Steve Jobs' legacy under fire on outsourcing jobs
It's all about Jobs. Steve Jobs. Although he was brilliant, creative and a successful CEO, he had one flaw: he outsourced Apple.
Mr Jobs could have created a hundred thousand jobs in the United States, but instead he created them in China and Korea. Apple can still move many of those jobs back to the United States.
Foxconn is one of the primary subcontractors for Apple. It is the world's largest maker of electronic products, including the iPhone, iPod and iPad. Foxconn employs from 300,000 to 450,000 workers in Shenzhen, China at the Longhua Science & Technology Park, a cramped, walled campus sometimes known as "Foxconn City" or "iPod City."
Covering more than one square mile, its enclave includes 15 factories, worker dormitories and a shopping area complete with a grocery store, bank, restaurants, bookstore, and a hospital. Workers never have to leave the campus, and rarely do.
Apple's iPods are made by mainly female workers who earn as little as $US 40 per month, according to a report in Britain's Daily Mail. The report claims Foxconn's workers live in dormitories that house 100 people, and that visitors from the outside world are not permitted.
Workers toil for 15 hours a day to make the iPod music player, the report claims. They earn $US 40 per month. The report revealed that the iPod Nano is made in a five-story factory that is secured by police officers.
Another factory in Suzhou, Shanghai, makes iPod shuffles. The workers are housed outside the plant, and earn $75 per month - but they must pay for their accommodation and food, "which takes up half their salaries" the report observes.
It wasn't always this way. Apple made its first computers in Northern California. Steve Wozniak and a friend put together the Apple I computer in Job's garage in 1976. They made 200 of them—all made in the USA. The Apple II was introduced in 1977.
Apple sold 4.86 million Apple II computers from 1977 to 1984, all made in the United States. Then Apple introduced the MacIntosh, still one of the top-selling computers in the world. Apple sold 13.7 million Macs in 2010.
According to the New York Times, Apple's plant in Fremont, California, was producing 1,500 MacIntosh computers a day in 1984. Apple made about 1 million Macs in 1985 at its Fremont plant. According to the Los Angeles Times, Apple closed its Fremont plant in 1992 and shifted production to Sacramento, Colorado, Singapore and Ireland. The Fremont plant had a remarkable eight-year run.
Apple increased its outsourcing overseas when Jobs returned to the company as CEO in 1998. In 2004 Apple closed its manufacturing plant in Elk Grove, California. Now no Apple computers, iPhones, iPods or iPads are made in the United States.
Forbes reports that Apple has one of the highest profit margins of any corporation, 41.4 per cent. The primary reason for this is outsourcing to China where workers are paid 15 or 20 cents per hour. Apple amassed a cash hoard of $US 76 billion, more than the US Treasury had on hand in July of 2011, according to Fortune magazine.
If we take half of this cash hoard, Apple could create one million jobs paying $US 38,000 per year, for one year, or 100,000 jobs for ten years. These 100,000 jobs would pay people enough to afford an Apple computer, iPhone, iPad and an iPod.
With Steve Jobs untimely passing, perhaps it is time for Apple to bring some of these jobs back to the United States. Steve Jobs represents the one percent at the top of the pyramid that the 99 percenters are protesting on Wall Street.
Maybe the protesters will turn their anger on Apple, and other companies like Nike, who charge premium prices for products made in sweat shops by virtual slave labour.
It is the millions of jobs that have been outsourced by Apple and other American companies that has weakened the US labour market and is making the new generation of Americans the first generation to be poorer than their parents.