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Apple Is Making Life Terrible In Its Factories (theregister.co.uk)
An anonymous reader writes: Pressure from Apple to lower costs is driving worsening conditions for workers at the company's manufacturing partners.
This according to watchdog group China Labor Watch, which says that under CEO Tim Cook, the Cupertino giant has asked the companies that assemble its products to cut their own costs, and those demands have led them to cut back on worker pay and factory conditions. Specifically, the group reports that Pegatron has been passing on financial pressures from Apple by committing multiple violations of Chinese labor laws on fair pay and workplace safety.
"Working conditions are terrible, and workers are subject to terrible treatment," China Labor Watch writes. "Currently, Apple's profits are declining, and the effects of this decline have been passed on to suppliers. To mitigate the impact, Pegatron has taken some covert measures to exploit workers."
This according to watchdog group China Labor Watch, which says that under CEO Tim Cook, the Cupertino giant has asked the companies that assemble its products to cut their own costs, and those demands have led them to cut back on worker pay and factory conditions. Specifically, the group reports that Pegatron has been passing on financial pressures from Apple by committing multiple violations of Chinese labor laws on fair pay and workplace safety.
"Working conditions are terrible, and workers are subject to terrible treatment," China Labor Watch writes. "Currently, Apple's profits are declining, and the effects of this decline have been passed on to suppliers. To mitigate the impact, Pegatron has taken some covert measures to exploit workers."
I'm no Apple fanboy (just actually switched most my stuff away) but it's worth noting that the Register are well known for having an anti-Apple bias in their reporting.
Other companies use the same manufacturers - I would argue that consumers in general wanting lower priced tech is causing this, not specifically Apple - they just get a lot more scrutiny with being such a huge tech company.
It makes sense, Apple is known to have the largest profit margin by far in the tech industry (close to 40% gross, 20% net), so there is no "room" for them, they have to pass on any drop in revenue to their suppliers. Well, I mean, there is no room if they are adamant at maintaining the largest, by far, profit margin...
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I am not supporting any worker abuse but lets at least get the facts right. Apple's profit margin is around 40%, not 400%. Many people around here make the mistake of looking at manufacturing costs but not factoring in the years of R&D that went into something, the overhead of a company, etc.
Where independent unions are banned.
Basically when China and Russia gave up on socialism, they created a version of capitalism in the image of what they imagined capitalism to be; not the kind of liberal society you find in advanced Western democracies with their regulated market economies and worker's rights guarantees.
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Yeah, they're perfectly free to go back to dire poverty and hunger if they want. No one is holding a gun to their heads to force them to feed their kids and have basic shelter.
SJW: Someone who has run out of real oppression, and has to fake it.
From what I understand these types of factories manufacture products for multiple customers. If that is the case then this is a non-Apple story and amounts to Apple bashing. So can anyone list manufactures other than Apple that Pegatron services?
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As long as the employees are not forcibly coerced to work there, I fail to be outraged.
I really have a hard time calling these students "volunteers"
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
Having a fiduciary duty to make a profit does not extend to or excuse a violation of law, or asking others to violate law. That's what you "fiduciary duty" people seem not to get; that duty does not supercede law, ethics or morality in any way. Stop making excuses for the sociopaths making the world a worse place for your kids to live, and stop holding their actions up as a paradigm that you and everyone else should follow. Seriously. Just stop.
As long as the employees are not forcibly coerced to work there, I fail to be outraged.
They may not be forced to work there but it's very possible that for all practical terms they can't leave this work. I don't know. I can't tell you whether this exists in China or not, but in Russia employment contracts are often signed. A worker may be guaranteed X years of a job at Y years of money. But here's the catch - the worker who signs it can't leave the job without paying a huge fine that is the equivalent of several years of salary. If this factory has a similar thing, they may not be able to leave. I know that in the dormitories (some recent reports suggest that the dormitories are no longer in use, but outsiders don't know why) they used to put up netting to prevent "happy" workers from leaping to the deaths out of the windows. That doesn't suggest to me that there's likely a lot of individual freedom while working there.
You are assuming we exist to serve an economy. But an economy isn't a living thing and that's not how it works. An economy has no rights.
The economy exists to serve the people. It has no other justification.
Not all coercion is in the form of physical force. Work for slave wages or starve, for example, is a form of coercion.
Unions are a worker's way of reminding management that without workers, they would have to actually labor themselves or starve.
Why do you need a union? As long as there isn't work coercion, if you don't like the pay rate, or the quality of the workplace, leave.
Unions are sometimes very good for society. Sometimes management is abusive or corrupt. Sometimes there aren't any good jobs available even if someone wants to leave. Sometimes the company is making excessive profits at the expense of workers. Sometimes unions can correct power imbalances. It's very trite to say "if you don't like the situation leave" but that's not realistic for many people. Many people cannot easily leave their job even if they want to. Unions can be very effective at correcting management abuses and protecting those who are likely to be taken advantage of. Many of the features of the modern working life exist thanks to unions including 40 hour work weeks, paid time off, worker safety laws, engineering standards, and much more.
Are unions always a good thing? Absolutely not. Sometimes unions forget about the health of the company and make excessive demands. Sometimes unions make the companies economically uncompetitive. Sometimes unions protect dead weight or problem workers who really shouldn't be protected. Sometimes unions engage in corrupt behavior.
Unions become a problem when they forget their purpose and get too greedy. Management gets unions when they forget about caring for their employees and get too greedy.
Apple should be negotiating the best rates it's from its suppliers. In fact, being publicly traded, it would be unethical not to.
Woah... hold on there. Just because a company can legally do something does not make it automatically ethical. Maximizing profit is routinely at odds with ethical and responsible behavior. The fact that Apple management has a fiduciary duty does NOT mean they have no other legal or ethical obligations. Fiduciary duty is merely one among many legal and ethical obligations of a company. In fact getting the best piece rate from a supplier often is actually counterproductive. Squeezing a supply chain for every penny actually results in unhealthy suppliers and is bad for the Apple in the long run.
Where independent unions are banned.
Basically when China and Russia gave up on socialism, they created a version of capitalism in the image of what they imagined capitalism to be; not the kind of liberal society you find in advanced Western democracies with their regulated market economies and worker's rights guarantees.
Actually the Chineese Capitalist system looks remarkably similar to the American "Gilded Age." The horrible exploitation of labor during this period is what gave rise to Unions and the "Progressive Era." How things are going to play out with China's single party system is anybody's guess but so far the Ruling party has shown little tolerance for Organized labor. Russia is a very different story, their economy is based largely on exploitation of natural resources, mostly oil. As John McCain put it "Russia is a gas station masquerading as a country". They have little on the way of private Capital investment, the linchpin of a Capitalist system
"unless they are being coerced"
Funny how much like coercion an empty belly is.
Really one of the big ironies of history is that the capitalist economies have better working conditions, a healthier environment and a broader middle-class than any communist state has ever had. And the only reason why China is doing comparatively well at the moment is because they have embraced capitalism.
Where does this leave us? Marx and Engels == complete fail?
Of course you can always argue that true communism was never actually implemented, as communist states somehow degenerate into dictatorial regimes that suppress freedoms. But perhaps the very ideal of communism is doomed to fail because something as intricately human as free trade and a market economy can only be abolished by means of suppression.
Where independent unions are banned.
Independent unions are not banned in China. They were before 2008, but labor rights in China have changed a lot since then. Most importantly, unions now have the right to declare strikes against private companies (but not at SOEs). These strikes are generally tolerated by the government, especially at foreign owned companies. Pegatron is a foreign company (Taiwanese).
I am skeptical about the claims made in TFA for several reasons. First, in the past, these sorts of claims have often turned out to be fabricated. Second, the only actual evidence is some photos of employees drying their clothes by hanging them up. News flash: 90% of the world dries clothes that way. Third, most labor centers in China, including Shenzhen, Shanghai, etc. are suffering from labor shortages, and if conditions at Pegatron were really bad, the employees could cross the street and get a better job in about 10 minutes.
People say "profits" a lot. They try to ignore that prices don't follow inflation, and that costs are real.
The long and short of it is, somewhere behind the opaque shroud, Apple goes from selling the last-model iPhone at a 10% profit to selling it at a 10% loss. What's probably actually happening is people just aren't interested in spending on a new phone now, and will take a low-cost phone at a bargain. Apple can't cut the current-model back to that cost, and can't even get the old-model down that low, and so is trying to hit prices that the consumer will pay by cutting costs back.
In other words: the "cutting into profits" is more like "losing business, and facing extinction." Apple isn't going to die out today; they know that if they can't keep their phones in the consumer market, they're going to die out in a decade, maybe. Strategic executives actually look way ahead and try to minimize the likelihood of such an outcome.
You're talking about a 20% mark-up, and you've managed to ignore that Apple will take a 10% mark-up but the consumer won't pay $600 for a $550 phone. If Apple wants to sell a phone like that in a market of $350 full-featured phones, it needs its Chinese manufacturers to deliver a $350 phone that it can *maybe* mark up to $400 as a premium option.
At the base, this happens when competitors are offering top-of-the-line technology at the break-out price point. 10% more for 10% more feature, until you're suddenly paying 50% more for 10% more feature; you stop just at that point, and now your next competitor can only offer a better product at 1.5 times the price. Yours might cost $400, but their barely-any-better gadget now costs $600. Even if most of your market is in mid-tier $250-$300 phones, your major competitor can't distinguish themselves as a better product without a distinguished price point: to stand apart in features, you must stand apart in price.
This is a common strategy for other reasons. You release a low, mid-tier, and high-end flagship product; then the customer sees that the mid-tier product is much cheaper than the top-tier product but almost as good, and buys the mid-tier product due to its excellent value. Without the top-tier product, they make a more price-conscious decision, determining their need rather than bare purchasing efficiency. What I've described is an extension: you ensure that the high-end flagship product of distinction is someone else's, and that it's *very* expensive by way of making the most-expensive *reasonable* product on the market yourself. Maybe nobody buys your Galaxy S7; but they're sure as hell not going to spend twice as much on a fucking iPhone.
Apple has the extra disadvantage of not selling a mid-tier product; they sell the iPhone 5 currently, which broadcasts loudly that it's an out-of-date product because it was the premier product four years ago. If it was called the iPhone 7n (new budget offering), people would perceive it as a modern, budget-friendly phone without all the bells and whistles.
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Its funny how when it comes down to it, Apple is not very good at things like the environment, gender equality, and social responsibility when it comes to THEIR business. But, my God they sure are not shy about smugly commenting to others about how they handle issues like environment, gender equality, and social responsibility.
The main problem with our times is that so many people are willing to give a pass to those who say the "right" things instead of judging if they do them. But hey, does it really matter if they move manufacturing offshore to avoid environmental responsibility as longs they make an emoji about your favorite, pet cause?
"Liberalism is a very noble idea, currently controlled by some very bad people. Be sure you do not get the two confused.
Somehow, it's hard to argue that Communist China, where companies are allowed to operate at the whims of the Beijing Regime, is 'capitalist'. Just that they've gone from Communist to a party controlled oligarchy, where companies can do what they like, as long as they grease the party bosses in Beijing. Maybe Tim Cook should hook up w/ Kim Jong Un and see if they can build their next factory in Pyongyang? Since his main enemy is South Korea based Samsung, the Korean standoff can get replicated in the mobile world as well
Perhaps both communism and free-market capitalism are only abstract ideals that can never be fully demonstrated in the real world?
There are a variety of online articles that contradict your claim that independent labor unions are allowed in China such as this one , this one, and this one. Perhaps Chinese labor unions are defined in law but protections are not enforced in practice like their environmental regulations.
Given Chinese censorship of news and social media it is difficult for anyone including Chinese citizens to know exactly what takes place in that country. I am more inclined to believe the accusations of dissidents than the wealthy authoritarian party's propaganda.
If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be-T J
That is exactly why the globalist want to ratify the TPP, TTIP, and TISA so that their corporate rights are protected everywhere but local labor rights can be litigated out of existence.
If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be-T J
There are a variety of online articles that contradict your claim that independent labor unions are allowed in China
The ACFTU is a government run umbrella organization for labor unions in China. But unions do NOT have to join. Even for unions that do join, they have the right to independently declare strikes. The links you provide point out (correctly) that unions in China face big challenges. How is that different than America, where union membership has dramatically declined, and service workers are proving difficult to organize?
These factories tend to offer better jobs than any alternative available, and many workers come from the countryside, work for a few years to build up a nest egg, and then return home to their families. The transient nature of the workforce means they aren't willing to sacrifice now for future gains.
I am more inclined to believe the accusations of dissidents than the wealthy authoritarian party's propaganda.
These accusations do NOT come from Chinese dissidents. China Labor Watch is an American organization based in New York.