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The issue is not about economics, it's about morality. His economic arguments are sound, this is indeed how capitalism works. Apple (and many others) have made

by casca 15y ago

The issue is not about economics, it's about morality. His economic arguments are sound, this is indeed how capitalism works. Apple (and many others) have made a decision to introduce a level of indirection - the Foxconn people are legally not Apple employees, but for all practical intents and purposes, they are. Just like pollution, gross worker exploitation has been largely eliminated in the first world* and has just been relocated to the third world. The question is whether Apple and the consumers who support them should morally continue on their path. * "largely eliminated" does not mean that there is not significant abuse, just that as a percentage of the employed population, it's historically very small

aidenn0 15y ago
If you buy into A) Utilitarianism B) The economic arguments of the article Then the morality question is addressed by this.
brown9-2 15y ago
I think the point here though is that if Apple's consumers don't want to continue on this moral path, they better be prepared to boycott pretty much every other electronic company in existence. It's BS to only point out Apple here.
- jhancock 15y ago
  You can solve this problem by either chipping away at it by targeting one company and pushing forward a bit or by getting the China and U.S. governments to handle it for all. Both approaches are reasonable. You have to start somewhere.
tptacek 15y ago
I don't understand the argument here. If the issue is morality, then an effective boycott of Apple products harms Chinese workers, because nobody is working at Foxconn instead of some better latent opportunity in the Chinese economy. If Apple paid workers the prevailing wage for US skilled labor, Apple would not be paying workers in China at all, because the discount on labor is the primary reason it outsources to China. One looks at the spread between Apple's COGS and Apple's list prices and wonders how it can be reasonable that Apple captures that whole spread. But that's why we have markets: over time, wage pressure erodes Apple's margins; Foxconn (or comparable companies) obtain better clients, or are simply forced to increase their cost because of competition from other firms. When Apple responds to that pressure by finding another third world country to buy from, it's simply repeating the same process in that country: unless they source forced labor from Myanmar or North Korea, the only way they can get labor is by improving the wages that were already available in that country. Part of the issue here seems to be the (unreasonable) expectation that one company can fix third-world rural poverty instantly. Improving the lives of millions of people in Asia is a process that will involve many, many countries and take many decades.
- dasil003 15y ago
  > Part of the issue here seems to be the (unreasonable) expectation that one company can fix third-world rural poverty instantly. I think you've hit the nail on the head here. It's easy to hate big corporations, but even if you make the argument that they are exploiting workers, what are the alternatives? If Americans truly have a moral responsibility to improve Chinese lives, then actually what is necessary is a foreign policy that directly aims to level the playing field between the countries. It might be something effectively akin to an international progressive tax, I don't know what form it would take, but the point is that Americans would never stand for this. People are already complaining daily about losing their jobs to overseas workers, and the entire culture—both cultures I believe—are based on competition. Corporations are just a handy scapegoat to assuage our liberal guilt.
- nekojima 15y ago
  "One looks at the spread between Apple's COGS and Apple's list prices and wonders how it can be reasonable that Apple captures that whole spread." Because COGS is what Apple pays Foxconn (and other manufacturers) to produce those items. Foxconn and the others make their profit (or loss) from the contracted amount paid, which is roughly, though not always, COGS. It is far more likely Apple would contract factories in Vietnam and Indonesia than in Burma or North Korea to product items, as forced labour is a poor source of quality manufactured goods.
- MartinCron 15y ago
  an effective boycott of Apple products harms Chinese workers The very threat of a boycott will put yet more pressure on Apple to at least appear to improve the conditions while still employing factory workers.
- cdavid 15y ago
  A boycott may be effective to improve working conditions. The difference between a US factory and a foxcon factory is not a binary thing: surely, nobody would argue that increasing the wages of those workers of say 0.0001 % will make their situation worse. Would 0.01 % ? etc… How much would it cost Apple to make sure they can use alcohol instead instead of n-hexane ? So while it is indeed not feasable to have working conditions similar to the West from day one, it certainly is to improve their conditions. If it ends up costing less to Apple than the PR issue of not to, Apple will do it. Also, the article that was everywhere last week showed how the advantage of Chinese factories was not just low wages, but a capacity to get a new production line in no time. This pust those factories at an advantage, and gives them a large bargaining power. I would not be surprised that this kind of advantages will actually be used as a bargaining chip by some chinese local gvt to force Apple to contribute to working conditions improvements. Because Apple cannot produce ipods tomorrow in Vietnam.
gavinlynch 15y ago
If an alien descended to Earth and offered me a job for $40,000 a year, and I was barely scrapping by as a part-time employee at a coffee shop. I'd probably take that job and be incredibly grateful. Got a solid gig. Rock on. If I later learned that the alien's race on average makes $50,000,000 a year, and that $40,000 was something they give their children in allowance... Would I feel exploited? No. Would I think, "wow I'd love some of that", probably. But because the salary I make earns me a living relative to those around me, I really wouldn't see the issue. I think you are ignoring the economic context. And no, Foxconn employees are not, for all intents and purposes, Apple employees. That's kind of absurd to say. If Foxconn employees are essentially Apple employees, then hell, so was I. In a previous job, I worked for a company that supplied services to Apple... I guess I should have demanded a higher salary, and that would probably look nice on my resume. Maybe I'll add it.
darasen 15y ago
Really it is closer to moral relativism. The employees of Foxconn are better off than many many of their countries citizens. These employees have food shelter and (it would seem) a better than average wage for where they live. Certainly there is room for improvement as stated in the Forbes article. Conversely most of us in the US have never volunteered at a homeless shelter or soup kitchen. Most people ignore the man at the street corner or maybe throw a couple dollars his or her way. Most people do not think about the Salvation Army (who served 59.9 million meals to the needy in 2010) unless they are trying off load some old junk or hear the bells near Christmas time. Point being that there are people in our own cities far more needy than these Foxconn employees. Yet, I have witnessed first hand people who make an anti-Apple "morality" complaint with out ever lifting a finger for those in need. That is what I call immoral. -Sorry for the soapbox, not directed at any poster.
- icebraining 15y ago
  How has it anything to do with moral relativism?

by casca 15y ago

aidenn0 15y ago

If you buy into A) Utilitarianism B) The economic arguments of the article Then the morality question is addressed by this.

brown9-2 15y ago

I think the point here though is that if Apple's consumers don't want to continue on this moral path, they better be prepared to boycott pretty much every other electronic company in existence. It's BS to only point out Apple here.

jhancock 15y ago
You can solve this problem by either chipping away at it by targeting one company and pushing forward a bit or by getting the China and U.S. governments to handle it for all. Both approaches are reasonable. You have to start somewhere.

tptacek 15y ago

I don't understand the argument here. If the issue is morality, then an effective boycott of Apple products harms Chinese workers, because nobody is working at Foxconn instead of some better latent opportunity in the Chinese economy. If Apple paid workers the prevailing wage for US skilled labor, Apple would not be paying workers in China at all, because the discount on labor is the primary reason it outsources to China. One looks at the spread between Apple's COGS and Apple's list prices and wonders how it can be reasonable that Apple captures that whole spread. But that's why we have markets: over time, wage pressure erodes Apple's margins; Foxconn (or comparable companies) obtain better clients, or are simply forced to increase their cost because of competition from other firms. When Apple responds to that pressure by finding another third world country to buy from, it's simply repeating the same process in that country: unless they source forced labor from Myanmar or North Korea, the only way they can get labor is by improving the wages that were already available in that country. Part of the issue here seems to be the (unreasonable) expectation that one company can fix third-world rural poverty instantly. Improving the lives of millions of people in Asia is a process that will involve many, many countries and take many decades.

dasil003 15y ago
> Part of the issue here seems to be the (unreasonable) expectation that one company can fix third-world rural poverty instantly. I think you've hit the nail on the head here. It's easy to hate big corporations, but even if you make the argument that they are exploiting workers, what are the alternatives? If Americans truly have a moral responsibility to improve Chinese lives, then actually what is necessary is a foreign policy that directly aims to level the playing field between the countries. It might be something effectively akin to an international progressive tax, I don't know what form it would take, but the point is that Americans would never stand for this. People are already complaining daily about losing their jobs to overseas workers, and the entire culture—both cultures I believe—are based on competition. Corporations are just a handy scapegoat to assuage our liberal guilt.
nekojima 15y ago
"One looks at the spread between Apple's COGS and Apple's list prices and wonders how it can be reasonable that Apple captures that whole spread." Because COGS is what Apple pays Foxconn (and other manufacturers) to produce those items. Foxconn and the others make their profit (or loss) from the contracted amount paid, which is roughly, though not always, COGS. It is far more likely Apple would contract factories in Vietnam and Indonesia than in Burma or North Korea to product items, as forced labour is a poor source of quality manufactured goods.
MartinCron 15y ago
an effective boycott of Apple products harms Chinese workers The very threat of a boycott will put yet more pressure on Apple to at least appear to improve the conditions while still employing factory workers.
cdavid 15y ago
A boycott may be effective to improve working conditions. The difference between a US factory and a foxcon factory is not a binary thing: surely, nobody would argue that increasing the wages of those workers of say 0.0001 % will make their situation worse. Would 0.01 % ? etc… How much would it cost Apple to make sure they can use alcohol instead instead of n-hexane ? So while it is indeed not feasable to have working conditions similar to the West from day one, it certainly is to improve their conditions. If it ends up costing less to Apple than the PR issue of not to, Apple will do it. Also, the article that was everywhere last week showed how the advantage of Chinese factories was not just low wages, but a capacity to get a new production line in no time. This pust those factories at an advantage, and gives them a large bargaining power. I would not be surprised that this kind of advantages will actually be used as a bargaining chip by some chinese local gvt to force Apple to contribute to working conditions improvements. Because Apple cannot produce ipods tomorrow in Vietnam.

gavinlynch 15y ago

If an alien descended to Earth and offered me a job for $40,000 a year, and I was barely scrapping by as a part-time employee at a coffee shop. I'd probably take that job and be incredibly grateful. Got a solid gig. Rock on. If I later learned that the alien's race on average makes $50,000,000 a year, and that $40,000 was something they give their children in allowance... Would I feel exploited? No. Would I think, "wow I'd love some of that", probably. But because the salary I make earns me a living relative to those around me, I really wouldn't see the issue. I think you are ignoring the economic context. And no, Foxconn employees are not, for all intents and purposes, Apple employees. That's kind of absurd to say. If Foxconn employees are essentially Apple employees, then hell, so was I. In a previous job, I worked for a company that supplied services to Apple... I guess I should have demanded a higher salary, and that would probably look nice on my resume. Maybe I'll add it.

darasen 15y ago

Really it is closer to moral relativism. The employees of Foxconn are better off than many many of their countries citizens. These employees have food shelter and (it would seem) a better than average wage for where they live. Certainly there is room for improvement as stated in the Forbes article. Conversely most of us in the US have never volunteered at a homeless shelter or soup kitchen. Most people ignore the man at the street corner or maybe throw a couple dollars his or her way. Most people do not think about the Salvation Army (who served 59.9 million meals to the needy in 2010) unless they are trying off load some old junk or hear the bells near Christmas time. Point being that there are people in our own cities far more needy than these Foxconn employees. Yet, I have witnessed first hand people who make an anti-Apple "morality" complaint with out ever lifting a finger for those in need. That is what I call immoral. -Sorry for the soapbox, not directed at any poster.

icebraining 15y ago
How has it anything to do with moral relativism?