Monday, November 21, 2016

Apple's Jobs

Among the hundreds of other promises he can't possibly keep, Donald Trump has said he will force Apple to manufacture iPhones and computers in the US. This led Apple to issue a statement about how many Americans it employs, and Vindu Goel of the Times to investigate:
Apple’s overall contribution to the American economy is significant. Beyond the 80,000 people it directly employs in the United States, it says 69 supplier facilities in 33 states manufacture parts that go into its products. Hundreds of thousands of software developers also write apps for iPhones and iPads.

Apple’s rapid growth here in central Texas, where it now employs about 6,000 people, up from 2,100 seven years ago, provides a window into the vast constellation of jobs at the world’s largest technology company and their economic impact.

At Apple’s sparkling new complex in northwest Austin, workers who are spread throughout seven limestone-and-glass buildings field about 8,000 customer tech-support calls a day, manage the company’s vast network of suppliers and figure out how to move around millions of iPhones a week to ensure they get into the hands of customers when they want them.

Employees here help run Apple’s iTunes music and app stores, handle the billions of dollars going in and out of the company’s American operations and continuously update the Maps software that is integral to iPhones and iPads. At another Austin location, about 500 engineers work on the chips that will run the next round of Apple’s products.
So, lots of answering the phone and writing code and planning distribution, plus a few hundred great jobs for chip designers and senior programmers. When Apple had this complex built they insisted that all their contractors pay at least $12/hour, which I suppose is a nice gesture. But if Apple had to insist that contractors pay $12/hour, that to me says something pretty dire about the labor market in what is generally said to be a booming region.

Some Apple products are manufactured near Austin, by a company called Flex that assembles custom Mac Pro desktop computers.
Flex added about 2,000 jobs for the Apple project. Although Apple and Flex declined to discuss details of their arrangement, the assembly jobs start at $11 an hour and pay an average of about $30,000 a year, according to testimony by Flex officials in 2014, when they sought government aid for the expansion.
So much for manufacturing being a route into the middle class; Apple pays experienced call center workers up to $45,000, or half again as much as the average worker assembling computers.

The issue is not really where phones or computers are assembled. The issue is that they emerge from a global manufacturing system in which workers in Austin are in direct competition with workers in Shanghai. One expert the Times spoke to says it would cost Apple $100 more to assemble iPhones in the US, and I assume that means with the miserable wages they are paying now; if they were to pay their factory workers $60,000/year the cost would go up by hundreds more. That would just lead people to switch from iPhones to some other brand assembled overseas. The expert also said this:
There are fewer industrial accidents working in a call center. There is probably more gender equity.
No doubt this is true; but many former factory workers from Rust Belt towns would be humiliated by answering the phone for Apple and having to follow a script written by customer service executives.

Back in 2012, President Obama asked Steve Jobs, at a public banquet for tech executives, what it would take for Apple to move its manufacturing back to the US. Jobs answered, it can't be done. A "source" later explained:
It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.
At that time Apple had only 43,000 US employees, so it has added 37,000 since then. But more than 700,000 people around the world work on Apple products through an immense ecosystem of firms. The speed and flexibility of the system allowed Apple, in 2012, to earn $400,000 in profit per employee, a staggering number that brings home both how rigged the system is against the workers of every country, and the startling efficiency that allows tech firms to earn huge profits while still delivering ever better stuff at ever falling prices.

11 comments:

G. Verloren said...

Back in 2012, President Obama asked Steve Jobs, at a public banquet for tech executives, what it would take for Apple to move its manufacturing back to the US. Jobs answered, it can't be done.

Of course it can't be done. This is like asking the owner of a major American trucking company "What would it take to bring steamboats back to the Mississippi?", or going to the Pentagon and asking them "What would it take to bring back knights on horseback?"

But people don't want to hear the truth. They want to believe there is a magic solution to an unsolveable problem that has existed for all of human history: whenever people find a vastly better way of doing things, it becomes effectively impossible to keep doing it the old way.

And there is always, always, always a faction of diehards who reject the future, who cling to the past, and who cause themselves (and those around them) far more grief and pain resisting change than they ever would have to suffer if they would only work to adapt. But no - they have chosen their hill to die on, and they won't abandon it for anything, not even for the promise of continued life and prosperity through new endeavors.

They are madmen, and I'd gladly say leave them to die of their own stubborness - except that they always insist on dragging as many other people down with them as possible.

Shadow Flutter said...

In response to the unnamed source.

If the "vast scale of overseas factories" is causal, why can't we fund the building of factories? Like agreements between municipalities and sports teams and the building of sports stadiums, the gov't would build the factory to company specs and in return the company would hire factory employees and use the factory for X number of years. Building factories creates jobs. Yes, it would take time, but so would any solution.

As to "the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts" sounds suspect too. Perhaps momentarily true, but we'll retrain you, right!!!!

This is about cheaper labor overseas -- what it's always been about -- and not lack of factories or labor skills. Of course we don't have the factories or the skills. That's because manufacturers left for elsewhere. The effect is not the cause.

"And there is always, always, always a faction of diehards who reject the future, who cling to the past, and who cause themselves (and those around them) far more grief and pain resisting change than they ever would have to suffer if they would only work to adapt."

I'll let those affected determine what caused their grief, but now I understand the Luddites better.

By the way, anyone see corollaries between rural America and inner cities -- despair, drug addiction, breakdown of the family unit.



Shadow Flutter said...

Whoops "similarities" not "corollaries."

David said...

"They are madmen, and I'd gladly say leave them to die of their own stubborness - except that they always insist on dragging as many other people down with them as possible."

Feeling like taking a little proactive action, Verloren?

"With an iron hand, we shall drive mankind to happiness." --Leninist poster, 1918

John said...

Obviously Jobs didn't mean that Apple could not, under any circumstances, assemble iPhones in America. He was saying that there is a world economy and even Apple has to respond to it; they can't themselves dictate the direction of world economic change. If the US government broke off all our trade agreements and enacted huge tariffs, something would change, but the changes would not necessarily benefit the US. In the short term prices for phones and all other tech products would soar, since they all include parts made in many countries brought together by this international supply chain that such actions would disrupt. Nor would assembling everything in the US help Apple, which after all sells many more iPhones in other countries than in the US. In the short term, moving against trade would be hugely disruptive and would cost many more jobs at US exporters than it would create. Maybe in the long term some manufacturing jobs would move back to the US, but the price for that would be huge.

G. Verloren said...

@David

You're reading far more into my words than is actually there. This is also not the first time you've done this, so let's clear up your misconceptions.

No, I do not advocate "a little proactive action" against reactionaries.

As I said, I'd gladly leave them to die on their chosen hills - meaning I'd happily utterly ignore them. The problem is that ignoring them is dangerous, because they aren't content with suffering and dying for their cause - they want to make others suffer and die for it as well. So instead of being able to simply ignore them, one has to watch them like a hawk and safeguard against the damage they will try to cause.

I am not and never was advocating "proactive action". I am in fact bitterly lamenting that we are being forced to engage in "reactive action" - that we have little choice but to spend time, effort, and resources which ought to be spent elsewhere, on protecting ourselves from these people.

Please stop imagining secret calls for violence hidden in my comments. I am, in fact, a pacifist. Just because I'm using harsh language and being highly critical of someone's behavior or viewpoint doesn't mean I wish them harm - at least not any that isn't self inflicted.

Shadow Flutter said...


I was being a bit sarcastic. The source's reasoning is circular and, I think, misleading. According to the source, major reasons (in addition to cheaper labor) for not manufacturing in the U.S. include lack of factories and labor skills. But we lack factories and labor skills because we moved overseas to acquire cheaper labor to better compete. My point being that if we offered to build factories and retrain workers, few manufacturers, if any, would move back. Cheaper labor (and possibly lax regulations) is the driving force. Factories and skills are really not factors.

David said...

Verloren, I guess to me the line between the degree of your harshness and calling for violence is minimal. Certainly in history such a tone and violence go hand in hand--at least, according to my knowledge and understanding of history. There's more I could say, hostile and condemnatory on my part, but perhaps you and I should simply avoid one another.

G. Verloren said...

@David

The medium of text is highly flawed for this form of discourse. It becomes easy to misread a person's tone and inflection, because they don't actually exist in textual form. Hence why I will always tells people to ignore the subtext and rely almost purely on the text, because it is notoriously easy to read the wrong message between the lines.

And to be fair, it does work both ways. Because text is so hard to convey meaning, it is important for people writing to be careful with it. I was perhaps not careful enough here, and allowed my disdain for reactionaries to lead me to be careless with my writing and leave myself open to misinterpretation. So, mea culpa.

David said...

Verloren, that was a gracious thing to write. I'm impressed.

David said...

At the risk of being a buzzkill, I feel moved to break our moment and say that I perceive real philosophical, or at least attitudinal, differences here. You call your enemies reactionaries, but I can't help but think they are merely the slow, the fearful, the clumsy, the square. Such people are part of our community, and deserve equal and full consideration alongside the agile and ambitious. It's why I'm a liberal, and why I always resist definitions of liberal and conservative that emphasize change as such. I think things like civil rights, marriage equality, and so forth are important and desirable not because they change things, but because they correct injustice. And what is bad about that injustice is that it is unjust, not that it happens to be identified with the past. On the other hand, change whose effect is to separate people into the adequate and the inadequate--well, there's a cruelty there. To repeat, the inadequate and square are part of our community, and as such deserve their measure of respect.