Running Head: Apples international Labor

Apples international labor.

Abstract

The following paper will focus on how Apple is seen as exploiting their workers in China. Apple outsources the manufacturing of their products, such as laptops, iPads, iPhones, and other technologies to Chinese suppliers. With a huge demand for such products, Apples suppliers in China such as Foxconn, Foxlink, Pegatron, and Wintek, were accused of forcing staff to work under

Apples international labor inhumane conditions and using student workers (Langshaw 2012) On the other hand there are reports that the workers actually want the work for the extra compensation.

Apple exploitation?

There are a multitude of reasons to why a company will expand into a foreign market; the biggest one would be the access to new customers and the ability to obtain access to new resources. A resource that cannot be overlooked is the manpower resource or labor resource. A company that expands into a foreign market will have this resource as a lower cost, which will help competitiveness.

Apples international labor Apple Inc. is an American multinational corporation headquartered in Cupertino, CA. They design, develop, and sell consumer electronics, computer software and personal computers (Apple 2013) According to a report in the Times, Apple employs 43,000 people in

the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apples contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apples other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.(Bello) The outsourcing of this labor has had benefits for Apple, but it came with accusations that the companies that they contracted for labor were guilty of being paid very low wages, suffered horrible working conditions and even some reports of suicide in protest. Apple has addressed this quickly by increasing wages and cutting hours. On the other had, there have been reports that the cutting of hours was something that many of the employees actually wanted the hours. Foxconn is one of the companies that have been the target of unfair labor practices and this paper will focus on this company in particular. This paper will focus on the following questions: 1.) Why does Apple outsource? 2.) What were the accusations of unfair labor? 3.) How do the employees of feel about the changes? 4.) Where is this headed?

Apples international labor

Why does Apple Outsource? According to a report in the New York Times, Apple earned over $400,000 in profit per employee in 2011. (Bello) Having such a huge profit margin one would wonder exactly why they would need to outsource their labor to other countries such as China if they can afford to have a US presence. Steve Jobs, the founder of Apple, played a key role in creating this system. Apple executives recount his wanting a glass screen for the iPhone that could not be scratched, and his wanting it in six weeks. After one executive left that meeting, says the Times, he booked a flight to China. If Mr. Jobs wanted perfect, he recalled, there was nowhere else to go. (Bello) Not only was China known for a good source of supply chain, but the contractors were also known to have the slimmest profit margins, which meant a lower cost for Apple.

What were the accusations of unfair labor? On February 2012, the Fair Labor Association (FLA) launched an investigation on Foxconn, a major Apple supplier in China that they practiced unfair labor practices after suicides on factory premises were reported. They evaluated conditions based on visual observation and review of policies, procedures and documentation (payroll and time records, production schedules, employee records); interviewed hundreds of Foxconn workers and managers both on- and off-site; and conducted an anonymous worker

Apples international labor

perception survey of 35,500 randomly-selected Foxconn workers providing an in-depth understanding of working conditions, particularly during peak production of Apple products. FLA found excessive overtime and problems with overtime compensation; several health and safety risks; and crucial communication gaps that have led to a widespread sense of unsafe working conditions among workers. (Labor 2012) In response to the findings, Foxconn and Apple promised to reduce the hours worked by the employees and to increase their pay. Foxconn and Apple agreed to comply with the standards set forth by the FLA and Foxconn raised wages of workers by 25%, conduct a cost of living audit in locations near factories, and pay workers the overtime they were owed in the past.

How do the employees of feel about the changes? On the very same FLA report the following survey found the following information. 48% of workers thought their hours were reasonable 34% said they wanted to work more hours 18% felt they worked too much

The FLA report of overwork was defined on the following. That each factory exceeded 60 hours per week, and about 40% of workers worked up to 70 hours a week and did not get a full 24 hour break at some point every week. (Blodget) Reports and interviews of factory workers have revealed that many of the workers want to work extra long hours, why? More money is the bottom line. Many follow-up reports went to show that the workers were unhappy with the loss of the longer work hours that they lost.

Where is this all headed?

Apples international labor American companies that outsource their labor should check in on the labor practices of the countries that they do business in. These are set in place to prevent abuse of employees, the forced labor of children, and slave labor wages. Foxconn did practice unfair labor laws by not

compensating their employees the overtime that they were owed. Thankfully the FLA found this and Apple and Foxconn worked together to resolve this issue. The benefit of this was that Foxconn, and perhaps the rest of the Apple outsourced companies are now under more scrutiny for fair labor wages, especially overtime wages. The drawback seemed to be that the employees of these companies did not really seem to mind the longer hours; and many seemed upset at the loss of these hours. The questions that arise from the practices of Foxconn will start to touch on the social norms of other countries. Do countries such as China feel that there should be a cap on labor hours? Should there be a standard maximum length of workweek enforced across the globe?

References (Apple 2013). Retrieved from http://en.wikipedia.org/wiki/Apple_Inc. Bello, W. (n.d.). Retrieved from http://towardfreedom.com/globalism/2713-the-appleconnection-globalization-and-outsourcing

Apples international labor

(Labor 2012) March 29, 2012Retrieved from http://www.fairlabor.org/report/foxconninvestigation-report Blodget, H. (n.d.). Retrieved from http://www.businessinsider.com/apples-foxconn-workerswant-to-work-more-2012-3