The Cost Of Apple Products
I sit here and type this on my MacBook Pro.
If it wasn’t such a fine machine, I wouldn’t have bought it. It boots up quickly and works well with (hundreds) of windows open. It never has a virus, my bank account information has never been stolen, but this machine has a sordid past.
It was built on the backs of what amounts to near slave labor in China. Where, according to a New York Times article published today, “Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products and the company’s suppliers have improperly disposed of hazardous waste and falsified records…”
Meanwhile the company sits on a record $97 billion in cash. Steve Jobs’ widow sat next to the First Lady at Tuesday’s State of the Union Address and President Obama used Jobs as an example of how a nobody could become a somebody.
It is both emblematic and tragic that a company that is so revered in the U.S. is creating its wealth from a form of labor we outlawed in the 1930s.
Banners on the walls at Apple’s major manufacturer of Ipads and Iphones, Foxconn, read, “Work hard on the job today or work hard to find a job tomorrow.” The Times story notes, “In 2007, for instance, Apple conducted over three dozen audits, two-thirds of which indicated that employees regularly worked more than 60 hours a week. In addition, there were six ‘core violations,’ the most serious kind, including hiring 15-year-olds as well as falsifying records.”
I could get angry, but I won’t. If I was truly angry, I wouldn’t own this computer. And that’s true for millions (tens) of Americans that are probably reading this on their Ipad, Iphone or MacBook.
In today’s global economy we simply don’t care about the people across continents and oceans. We hear about the smog problem in China. We see pictures of gray clouds hanging over the North China Plain, but we don’t associate our own consumer habits with the destruction of their environment. We don’t realize our purchase of a MacBook is funding harsh labor.
We quietly realize that if Apple were to actually fix the problem, their products would be more expensive and they’re expensive enough already. But at the same time, we can stand up to executive pay and preferential shareholder treatment.
I’ve heard stories of past American companies. Where executives took pride in the happiness of their workforce and the quality of their product. But with executive compensation directly linked to stock price, CEOs and company leaders only have an incentive to see their stock price rise, at any cost.
And although I’m a financial rookie, I don’t have a degree in economics, it’s elementary why executive compensation has shifted from salary to stock compensation. Any person that makes over $400,000 in the U.S. is taxed at 35 percent. However, if their income is derived from capital gains (the selling of stocks and securities) they are taxed at 15 percent. Executives are no longer paid a straight salary because their tax rate would be 20 percent higher.
If you have the highest levels of business incentivized to only increase stock value the result is a crushing of the workforce. And the most potent example of it is Apple. The number one company in America right now, sitting on $97 billion in cash, which made $13 billion in profits in the last quarter, but is forcing their workers in China to work in what amounts to slave labor.
Yet, here in America, we don’t care enough. We buy the products because they are the best. We can’t control the executives. But it sure would be nice to see, as a MacBook owner, some of those Apple executives give up their own or the company’s cash to improve working conditions in China. They sure do make enough.
