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Nightline's Look into Apple's Foxconn Factories
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Yep... it's pretty freaking low.
http://en.wikipedia.org/wiki/List_of_minimum_wages_in_People's_Republic_of_China
http://en.wikipedia.org/wiki/List_of_minimum_wages_in_People's_Republic_of_China
Wait...
How does it take an odd number of hands to make an iPad?
Who's the poor bastard with only one arm?
How does it take an odd number of hands to make an iPad?
Who's the poor bastard with only one arm?
I'm getting my head around the labor cost of making an iPad. Five days to make one = 120 hours (roughly) at a cost of $1.78/hr = $213.60 in labor only. I figure since each of the 325 hands that build the iPad are probably only handling it for a fraction of an hour, and that there is most likely minimal time an iPad is sitting around waiting for the next bit of work to be done, it's safe to say it's built fairly continuously for $1.78/hr.
If the pay for workers was $12/hr, and the iPads were being assembled continuously as estimated above, the labor cost would be $1440 per iPad. Wow. I guess that's why they send them to China.
Even if my math is way off, it's clear that they'll never build them in America, unless robots do most of the assembly.
If the pay for workers was $12/hr, and the iPads were being assembled continuously as estimated above, the labor cost would be $1440 per iPad. Wow. I guess that's why they send them to China.
Even if my math is way off, it's clear that they'll never build them in America, unless robots do most of the assembly.
And my conclusion is that I know absolutely freaking nothing about Chinese culture.
Its all relative. Then again, most north americans are clueless when it comes to matters outside of their borders. CNN did a report once, they found that 12% of americans between the ages of 18-24 couldnt even find USA on a map.
Having said that, I'll use Poland as an example;
The average monthly income per person is around 1500-2000 zloty (or at least was a couple years ago). As far as I know, not much has changed.
To put that into perspective, thats about $700 CAD (OR USD, which is more or less the same seeing how much the american dollar has dropped in value).
Rent in Poland varies depending on location, but typically goes for, say... 1,0000 zloty, leaving the 500+ zloty for whatever else. 1,0000 for rent is a hell of a lot less than in north america. But then again, *everything* costs less there; phone services (mobiles) cost a lot less than it does for us, without contracts. Food is ridiculously cheap. I remember buying a kilogram of fresh cherries (real cherries, not this chemical infested crap were used to here) for no more than 10 zloty, which is about 3 dollars. Alcohol is ridiculously cheap, beer goes for a couple bucks. Going to restaurants is also more affordable, I was about to buy a complete dinner (mashed potatoes, schnitzel, salad, soup and drink) for about 6-7 dollars. This doesnt cost us much, but to them, it adds up the same as it would for us.
Like I said, its all relative as to the costs of living in that country. To live in Poland is cheap, but their currency doesnt convert directly to reflect ours on an equal basis. Just like language and words dont translate directly.
The same goes for China.
"We are unhappy about the pay!!!"
*watches a mob of people almost break down the door to get a job*
Exactly.
Once again, China problem. Not Apple problem.
The QA guy testing internet connectivity?
He has both arms but the other is otherwise occupied.
wikus and scottichan make great points. It's really a combination of culture and the currency translation in the country. Sad to say but it really is the case that these workers are actually making a great deal more than the average college-educated student in China, who in 2008 was probably averaging 1500-1800 RMB a month which is about $250 US.
It is called Vendor relations. When you are a big company you have to care how you get your products. If apple were buying their products from slave owners, it would be a big problem.
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I wonder how many steps it takes to build an iPad or a MacBook considering the number of steps for an iPhone, just to put everything into perspective. Also, since all of this is built mostly by hand, what type of quality control does Apple/Foxconn use? It would seem logical that with Apple's reputation for quality, they would employ TQM, but I'd imagine it'd be difficult for the workers at Foxconn to internalize that philosophy.
Its worth remembering that a generation or two ago twenty or forty million people in China starved to death as a result of the "Great Leap Forward" (i.e. Chinese peasants melted down cooking pots and farm implements to make pig iron).
The kids we saw tonight are living a life of inconceivable luxury compared to that of their parents and grandparents. And their children and grandchildren will live lives comparable to that which we currently enjoy in the US and Europe. Just as our great-grandparents toiled in harsh conditions to build our present consumer society, so these people are doing today.
The Nightline report was about what I expected. You'd get people complaining about low pay, boredom, etc. in most factories here in the US.
The only odd note came at the end, when the reporter suggested that Apple could, because of their profitability, double the pay of all the Foxconn workers. As a trained economist, I groaned at that over simplistic piece of pandering. Imagining the distortions and corruption such an act would introduce into the system - ABC News would be there next year to investigate all the murders, kickbacks, and bribery that occurred as a result. Bottom line: Paying radically "over the market" rate for labor isn't always such a good idea.
The kids we saw tonight are living a life of inconceivable luxury compared to that of their parents and grandparents. And their children and grandchildren will live lives comparable to that which we currently enjoy in the US and Europe. Just as our great-grandparents toiled in harsh conditions to build our present consumer society, so these people are doing today.
The Nightline report was about what I expected. You'd get people complaining about low pay, boredom, etc. in most factories here in the US.
The only odd note came at the end, when the reporter suggested that Apple could, because of their profitability, double the pay of all the Foxconn workers. As a trained economist, I groaned at that over simplistic piece of pandering. Imagining the distortions and corruption such an act would introduce into the system - ABC News would be there next year to investigate all the murders, kickbacks, and bribery that occurred as a result. Bottom line: Paying radically "over the market" rate for labor isn't always such a good idea.
The entire process takes five days from start to finish. It won't be costing anything like all that time and money to build each one.
Holy suspicious batman! Really?! I didn't know it was called vendor relations! I really should have gone into business and economics when I was applying for colleges and universities.
Do me a favour though:
Explain to me why the media needs Apple's permission to go into another companys factories.... wouldn't they need permission from, oh... I don't know, FOXCONN for that to happen?
Do me another favour:
Try and call me an idiot once more.
Ten hours of work to pay a months dorm rent? Sign me up! It takes me 4 12-hour shifts to pay my rent!
If the cost of living to pay ratio are even it doesn't matter if you make $.25/hour or $250/hour.
If the cost of living to pay ratio are even it doesn't matter if you make $.25/hour or $250/hour.
How much do you figure, then? I was just roughing it out, but I believe there are things I'm not considering.
Any other estimates out there?
I worked on a factory line for a couple of weeks in a chocolate factory. I worked 8 hour shifts with a breaks totalling 1 hour. It is desperately miserable work where you start counting every minute left of your shift with hours to go each day. You try to avoid looking at the clock for as long as possible but inevitably someone shouts out the time and the long suffering countdown begins. You're doing the same thing over and over and over again for days. And it is soul destroying. I cannot imagine how awful it would be to have to work 12 hours a day in Foxconn conditions.
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There will be stages in the process where iPads are stationary waiting for glue to dry, QA, etc. There's no way it takes 5 days of full-time work to build each iPad.
Show me an ethically-produced computer and I'll show you an abacus... Unless of course that abacus was made in China.
Glad to see more openness around this issue. Apple has become something of a whipping boy, but if pay and working conditions improve, it will be worth it.
Glad to see more openness around this issue. Apple has become something of a whipping boy, but if pay and working conditions improve, it will be worth it.
Foxconn is required to protect the trade secrets of the clients, which would include not letting anyone inside without the clients approval
Each one of those five hundred or so people will probably be touching the iPad for less than a minute - say 30 seconds, on average. Say a total of 2.5 labor hours (most automobiles have less than 10 hours of assembly time in them) @ $3.00/hr = between $7 and $8 labor cost. Foxconn probably charges Apple about $15 to $25 to assemble an iPad. Any more than that, combined with the published BOM estimates, and Apple wouldn't be making the margins they do. Any less than that, and Foxconn would be losing money (Foxconn's stated profit margins are scarily low.)
They really shoulda gone more in depth, they've blown an oppurtunity that dosen't come along very often.
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... Because it's an assembly line. each person only adds one part.
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... Because it's an assembly line. each person only adds one part.