a call rerouted to somewhere in rural Asia…but I digress.

For years now the North American consumer has been living in blissful ignorance of the human story behind outsourcing, happy to purchase cheaper gadgets and technology and happy to not have to think about any of the ethical issues associated with how those devices are made. But as enhanced communication brings our global community that much closer together it’s becoming impossible to ignore the impact that our consumer habits have on the rest of the world.

With all that said, though, the question remains, is outsourcing really the problem? There’s no question that companies traditionally outsource because labour is cheaper overseas, with countries like China and India taking hard stances against unionized labour, allowing wages to stay low. So to a degree there’s no denying that the drive to save a buck has created this situation.

In my mind, however, there could be even more damage done if companies like Apple pulled their manufacturing operations out of countries like China entirely, a move that would undoubtedly result in mass layoffs, ending in other human tragedies as well.

Truthfully (and I’m not sure how politically correct this will sound) I think the answer is that we need to start bringing some of our North American employment standards to these other countries, and its here, I think, that Apple could truly be a pioneer. As was stated yesterday, all Apple would realistically need to do would be to demand workers along its supply line be treated better and it would be done. As the NY Times report stated last week, “Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”

Is it all as simple as that? Probably not, but we have to start somewhere.

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Jordan Richardson February 2, 2012 at 7:08 am

It’s a tough spot because China really has the United States over a barrel economically. For an American company, even one as successful as Apple, to tell China how to operate its facilities (especially when American companies have been enjoying the fruits of cheap, dirty Chinese labour for decades well before this Apple scenario came to light) is probably not going to fly. Consider the countless products people buy from China and you’ve got a facility similar to Foxconn behind nearly each one. Apple is but the tip of the iceberg.

Outsourcing is the root of the problem. Not only do the companies that outsource duck out on paying their fair share of corporate taxes in the United States, they duck out on paying fair wages and supporting the construction of fair labour laws. Outsourcing has destroyed the manufacturing hub of Detroit, for instance, and the payouts haven’t been great. The U. S. economy is getting to the point that it is almost entirely dependent on consumer demand, but the shelf life of that concept is incredibly limited if Americans don’t have jobs.

Would the removal of many potentially American jobs result on mass layoffs across China? It’s hard to say for sure, but there’s something somewhat sinister in the argument that it’s better for the Chinese to work as veritable slaves to our consumption than not work at all.

The good news is that China is emerging as the world’s fastest-growing economy and that has helped transform much of the country’s export economy inward. They are starting to realize that they need the poor workers to spend, spend, spend if they want an economy that thrives in the long-term so wages are starting to slowly go up. They are introducing things like universal health care (although with minimal funding thus far) and other benefits. On top of that, the labour pool that generally is called upon to do the crappiest jobs (15-24 year olds) is shrinking. They are also calling out for their rights.

So we may not have to tell the Chinese how to take better care of their workers because the economic demands could do it for them. With more uniform economic growth in the future and less of a dependency on exports to float the economy, Apple and its friends may soon have to start looking for cheap labour elsewhere.

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