The Dilemma of Cheap Electronics
Last week, an important Times article set off shockwaves in the consumer tech industry by focusing on tragedies and working conditions at Foxconn, the Chinese electronics factory that makes Apple iPhones. It describes excessive overtime, crowding in worker dorms, improper disposal of hazardous waste and unsafe working conditions.
These revelations have shocked a lot of Apple fans — and fired up a lot of Apple foes. There are petitions and flooded comment boards. This morning, protesters delivered petitions at six major Apple stores, including the new one in Grand Central Terminal.The article and the response are healthy. Nobody wants to see workers exploited, and if Apple can pressure Foxconn to clean up its act, it should.
Apple is the poster child for the conditions at the Foxconn factory, and no wonder: it’s the most profitable electronics company. It makes a big, spectacular target. There’s an important factor, however, that seems to be largely missing from the conversation, though it was noted in the article: Apple isn’t the only company that builds electronics at Chinese factories. The truth is, almost all of them do.
Foxconn’s other clients are a Who’s Who of popular electronics. They build cellphones, TVs, computers, e-book readers, routers, circuit boards, game consoles and on and on. Its customers include Amazon, Barnes & Noble, Asus, Hewlett-Packard, Dell, Intel, I.B.M., Lenovo, Microsoft, Motorola, Netgear, Nintendo, Nokia, Panasonic, Samsung, Sharp, Sony and Vizio.
And that’s just Foxconn. There are other big Chinese electronics makers.
As the Times article says, “Bleak working conditions have been documented at factories manufacturing products for Dell, Hewlett-Packard, I.B.M., Lenovo, Motorola, Nokia, Sony, Toshiba and others.”
It’s safe to say that most electronics sold in the United States are made in these Chinese factories.
So yes, we should pressure Apple to continue putting pressure on Foxconn. But at the same time, we seem to be ignoring a much bigger and more important question: How much do we care?
That Chinese workers are paid less than American workers is no big shock. We’ve known that forever. That’s why everybody outsources to China in the first place. There’s a long list of Chinese manufacturing costs that are lower than American manufacturing costs: hourly employee rates, worker benefits, taxes, the cost of power, buildings and equipment, and more.
Bringing workplace standards and pay in Chinese factories up to American levels would, of course, raise the price of our electronics. How much is hard to say, but a financial analyst for an outsourcing company figures a $200 iPhone might cost $350 if it were built here.
Do we care enough about Chinese factory conditions to pay nearly twice as much for our phones, tablets, cameras, TVs, computers, GPS units, camcorders, music players, DVD players, DVRs, networking gear and stereo equipment?
Not everybody will say yes.
But suppose they did. How would we get there? Which electronics brand would jump first?
In other words, what assurance would the Apples and Dells and Panasonics have that if they forced their Chinese contractors to adopt American-level wages and conditions, their competitors would all do so simultaneously?
That’s the part that the protests are missing. Is Apple supposed to be the only company that takes on the costs of improving conditions? Are the protesters seeking a world where an iPhone costs $350 and a competitive Android phone costs $200?
Or don’t we really want all of the companies to make that move simultaneously?
The issue is complicated. It’s upsetting. We, the consumers, want our shiny electronics. We want them cheap, yet we want them built by well-paid, healthy workers. But apparently, we can’t have both.
Sooner or later, we’ll have to make a choice. The fault, dear Brutus, is not just at Apple, or in China — it’s also in ourselves.