What does Apple owe it’s workers? I’ve read some silly proposals since the big New York Times story on the difficult and sometimes dangerous conditions in it’s factories. For instance, the idea that Apple should give some of it’s massive cash horde to workers in China. But Apple and its shareholders don’t owe these workers anything, and they certainly haven’t taken anything from them. In fact, in operating out of self-interest they have helped bid up the wages of the workers there. It is profit seeking by corporations, and not their charity or generosity, that has and continues to greatly improved the lives of the global poor.
Since Apple is already giving so much to the workers of China as a byproduct of self-interest, why of all the charitable causes they could spend their profits on should they decide to use them on workers in China who are relatively well off compared to the rest of China? People in China are clamoring for jobs in Foxconn, why should Apple provide charity to the relatively lucky ones who have jobs already? This is to say nothing of the extremely poor in many areas of the world. This also makes the questionable presumption that it is corporations rather than shareholders who should be engaging in charity.
The most positive thing you can say of the criticism of Apple is that there are probably some margins where more safety, health, and working conditions can be achieved at a relatively low-cost, and that by being profit motivated Apple is likely to press it’s supply chain to find these least-cost improvements. If anyone is going to find welfare improving changes to make, it will be them and not regulators or other government entities.
The most negative thing you can say is that this whole incident creates the false appearance that, once again, Apple and other multi-national corporations are doing something wrong when in fact they are having an extremely positive impact. Public opinion isn’t a nuanced thing, and the general perception here does not seem to be of a tremendously good process that is doing a lot for the global poor, but could perhaps be slightly improved on the margin, but more importantly should not be significantly impeded. Instead we’re seeing guilt, shame, and outrage directed broadly at Apple, globalization, and ourselves.
Another risk is that public outrage pushes Foxconn and other manufacturers to replace workers with robots faster than they would if they simply were minimizing costs. There is nothing wrong with mechanization per se, and it is in many cases inevitable. But mechanization is a good thing because it is cost minimizing and productivity enhancing, if done on the margin for PR it lacks it lacks that benefit.
Arguments like I’m making here spur a lot of righteous indignation, and complaints that I and others who refuse to scream that something must be done are uncaring and we simply place no value on the lives of the Chinese. I’m afraid these people don’t even understand what the disagreement is about. Or as Paul Krugman once put so aptly:
Such moral outrage is common among the opponents of globalization–of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.
But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.
Trust me: I really don’t care that much about paying a little more for my Apple products, just like I doubt Paul Krugman cares about paying a little more for his sneakers. I also value the welfare of the workers of China very highly. More highly, it would seem, than those who constantly call on politicians and corporations to “bring back our jobs from overseas”, and complain about outsourcing. Those who would paint this disagreement as being between those who care about poor foreigners and those who don’t are either lying of confused.
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Friday ~ February 3rd, 2012 at 9:10 am
anon
Adam, you are missing the finer point yourself.
The problem is that poor working conditions and no democracy in China are coupled to poorer working conditions and less democracy in the U.S.: US workers either accept more abuse or are out of the job.
As such China is exporting dictatorship to the US, both at the workplace and in politics. It is in the self interest of the majority of US citizens to vounter-balance that.
Friday ~ February 3rd, 2012 at 10:13 am
rjs
jon stewart blew the whistle on foxxconn before the NYT did, if anyone missed it:
http://marketwatch666.blogspot.com/2012/01/get-your-kindles-iphones-ipads-xboxes.html
Friday ~ February 3rd, 2012 at 10:16 am
Exasperated
My father worked for a company which did a lot of business in South Africa during the apartheid years. He traveled there extensively and said many a time that it was his favorite place to visit. (This is coming from a man who visited more than fifty countries and six of the seven continents over a forty year career.)
After one of his visits, my sister, then a very promising young Progressive who was horrified that my father liked going to South Africa, wrote an impassioned letter to the editor of the local paper, which also happened to be the paper of the city in which the company’s headquarters were located. Although it was more-in-sorrow-than-in-anger – my sister’s not a hysterical type – the focus was clearly that it was just wrong, wrong, wrong for this company to be supporting the vicious, evil regime which ran the place.
The COO of the company took the extraordinary step of writing a letter to my sister setting forth some of the financial details of the company’s business in SA. I forget the details, but in essence, about 90% of the company’s disbursements there went directly to its work force, and the company had a facility outside the city and employed a very large number of black workers, who were some of the highest paid black workers in Africa at the time. Had they pulled out of SA, hundreds of well-paid blacks would have lost their good jobs and the SA government would have lost a piddling amount of tax money.
I often think of this event when I read stories like this one.
P.S. The company no longer maintains a large presence in SA because of the economic and social disruption brought on by the current government. Way to go, do-gooders.
Friday ~ February 3rd, 2012 at 10:19 am
dieswaytoofastMahesh Paolini-Subramanya
Apple isn’t inherently doing anything *wrong*, and neither was Nike back when. Then again, Apple isn’t doing anything *right* either – the situation, as you point out, is far more complex.
At the extremes you have
a) If Apple could have indentured servants manufacturing all their products, then products would be *very* cheap. But that would be “wrong”, and the consumer backlash would kill Apple.
b) If Apple could ensure ‘American work conditions’ (whatever that is) at its manufacturers, that would be “right”, but then products would be far more expensive, and *that* would kill Apple.
The reality is somewhere in between, and everybody has a part in the process. Activists are *necessary* to the process – as the necessary dialog provides consumers with more information, allowing them to make far more transparent decisions. (Think cosmetics and animal testing. Some people really don’t care, some don’t want to know, and some change their minds once they do know)
Friday ~ February 3rd, 2012 at 11:32 am
Michelle
Ah, the “rising tide floats all boats” theory applied on a global scale.
I agree with Anon. My first reaction upon reading the Times article was that we, as American labor, were being chastized for not being as compliant and cheap as Foxconn employees and we’d better shape up and get with the program if we want to keep our jobs.
Additionally, the premise that we must use cheap labor to save Apple assumes that the process of empire-building and exploitation of labor is desirable in the first place. While group efforts are obviously more beneficial to the group in some instances, that becomes less apparent when the endgame seems to be to make a whole lot of money for a very few people at the expense of many, many others.
But I suppose as long as we can explain away a mass exploitation of labor as a justifiable means to the end of a relative few being able to launch a bird into pigs whenever they want, we’ll continue to do so.
Friday ~ February 3rd, 2012 at 2:31 pm
lark
You are dismissing the brutal conditions by discrediting a source of complaint: Americans who would like Apple to keep more jobs in America. A complaint about the messenger!
A big part of the problem is that China does not have a robust rule of law. The limit on weekly hours in China is supposed to be 49. The Apple standards’ limit is 60. Neither are enforced!
I realize that for a believer in the free market/trade, it may be hard to accept that positive political change does not necessarily flow from strictly economic relationships. Political change happens because of politics. What is happening with regards to this bad publicity (which Apple richly deserves, as it is one of the worst of the tech companies) is politics that may well lead to change.
In my view the brutal conditions for workers in China is as much a moral issue for anyone who benefits (western consumers) as apartheid in South Africa was. And if it continues, there should be consumer boycotts and more.
Friday ~ February 3rd, 2012 at 4:18 pm
Sister Y
Those who would paint this disagreement as being between those who care about poor foreigners and those who don’t are either lying of confused.
I’d divide it this way: (a) those who think miserable conditions are okay because they are an improvement over the previous situation, and (b) those who think there’s a welfare threshold (something like “decent life”) and no large system (which will naturally be self-preserving and have lots of inertia) should be built relying on keeping lots of people below that threshold.
Friday ~ February 3rd, 2012 at 5:11 pm
Adam Ozimek
If by “large system” you mean globalized manufacturing and production I would say it not only doesn’t rely on keeping lots of people below that threshold, it’s the best tool we have for moving people above it. It seeks out low cost labor areas, makes them productive, and drives up wages.
Friday ~ February 3rd, 2012 at 6:55 pm
nemi
That the current globalization has moved more people out of poverty than aid ever did does not mean that aid could not move people out of poverty faster than the current globalization does.
Also: “This also makes the questionable presumption that it is corporations rather than shareholders who should be engaging in charity.”
But corporations are people – are they not?
Friday ~ February 3rd, 2012 at 7:30 pm
Matt
“I would say it not only doesn’t rely on keeping lots of people below that threshold, it’s the best tool we have for moving people above it.”
This seems to be rosy way of saying there is no need to keep people below the threshold because there are plenty of poor people to exploit elsewhere once higher wages are demanded….that is, if you are allowed to demand higher wages.
Wages, however, aren’t the issue in the NY times article. Apple is there because the Chinese government essentially provides free factories, engineers, and dorms with a huge amount of labor that can be roused at midnight to move units within 30 minutes–they will give them time to eat a muffin and drink some tea. I would say Apple cares less about the wages as compared to the lack of freedoms afforded to the Chinese labor pool–complete control of the employee is where productivity is gained. American manufacturing can’t compete because of our legal and philosophical hangups: freedom and free-market capitalism respectively.
In part the joke is on us because it seems global “free-market” capitalism means going where labor is heavily subsidized and controlled by a centralized government thus keeping the costs of production artificially low and continuously moving.
Friday ~ February 3rd, 2012 at 9:19 pm
mgblock
Great post, as well as some thought provoking comments.
The anti-globalization articles that highlight the decline of American manufacturing competitiveness are appealing to our worst fears.
People are afraid of the competition, that is the competition of millions of poor workers who are voting with their feet to say, yes we will accept a lower standard of living. As highlighted by your first commenter anon, people are afraid of what values they may be importing by outsourcing jobs to people willing to work long hours in tough conditions.
It would be refreshing to see leading newspapers such as the NYT advocate that, even if this outsourcing will lead to a lower standard of living for us (let’s leave aside whether it truly is a zero sum game), it’s a good thing because others less fortunate are having a better life. Even if that better life stills falls well short of our standard of living.
But how many people are willing to accept a lower standard of living in order to facilitate improved living standards for poor people halfway around the world? Since advancing this doesn’t seem feasible in politics, the most effective way to promote this type of rebalancing, or even sharing as one might call it, is the outsourcing corporation.
But a line will be drawn somewhere. People feel suspicious about the rapacity of capital seeking out cheap labor. If it were solely up to capital, who knows what kinds of working conditions would be tolerated? Therefore the corporation’s profit motive is constrained by PR and political debate. Right now this debate seems to be dominated by the people with the most to lose, i.e. the Western middle class, than those with lots to gain, the poor foreigner. We need more advocacy, such as yours, for this disadvantaged poor.
Saturday ~ February 4th, 2012 at 1:15 am
lark
The notion that he is carrying on a crusade for China’s poor is a ludicrous and self aggrandizing misrepresentation of reality. I should also add: fatuous. There is a reason China has so many strikes and is roiled by protest and it is not because they are happy living 12 to a dorm room and working 12 hours a day without ventilation. (BOOM! goes the aluminum dust.)
It is to laugh: a bunch of privileged white men gabbing TO EACH OTHER about how they are standing up for the disadvantaged workers of China, by attacking people who protest their shoddy working conditions. You should get out more. Oh, but you probably are not the type. In that case you really really really should read what folks in the Chinese labor movement say (when they’re not in prison).
You could start here. http://www.clb.org.hk/en/
But the deal is, if you can put aside your distaste, one browse is not enough. To be familiar, read something from the front lines by worker activists every day for a year. Maybe that steady slow drip of reality will be enough to wear off the western white male privilege. Maybe!
Saturday ~ February 4th, 2012 at 2:07 am
mgblock
If you really care to change things, as it seems you do, aim to persuade rather than hurling ad hominem remarks at someone you don’t even know. This issue will be decided by the public debate, which is why one shouldn’t cede the field to invective such as yours, or the more generalized fear-mongering of others.
Now to the only substantive point I could identify. China has a long history of protest, strikes and uprisings. Such activism also has roots beyond working conditions, for example, corruption, ethnic tensions or shortages. But that is besides the point. Let us take it as given that these working conditions are as bad as you believe. This does not mean that there are many workers who would want to benefit from receiving outsourced US jobs. And it does not negate the fact that the arrival of these outsourced jobs more often than not improves the working conditions of those workers. Who are you — who is anyone — to say that some poor foreign worker should not be able to have that choice?
Friday ~ February 3rd, 2012 at 11:11 pm
Mitsu Hadeishi (@syntheticzero)
I’d make a different argument from any of those proffered above (I daresay this is not an argument that is typically made by anyone, really). I simultaneously agree with those who argue that one ought to look at the objective situation (to the extent possible) in any given situation (relatively decoupled from sentiment), rather than imposing an external criterion of “just” in an ad hoc manner. However I would argue that a narrow analysis of wages and working conditions based on the assumption that the market has already fixed a fair price is actually missing some objective factors which ought to be considered when thinking about these issues.
In other words, there are larger-scale, longer-term issues to consider here. In the short run, for instance, markets tend to come up with a “fair” price, given the current supply and demand, for any given commodity; include wages. However, the emphasis here is on short run: the inputs to this computation are mostly local; that is to say, prices respond primarily to local fluctuations in supply and demand. Although in theory they could factor in longer-term considerations, this doesn’t, I would argue, usually occur with any degree of thoroughness, because considering very large-scale or long-term consequences of setting price is both too complicated to compute in many instances, too uncertain, and too easy to ignore in the face of short-term “hard” constraints.
A simple case would be the price of helium: at present, helium is extremely cheap. We use it to fill party balloons. What is less well-known or commonly understood is that helium is a nonrenewable resource. There is a finite amount of it and every time we use it to fill a party balloon, the helium escapes up into the upper atmosphere and eventually leaks into space. We are currently on track to run out of helium in about 25-30 years. And it is an irreplaceable element used in many high-tech applications:
http://www.independent.co.uk/news/science/why-the-world-is-running-out-of-helium-2059357.html
The price of helium is ridiculously low. Markets do not fix prices, however, based on long-term considerations, for the most part.
Similarly, I would argue that both for the Chinese and for us, there are potential long-term ramifications for wages and working conditions, even if they are better at Foxconn than they might be in other jobs in China, to be depressed far below the level they would be if they same components were manufactured in the US. For the Chinese, it means a generation of workers who might otherwise go on to raise children in more stable homes, who can eventually afford to purchase the high-tech equipment they are building, etc. As Ford famously remarked, he wanted to pay his workers enough so they could afford to buy one of the cars they built. This builds long-term economic prosperity. It helps elevate wages in the US. It opens a market for goods and services from the rest of the world to be purchased by the Chinese, which can only help the balance of trade.
Of course, these arguments ought to be examined rigorously to see if they really hold up, theoretically and empirically. But one need not simply resort to “moral” arguments here: I would argue the problem with economics isn’t that it isn’t “moral” enough but that it is too focused on short-term or local optimization. The global economic system is more complex than that, over the long run.
Saturday ~ February 4th, 2012 at 1:33 am
geerussell
The product of all that toiling away in Foxconn gets put on ships where it sails away to improve the living standards of Americans in exchange for a big dollar reserve balance.
Instead of liberating that accumulated dollar reserve to send a flow of American goods back to Chinese shores where those goods would improve the living standards for Chinese workers, the Chinese government chooses to hold it captive to maintain a persistent trade surplus.
If I were a Chinese worker, I’d be furious at my own government.
Saturday ~ February 4th, 2012 at 5:17 pm
anon
… plus the Chinese government also invests into gigantic scale infrastructure projects, turning China into an economic, financial and military superpower. Current Chinese workers should be upset – Chinese citizens in 20 years might be grateful.
Saturday ~ February 4th, 2012 at 5:26 pm
ohreally
People in China are clamoring for jobs in Foxconn, why should Apple provide charity to the relatively lucky ones who have jobs already?
I agree, I find the idea that Apple should give Charity to workers working 80+ hours a week simply outrageous. If one of their hands is ruined, well that’s why they have two of them.
What, indeed, does Apple owe the workers working 80+ hours a week, who make their products? I say, nothing.
Contrast the workers in those factories with the people starving in Ethiopia. Who is better off? There’s your answer, ladies and gentlemen. There is always someone worse off; one must be grateful.
Saturday ~ February 4th, 2012 at 10:40 pm
Rick G
About the robotic replacements… it seems likely that whatever forces influence Apple’s labor costs (competitors’ wages, regulations, first world outrage, etc.) also affect the rate of investment and innovation in robotics, since the return to robotics research will be related to the viability of robots as a cost-effective replacement for human workers.
The market equilibrium here doesn’t necessarily maximize future discounted profits for Apple. They may be big, but their not so vertically integrated as to own the robotics research industry, too. Which means that even if a bigger robotics push 10 years ago would have made robots cheaper than human workers *now* and forever more, no individual firm (including Apple) could necessarily have selected that path.
But potential robotics researchers/firms are going to respond to rising third world wages with more research/investment, and it would be ironic if first world outrage over third world working conditions, by putting upward pressure on those wages, is what finally puts robotics over the top, permanently ending opportunity for uneducated third world peasants.
Sunday ~ February 5th, 2012 at 8:08 am
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Sunday ~ February 5th, 2012 at 3:03 pm
govt_mule
Good post, but I’m troubled by the inconsistent application of your ethical and economic arguments.
You state that Apple is not obligated to act charitably or generously to Chinese workers, it is simply obligated to obey the law and act in the self-interest of the company and its shareholders. You even praise this behavior (or at least its consequences) as having some positive moral value.
You then suggest that American workers who act in their own self-interest by objecting to having their jobs shipped to China are morally deficient. Do you really believe that an American worker has an obligation to sacrifice his entire livelihood to “poor foreigners” to be on the same moral plane as a corporate shareholder who gives their Chinese employees only the minimum required by the marketplace?
Monday ~ February 6th, 2012 at 10:20 am
Adam Ozimek
Helping American workers at the expense of poor people in China < Helping Chinese workers at expense of those worse off than workers in China < Helping those worse off than workers in China. In each case the most moral action is to not hurt the less well off at the expense of the better off.
You can certainly debate whether corporations serve the best interest of society by singlemindedly pursuing profits or by using some of shareholders money to engage in charity. I would not say it is an easy question. I have simply called the latter position a "questionable presumption", as it is not something that should simply be assumed as uncontrovertially and universally true as it is by Apple critics on this issue. And even if you think they should engage in charity, then the above paragraph applies.
Monday ~ February 6th, 2012 at 1:53 pm
Michelle
I fail to see how the solely profit-seeking model could be a desirable one for society as a whole, as it eventually leads to intense wealth concentration on one end and idle resources at the other.
The argument that it’s better for 10 year olds to make Nike shoes than starve to death was posed back in the 1980s and it was just as ridiculous then as it is now. Is a society where 10 year olds must make shoes ever desirable?
It’s like being able where you want your poke with a sharp stick. “Well hey, at least it’s not in the eye!”
Monday ~ February 6th, 2012 at 1:58 pm
Michelle
Sorry, that’s “being able *to choose* where you want your poke with a sharp stick.”