Outsourced: Apple & 500,000 Jobs
Apple. Simply put Apple is one of the most powerful companies in the world. And they sure do have the money to prove it. In FY of 2010 they made $14.01 billion dollars in profit (NOT total sales) And it’s only getting better: This year they expect to more then double that. Just a few days ago Apple shocked analysts yesterday by posting a whopping 125% leap in its fiscal third-quarter profits—a feat it achieved without releasing any major new products in the past six months. Apple’s $7.3 billion in total earnings was a record for the company, and came with record quarterly sales for both the iPhone (20.3 million units) and iPad (9.3 million).
To be fair (and we really always try to be) Apple hires a lot of people in the US. As of July 2011 Apple has 237 Stores in the United States with more in the works. In addition after their done building their new headquarters in California they will have 12,000 full time employes at their new campus.
Apple does hire Americans. And while a lot of those are retail jobs it is worth noting Apple does pay some engineers 6 and 7 figures per year. Our best guess based on the information we have available to us is Apple hires somewhere in the neighborhood of 27,000 Americans.
Which brings us to the big issue. Manufacturing. Let’s start with the number that should get your attention:
920,000 jobs
That’s the number of employees Foxconn has as of 2010. You might not have ever heard of Foxconn however We’ll bet you’ve bought some of their stuff before. Yea. In one campus….ONE CAMPUS. Foxconn has 300,000to 450,000 workers which are employed in Shenzhen China at the Longhua Science & Technology Park, a cramped, walled campus sometimes referred to as “Foxconn City”or “iPod City”. Covering about 1.16 square miles (3 square km),it includes 15 factories, worker dormitories, a swimming pool, a fire brigade,and a downtowncomplete with a grocery store, bank, restaurants, bookstore, and hospital. While some workers live in surrounding towns and villages, others live and work inside the complex, which broadcasts its own television network, Foxconn TV.
These 400,000+ Employees make everything Apple sells. Look on the back of your Apple product it will say: “”Designed by Apple in California Assembled in China.” We argue it should say “manufactured in China” not just “assembled” but we won’t get into that.
One has to ask the question: How much less money would Apple make if those 400,000+ manufacturing jobs were based in the USA. A billion less? Two? FIVE? So instead of making 14 billion last year they would have only made roughly 10 billion in profit. Or this year Instead of being on pace for 30 billion they would only make 25 billion in profit?? What kind of impact would almost a half a million manufacturing jobs have in the U.S. economy? In addition how many of those newly employed American Apple employees would buy MORE Apple products?
Logic would say maybe it’s a good idea to support the customers who buy your products. Make sure the people who buy your products actually have jobs. That’s what Outsaurus.com is all about.
Anyway, back on Foxconn and Apple. Another issue We find troubling is Apple’s record of who their doing business with. Apple supported Foxconn factories have become known as “suicide factories” Hundreds of major articles by the top newspapers in the world have wrote about the horrific working conditions at these factories.
From the article:
“The machines keep moving and the staff have to keep up. The workers need practice to become really efficient, and with a heavy churn of new staff, they cannot adapt. In the past three months, the factory has been losing 50,000 staff a month because workers are burning out,” he said. “Even the engineers and the training staff have had to man the production line,” he added.
“Because Foxconn has had a large number of big orders, the workers are reduced to repeating exactly the same hand movement for months on end.
The workers we have spoken to say that their hands continue to twitch at night, or that when they are walking down the street they cannot help but mimic the motion. They are never able to relax their minds,” he said.
Overtime last year was an average of 120 hours per month per worker, bring their weekly hours up to 70 hours, above the maximum level set by Apple in its guidelines to suppliers. In the wake of the suicides, the company has now reduced the time to 80 hours per month, and is now considering raising its basic wage of 900 yuan (£90) a month by between 50pc and 100pc.
On the 10th of each month, Foxconn workers have their only good day. That’s because they get the Chinese equivalent of $130. That’s $130 for about 240 hours of work. The math is disturbing. These workers make about 51 cents an hour.
It should be noted that Apple’s Foxconn workers used to work longer hours, as much as 70 hours a week. Apple mandated that the maximum overtime be 20 hours a week, so Foxconn workers now only work 60 hours a week. Of course, they’re still making only 51 cents an hour.
By contrast, according to Forbes, Mr. Gou President of Foxconn has a net worth of $5.5 billion. Steve Jobs President and Co-Founder of Apple has a net worth of $6.1 billion.
Some fun math:
Apple makes A LOT of money. (Selling millions of electronics from $500-$2500 and paying $130 a month per employee to make them will do that.) So much so they actually have more cash on hand then the United States of America.
From the article:
According to the latest statement from the U.S. Treasury, the government had an operating cash balance Wednesday of $73.8 billion. That’s still a lot of money, but it’s less than what Steve Jobs has lying around.
Tech juggernaut Apple had a whopping $76.2 billion in cash and marketable securities at the end of June, according to its last earnings report.
To give you an idea what that could buy: 2,050,000 American jobs at $36,000 a year. This would bring the unemployment rate down roughly 2.5 points. 1 company could have such a HUGE impact. Amazing.
Some photos of iPod city:
The bottom middle photo is the Apple Store in New York City. One of the store Apple is most proud of and has become one of NY’s most photographed landmark.
In the news:
Apple’s Troubled Outsourced Manufacturing Plants
Is Apple’s suicide factory outsourcing to even cheaper Chinese peasants?
Inside Foxconn’s suicide factory
The Shocking Conditions Inside China’s Brutal Foxconn Factory
The Forbidden City of Terry Gou: His complex in China turns out iPhones and PCs, powering the biggest exporter you’ve never heard of.
The factory with nets to catch would-be suicides
Related Posts
Tags
Share This
Tax breaks for Apple should be eliminated and their products hit with large import tariffs.
The big question would be, if these jobs were here in america, what would be the cost of the phone to make and would Apple still be able to make a profit.
Sooner or later there won’t be anyone left to buy anything, because we won’t have jobs to pay for stuff.
Apple, Bring those jobs back home. The US is good enough for you to live in, but not worthy of your business? You suck
I read an interview with Steve Jobs which said he had wanted to keep Apple manufacturing in the U.S. but all the insane government rules, made it so complex and expensive for him to do so and create one problem after another for him. So he was basically pushed to move it abroad to get his products made and on time. Thought that was an interesting perspective.
Again, as usual, the root of the problem originates in Washington and the way they shape and enforce insane policies that destroy jobs, destroy companies from being able to hire enough people, etc (Just listen to Peter Schiff Radio, and how he wants to create more jobs because he needs to expand yet can’t because of insane government rules! Instead he has to open offices abroad. And listen to Gibson guitar, how the government is harassing them and forcing them to lay off people.)
So Jobs liked to live in the USA where we have laws that protect the air we breathe and the water we drink and the land we feed from but then poisons the air, land, and water of another country to make his trinkets? Would he have received the same level of health care over there? Would his kids have received the same level of education over there? Would his food, air, and water been as good over there? It’s time these hypocrites are called on their decisions. Jobs is no longer here, but the company is still accountable. How arrogant that we in the USA sacrifice humans in another country for our merciless quests for trinkets.
It’s an easy solution…don’t buy their product.
…and maybe all the non US companies providing millions of jobs in the US should take those jobs back to THEIR countries, you know…. like the 7,000 jobs at the BMW plant in South Carolina for example. I’m sure the Germans would be MORE than happy to have THOSE jobs back. Perhaps Sony could close their US doors and reclaim all THEIR Japanese jobs. I’m sure the UK would be delighted to reclaim THEIR 39,000 jobs BAE Systems creates in the US. I think you need to get over the whole foreign countries taking US jobs thing, because for every foreign company taking a US job, there is another foreign company creating one.
Trevor,
Respectfully we disagree. Your argument assumes it’s a 1 for 1. As in for every job sent our of the USA there is a job sent in. Unfortunately the numbers don’t indicate that at all. It’s not even close. At best it’s 100-1.
In Apple’s case it’s well over a half a million jobs! My God can you imagine what a half a million jobs would do for this country?
Trevor,
Do you think that all those foreign plants in the US are producing for foreign markets? No – most of them are to serve our domestic market. It’s not as though BMW is exporting those cars back to Germany! However, Apple is building in China and then importing the product into the home country, thus wasting our wealth. I agree with the other commenter – let’s stop buying their products!
Alex, Well said! Thanks for posting.
Trevor, the way I see it, there are 4 types of companies out there. #1 is 100% owned by American’s, made in and sold in the USA. #2 is foreign owned, but made in and sold in the USA. #3 is foreign owned, foreign made, sold in the USA, and the lowest company of all #4 American owned, foreign made, sold in the USA.
I wonder why Apple doesn’t pass on the savings of having their products made for 51 cents an hour on to the consumer? Oh, thats right, thats how they get to be so filthy rich.
Now, Apple brought back approximately 200,000(approximately enough jobs to make products for the US?) production jobs back to the United States, it would take alot of training to get that many people to do that kind of production, but once all the jobs were here, it would cut into Apple’s profits a little bit, but that many production jobs in the US increase other jobs also. That would be a HUGE tax base increase, and it could only help with the national debt.
Plus, if Apple did it, then other companies would have to follow, or everyone in America would be switching to Apple computers, phones, and tablets. That would increase the taxbase even more.
This would be a good way to help get this country out of the hole it is in. I see the Republicans having a problem with this solution though, because: 1)Republicans don’t care about the working people that would be filling the manufacturing jobs. 2)Republicans do care about the filthy rich people like Apple executives(and the countless other companies that are following this pattern) and the shipping company executives that are getting richer the way things are going.
If Washington were to streamline all the insane rules that made Steve Jobs send his manufacturing overseas, then maybe his replacement could bring the manufacturing back.
Hmmm lets see whats 7,000 to 400,000. Oh yeah only about 393,000 difference. But hey ill cut you some slack and add the UK’s grand contribution of 39,000 to that, thats still a 353,000 difference. But hey we should be good as long as the UK continues to contribute a fraction of the jobs we outsource. I’m thinking either your math is wrong or perhaps you missed the big picture, by raping other countries for cheap labor we rape ourselves by throwing our money outside our economy. Before anyone states an opinion on these matters they might want to brush up on their economics skills.
Wow,
What great posts…I love you guys..Cora L., Alex 4 Liberty, J, Mike, Ben etc. Yes, the whole Apple thing is very disturbing. On the eve of the release of a new Ipad, it galls me to think that Americans will stand outside all night for the chance to plunk down 100′s of dollars for the latest knick-knack, while mom and pop stores down the street struggle to keep their doors open. I am starting a new business too selling only 100% USA made and its been very tough to get business. I even sell a USA made Ipad holder–believe it or not. I ask some of my friends with Ipads to check it out and buy one and they look at me like I have 3 heads. They’ll willingly spend 500 for a product that costs $10 to make (exaggeration I know), but won’t step up and support me and my supplier who pay taxes here and create jobs. I don’t get it.
Anyway, with their heads buried in their Iphones, its hard to get through to Americans. There is a real disconnect there…they either don’t know or don’t care. It’s really depressing. And this, even when people all around them are unemployed. And people wonder why…I’m glad Outsaurus helps spread the word and great concerned Americans like all of you here take a stand. Thanks for caring.
Oh, by the way, someone above asked about how much an Iphone would cost here. A company already figured it out..Apple could have the Iphone 100% usa made for $249. I forgot where I saw this but it was a reputable study. They could still make a profit…everyone would be happy…except the Foxconn folks.
A concerned economic patriot: Alex in Denver, CO