Feb 082012

The reason I object to causes that aim to improve working conditions in Chinese tech mills by protesting and/or boycotting Apple isn’t because I don’t think people deserve a humane employment environment. It’s because the rationale that makes up this pressure is half-assed, if it exists at all. Because Apple makes the biggest margins on its smartphones and tablets, Apple should empty its pockets into some kind of the rainbow puppy fund which magically improves the lives of workers. How that transaction gets created, funded and administered is usually met with some kind of dismissive hand motion on the part of the people who already signed up at SumOfUs.org, and have therefore fully registered their indignation.

I hate to break it to all the armchair philanthropists out there, but the reason Apple makes upward of a 45% margin on their products is because what people are willing to pay – and in some cases how much wireless carriers subsidize – is far in excess of what these products cost now. The reason the iPhone can leverage large subsidies out of carriers started because Apple spent an enormous amount of effort and several years to build a non-shit mobile phone. Once it was designed, they shopped their product around confidently, and got Heismanned by Verizon before falling into the arms of AT&T, who signed them into an exclusive agreement. This exclusivity came at the expense of Apple’s ability to market its device to other carriers, something that led directly to the army of shitpile Android knock-offs busting down Verizon’s and other carriers’ doors. If you recall, the first iPhone wasn’t even subsidized by AT&T. Enough people paid full price for it that Apple was able to parley its success into a subsidy. Apple commands its margins because it built a superior, minimalist piece of consumer electronics kit vacuum-packed into Apple incredible App Store ecosystem, sold in the most pristine retail environments and supported in a way that earns the company best-in-class customer satisfaction awards every year. In other words, they didn’t trip and fall into their current success – they earned it.

Part of the reason – a minor part, mind you – that Apple is able to offer its unicorn tears at a reasonable price is because Apple, like every consumer electronics maker on the planet, assembles their products in other countries, China chief among them. The part of the January 21 New York Times article that wasn’t unsubstantiated former Apple employee heresy highlights why: it’s less about the economics and more about the logistics. Apple makes wildly successful products that requires wildly massive outlays of human capital on demand. I have no doubt that some variation of the overtime abuse claimed in these pieces happens when Apple shifts into balls-out production mode. The speed at which the products are assembled is actually the biggest bottleneck Apple currently faces, something that’s been mentioned by Tim Cook on more than one occasion. That’s why Apple’s building factories in other countries – to address the throughput issue in a way that’s less taxing on existing resources. But that’s in the future, and it may not be a complete solution. So how does Apple, who has been causing some stress to the channel used by others to assemble its wares, improve the conditions of workers fairly? Of course I have some ideas, the listing of which represents more effort than I’ve seen applied to the issue to date.

  • Contact all the manufacturers of devices that use foreign labor to assemble their wares. Here’s a partial list, from our friends at Wikipedia:

Acer Inc.
Barnes & Noble
EVGA Corporation
Sony Ericsson

  • Announce that you’re spearheading an initiative to improve working conditions in factories that their products are assembled and invite them to contribute. The fairest contribution methodology I can come up with is that it be a “tax” derived as percentage of the value of the components making up the device multiplied by the number of devices. Apple doesn’t pay more per device because it makes more money, but it does pay more into the kitty because of its insane volume. Proceeds from Galaxy Tab assembly can be used for a “coffee of the month” subscription. Don’t want to be a part of the Apple solution to the industry’s problem? No sweat. Apple will make sure a list of contributors and non-contributors is publicly available so every crackpot .org can scream about boycotting your ass.
  • Have Mike Daisey contribute $5/ticket from net proceeds of “The Agony and Ecstasy of Steve Jobs” to the same fund. As long as we’re punishing Apple for making money off of its name, we may as well be thorough. I’m sure he’d agree. I’m kidding. Sort of.
  • Have one of these watchdog groups administer the fund with input from representatives of the workforce. If it were me, I’d throw down a raise across the board and some extra incentive for overtime, but I don’t know what floats the average factory laborer’s boat. The point is that the spending decisions gets made based on worker input.
  • Have the watchdog group also monitor the factories so they don’t pull any bullshit like yanking down worker’s salaries to account for the extra money they get from the Collective. They would also keep an eye on all the usual stuff like consecutive hours worked, total hours worked and appropriately-aged laborers. I assume that’s the kind of stuff you pay these people for.

If the people caterwauling about Apple are interested in bettering the conditions of the people that assemble their consumer electronics, something like this represents a rational starting point. Singling out Apple, while probably more cathartic than indicting all manufacturers, is disingenuous and lazy. Real world problems spawned by globalization require solutions that go beyond shaking your fist and blindly boycotting. Real solutions don’t penalize some companies more than others because some of them worked harder to enjoy their current level of success. They distribute the responsibility to all the parties involved. I hope Apple’s response to its critics resembles a real, sustainable solution.

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