Apple to Offer Subsidies to Foxconn Workers?

[carlgo]

You forgot the extra "0" on the end of your estimated cost. it should read $5250.

If Apple were to make them in the USA they would be broke in a few weeks let alone years thanks to compensation claims, health benefits and every other money grab that we westerners take for granted.

People complain that the way Chinese workers are treated is immoral and wrong but that is because you come from a capitalist country. The people in China have a much different view on the world.



So what they do is benefit the state. The state then cares for their families.
The harder they work the more their families benefit.

They are not working to gain fame or fortune. But working to help their family unit as a whole.

That mentality may be something that western culture needs to take a look in the mirror at.

If you think about it from a Chinese point of view WE are helping them by offering them the jobs to be able to help benefit their families.

This is a load of crap. One has to wonder at the motive.

Lots of things are made in the US and don't cost any more than the imports. Many foreign companies actually set up plants here.

US companies did quite well even when we had unions. They simply made more profit overseas and so they went there, helped by tax laws that made it even a sweeter deal for them.

Apple can throw some money at them, but it would be far more impressive to set up an assembly plant here. And they should.

 

[wikoogle]

People grossly underestimate how much stuff we export as well.

We export $147.87 billion a month. And we import $188.3 billion according to the US commerce dept. Yes, there is a trade defecit, but it is by no means an insurmountable one, and it's not as if people overseas aren't buying our goods and importing from us as well.

US Movies, Timber, US products, clothes, electronics, Coca Cola soft drinks, fast food, iPhones/ipads there is a crapton of stuff that we export. And yes, each iPad we sell overseas is a massive export for us, even though it is made overseas. This is because apples pays maybe $100 for the parts and labor to manufacture the iPad overseas, and turns around and sells it for $500. That is a $400 net export for us.

The best solution the trade deficit isn't to cut back on our imports and take away jobs from the chinese. The better solution is to start paying better wages overseas so that we can create a middle class there and export more to the people living there.

And as we export more overseas, that in turn creates more profits and more jobs here. It is a win win situation. Everyone benefits when the global economy grows.

Arguably, the US has more to gain than any other country if the middle class in India and China grows. US products are highly valued and sought after there. So if there is more of a middle class in India and China that can afford US products, they will buy more US products rather than buying cheap knock offs that fall apart.

There is a huge number of potential customers overseas, and all we have to do tap into them is to start paying more reasonable wages, as Apple just took a strong step towards.

Everyone arguing that we shouldn't employ anyone outside the US is being ridiculous.

We benefit if the rest of the world thrives. If chinese people make a living wage, and start being able to watch US movies, buy apple products, buy US brand name t-shirts etc, that money ends up back here helping our economy and creating jobs here.

The more consumers there are throughout the world, the better off everyone is. Saying that we should only employee people in the US means that the consumer market will not grow at a high rate either, and that in turn hurts us domestically and costs US jobs domestically as well.

What we should argue, is that people overseas deserve to make a living wage too, especially when they are being contracted out by US companies.

 

[Remel]

Sorry i just don't love this. These factories are virtual slave / indentured servitude places.

instead of tossing in another 1-2% out of profits to pay them more, why doesn't Apple start manufacturing in places elsewhere, ie US, Canada.

It would be great to see Apple Manufacturing in North America again!!!!

Although the conditions under which they're working is not currently acceptable, Apple (and other companies) pulling out means that these people wouldn't have any income. I think what Apple have done is better and will ultimately improve their situation.

 

[Atkins]

Seems more like a PR move than anything that actually fixes the problem.

Oh, great. First off, so what if it is PR if it's still helping people? Why are people bashing on Apple who are in fact doing something? Isn't it logical to bash on those aren't doing anything first?

The problem is an inhumane work life, 14 hour days, no freetime, being isolated in a security guarded factory area, sleeping on spot, no minimum wage regulation (labour-contracts lawfully overrule law in China), etc...

I am not going to argue that it is easy for those people, but frankly 14 hour days and no minimum wage regulation is nothing specific to China.

Some of the rights western labor movements needed to fight for decades would be a great start, wouldn't it? (A heritage which is too easy forgotten actually.) Like higher job security, shorter shifts, reasonable maximum hour limit a week, a day off a week, social insurance, etc...

So? Western companies should fight for the rights of eastern employees?

Foxconn is a huge manufacturer, employing 100.000 people (young male migrant workers), how do you think does this situation contribute to the working climate between the employees, as some of them produce for other companies?
This is just a PR cover up action.

So what exactly do you propose?

All this cheap manufacturing in China... It is a bit unethical in a way, that we get all these awesome products that were made by people who work all day in a factory and almost get no money for it! But on the other hand, China wouldn't have enough jobs without such demand...

Mixed blessing.

$1.50 an iPad doesn't hurt us and if it makes a real difference over there then great!

1.50$ is just how it starts.

Seems like money is the best thing for mopping up blood.

What a stupid statement.

 

[wikoogle]

Money is not necessarily the answer. If it were, then all the money that has been thrown at US Public Schools would produce Harvard qualified candidates.

A.) John Stossel is an idiot and virtually every stat and claim made in that article is a lie or a mischaracterization... http://www.dailyhowler.com/dh011706.shtml

B.) Public Schools perform just as well fi not better than public schools. http://www.nytimes.com/2006/07/19/opinion/19wed2.html (From the same time period as the article).

 

[realeric]

The prices of Apple products would skyrocket. Do you want to pay $5000 for an iPad?

Customers could get a high quality iPhone/iPad assembled in the USA if they were willing to pay $20 more, I guarantee as an experienced EMS engineer.

 

[Atkins]

Customers could get a high quality iPhone/iPad assembled in the USA if they were willing to pay $20 more, I guarantee as an experienced EMS engineer.

Experienced engineer? 20$ more for the assembly? I hope you are joking. Not to mention that there are other costs involved too.

 

[Mr. Retrofire]

Apple Quick Reaction Force In Action

This is a BAD idea. Foxconn should be paying its workers. Apple's now paying a TIP. This is how the restaurant industry pay scale was destroyed. The customer is now responsible for paying the workers. Bad, bad, bad idea. It is shameful that Apple is doing a politically correct game. Instead if they think Foxconn isn't paying its workers enough they should tell Foxconn to up the worker pay if they want the contract.

A quick solution was needed. Apple did solve the existing problem as quickly as possible. Your comment sounds like they should just watch and do nothing. You did not expect that from Steve Jobs, or did you!?

 

[Mr. Retrofire]

*g*

Seems more like a PR move than anything that actually fixes the problem.

So if your employer offers you a profit sharing plan, you'll say "no thanks, the extra money seems like a PR move". Whatever.

Best comment of the day!

*ROTFLMAO*

 

[emulator]

Do tell, please.

They're killing themselves to get the financial payout for their families.

So the problem is "they don't have enough money." You think "giving them more money" isn't the solution to that problem. So you must have a better plan. So why are you holding out on us? Please tell.

So you think suicides in a Communist country are really suicides? Or just employees who had big mouth regarding their working conditions die?

Why it is a PR move? Because everyone and Apple knows when they go there to "check the conditions" everything will be clean and perfect, water in glasses, etc. As soon they leave, all the sweatshop conditions return. Just watch any documentary from Malaysia or Singapore (not even commie states) with this subject.

 

[RocketJohn]

People grossly underestimate how much stuff we export as well.

We export $147.87 billion a month. And we import $188.3 billion according to the US commerce dept. Yes, there is a trade defecit, but it is by no means an insurmountable one, and it's not as if people overseas aren't buying our goods and importing from us as well.

US Movies, Timber, US products, clothes, electronics, Coca Cola soft drinks, fast food, iPhones/ipads there is a crapton of stuff that we export. And yes, each iPad we sell overseas is a massive export for us, even though it is made overseas. This is because apples pays maybe $100 for the parts and labor to manufacture the iPad overseas, and turns around and sells it for $500. That is a $400 net export for us.

The best solution the trade deficit isn't to cut back on our imports and take away jobs from the chinese. The better solution is to start paying better wages overseas so that we can create a middle class there and export more to the people living there.

And as we export more overseas, that in turn creates more profits and more jobs here. It is a win win situation. Everyone benefits when the global economy grows.

Arguably, the US has more to gain than any other country if the middle class in India and China grows. US products are highly valued and sought after there. So if there is more of a middle class in India and China that can afford US products, they will buy more US products rather than buying cheap knock offs that fall apart.

There is a huge number of potential customers overseas, and all we have to do tap into them is to start paying more reasonable wages, as Apple just took a strong step towards.

Everyone arguing that we shouldn't employ anyone outside the US is being ridiculous.

We benefit if the rest of the world thrives. If chinese people make a living wage, and start being able to watch US movies, buy apple products, buy US brand name t-shirts etc, that money ends up back here helping our economy and creating jobs here.

The more consumers there are throughout the world, the better off everyone is. Saying that we should only employee people in the US means that the consumer market will not grow at a high rate either, and that in turn hurts us domestically and costs US jobs domestically as well.

What we should argue, is that people overseas deserve to make a living wage too, especially when they are being contracted out by US companies.

great post!

 

[Atkins]

So you think suicides in a Communist country are really suicides? Or just employees who had big mouth regarding their working conditions die?

Oh, please, enough with the conspiracy theories. Find some proof, then blame.

Why it is a PR move? Because everyone and Apple knows when they go there to "check the conditions" everything will be clean and perfect, water in glasses, etc. As soon they leave, all the sweatshop conditions return. Just watch any documentary from Malaysia or Singapore (not even commie states) with this subject.

The OP asked you - what is your solution?

 

[deconstruct60]

We export $147.87 billion a month. And we import $188.3 billion according to the US commerce dept. ......

.....This is because apples pays maybe $100 for the parts and labor to manufacture the iPad overseas, and turns around and sells it for $500. That is a $400 net export for us.
.

I hope the Commerce dept isn't using voodoo math like that example. There is no $400 export. If that iPad is made overseas and sold overseas it is never imported/exported from the US. Some Apple subsidiary may ship a fraction of the profits back to the home office, but that is money not a product. Not all profits will be shipped back; especially as Apple goes retail in more countries.

There is a difference between how much money shows up on the financial filings and how much is actually in the US.

If the iPad is sold inside the US, there is no export. I suppose can submarine the price of the iPad by importing it at the lower price and then the US Apple subsidary slaps the higher price on top. That's OK as long as doing the same in the opposite direction for exports.


P.S. your examples of Soft drinks and fast food are way off. Profits from franchises and licensing are shipped back but typically much of those goods are largely made in country. (maybe some specialize soft drink syrup concentrate is shipping out, but for most part local ingredients used where possible. )

 

[jimbobb24]

They needed a study for that?

I read where one study showed that due to the extreme poverty that the workers will commit suicide just to help their families. It showed that as funeral and compensation payments went up so do suicide rates in poverty stricken areas. When they were lowered then the rates went down. (shrugs) hard to tell what is in their thoughts.

If you pay for something you get more of it. You pay for teenage pregnancies, hamburgers, slimy politicians, Union bosses, corporate corruption, and even suicide you get more of it. No mystery here. The disproportionate payoff coupled with the low future prospects is making a sad combination...but it cannot be repeated enough that Foxconn suicide rate is LOW and China as a whole does not have a high suicide rate. Its only something because it is an Apple company.

Those working conditions are beyond sad - what a horrible life.

 

[deconstruct60]

You forgot the extra "0" on the end of your estimated cost. it should read $5250.

Got any numbers to back that up? The manufacturing costs would not be anywhere near that.


From the original article that spawned thread:

It was reported that Apple paid Foxconn about 2.3% of the total price of iPad, after the subsidies, it will expected to reach 3%,

That is 0.7% increase. Apple has 30-40% margins. If the US workers are 10x more expensive than the 2.3% mark that would even leave them with 7-10% margins.

The stock price would not be up in the stratosphere and wouldn't have stacks of money in the bank don't know what to do with .... but they'd still be making a profit.

The multiple is probably a bit more than 10x but not a 100x .

 

[jimbobb24]

People grossly underestimate how much stuff we export as well.

We export $147.87 billion a month. And we import $188.3 billion according to the US commerce dept. Yes, there is a trade defecit, but it is by no means an insurmountable one, and it's not as if people overseas aren't buying our goods and importing from us as well.

US Movies, Timber, US products, clothes, electronics, Coca Cola soft drinks, fast food, iPhones/ipads there is a crapton of stuff that we export. And yes, each iPad we sell overseas is a massive export for us, even though it is made overseas. This is because apples pays maybe $100 for the parts and labor to manufacture the iPad overseas, and turns around and sells it for $500. That is a $400 net export for us.

The best solution the trade deficit isn't to cut back on our imports and take away jobs from the chinese. The better solution is to start paying better wages overseas so that we can create a middle class there and export more to the people living there.

And as we export more overseas, that in turn creates more profits and more jobs here. It is a win win situation. Everyone benefits when the global economy grows.

Arguably, the US has more to gain than any other country if the middle class in India and China grows. US products are highly valued and sought after there. So if there is more of a middle class in India and China that can afford US products, they will buy more US products rather than buying cheap knock offs that fall apart.

There is a huge number of potential customers overseas, and all we have to do tap into them is to start paying more reasonable wages, as Apple just took a strong step towards.

Everyone arguing that we shouldn't employ anyone outside the US is being ridiculous.

We benefit if the rest of the world thrives. If chinese people make a living wage, and start being able to watch US movies, buy apple products, buy US brand name t-shirts etc, that money ends up back here helping our economy and creating jobs here.

The more consumers there are throughout the world, the better off everyone is. Saying that we should only employee people in the US means that the consumer market will not grow at a high rate either, and that in turn hurts us domestically and costs US jobs domestically as well.

What we should argue, is that people overseas deserve to make a living wage too, especially when they are being contracted out by US companies.

Its almost like free trade helps all of us or something.

But, why do trade deficits matter at all?

"Living wage" has no meaning. Living so I can buy an iPad and a BMW, or living so I am out of the wind and rain with regular meals I don't personally have to hunt down? Both are living. The problem is essentially in China's current market post-socialist devastation is that the value of the labor is close to zero - these people make relatively no contribution to the market.

What I might argue is that China continues to grow to the point where they have a middle class, and their economy becomes so large that labor is scarce not plentiful and almost as if by a miracle wages, living conditions, and all of those things should improve.

However, China's conditions are so bad that I suppose what you are saying is not unreasonable, companies might want to do what they can.

 

[deconstruct60]

This is a world economy we are living in. By purchasing chinese goods for a lower price we used less of our money then we would have spent buying a native product. We keep more money in our pocket that can be spent domestically. It all balances out.

Economics is about the flow of money. The flow isn't going to balance out if the Chinese keep their currency artificially low and there is a net outflow of money out of the US. As long as the system is being gamed ( weakened currencies, uneven destructive ecological constraints , etc. ) it will not balance out until some catastrophic correction happens.

Similarly if chuck a high percentage of production of products there aren't any native products left to spend money on.

Competition isn't as much of the visceral reaction. It is tilting the tables that is the bigger issue.

There is also a big different between what is good for global people and what is good for multinational corporations.

 

[Atkins]

Apple has 30-40% margins. If the US workers are 10x more expensive than the 2.3% mark that would even leave them with 7-10% margins.

You should check the average markup in the computer industry. Apple is like every other company. Blame them all or don't. No need to single out Apple.

 

[SiPat]

The factory (Foxconn) has to negotiate prices that will tempt companies to use their facilities, so prices/profits are very low. They also have to meet certain production and delivery targets, or face penalties.

Wages are also kept to a minimum for this reason. Apple distributing 1%-2% of its profits would be good news, but who will benefit? All the workers, or just those making Apple products? If all Foxconn employees benefit, that means Apple will be "subsidising" Intel, HP, Dell and other companies contracted with Foxconn.

I watched a documentary about Walmart where Walmart and not the producer/manufacturer sets all the prices, sometimes at a loss to the producer. As the contracts are deemed valuable, manufacturers go along with Walmart even if overall profits are tiny. Walmart also imposes timetables down to the minute & hour, and if a delivery from the manufacturer is late, even by a few minutes, that could result in the loss of contract.

 

[morkintosh]

So, did Apple just give up on being different when they started making money hand over fist?

 

[JTVPRO]

China owns America!

China is the world's richest country and USA is the world's poorest country. China has $2,447,000,000,000 foreign exchange reserves and USA has $13,004,960,375,583 debt. Each US citizen's share of this debt is $42,158. Market value of ICBC(Industrial and Commercial Bank of China) is $242 billion. PetroChina is more valuable than ExxonMobil, the biggest company in the USA. Should the poorest Americans still help the richest Chinese ???

Agreed. I challenge everyone to try an buy something that is not made in China. Look around where you sit I bet you will hard to find something that is made in America. It is a world economy let the Chinese make sure that their workers are taken care of.

We had a Chinese Student intern and I asked him about working conditions in China and he said that the people he know were very happy and money was not an issue for most everyone in China.

 

[Darkroom]

So, did Apple just give up on being different when they started making money hand over fist?

http://www.engadget.com/2010/06/01/labor-practices-protest-goes-down-at-computex-steve-jobs-called/