BREAKING: Another iPad worker commits suicide in Chengdu city.
By Fred Gates
In 1914, Henry Ford revolutionized industrial production a second time — he began to pay his assembly line workers $5 per 8-hour day, or roughly three times what was typically paid factory employees at the time. He was instantly labeled a socialist, a madman. The Wall Street Journal called his move “an economic crime.” But Ford was no madman: his profits doubled in two years. Why? He created a new class of customers willing to participate in what Robert B. Reich calls “The Basic Bargain” in his book After Shock: the Next Economy and America’s Future.
I never dreamed that I will buy an iPad, it may cost me two months’ salary. I cannot afford it. I come from a village to sell my labour at Foxconn. All I want is to improve the living conditions of my family,” one 24-year-old worker said.
The Basic Bargain is easy enough to understand: workers who can actually afford the products they make can become loyal customers and compelling advertising to family and friends.
Will Apple Computer be the first major corporation to honor The Basic Bargain with its foreign workers? More importantly, can it afford not to?
Consider the sheer size of the contract manufacturer Foxxconn. The major producer of housing and touch screens for the popular iPad and iPhone, Foxxconn claims to have a jaw-dropping workforce of over a million and counting. Recently in the news for a fatal factory explosion and working conditions so bad employees are urged to sign an anti-suicide pact; improving conditions and wages for these workers would be a win for Apple in terms of PR, and could increase their market share with a new class of customers.
It should come as no surprise that these workers cannot afford an iPad, which presently will run over 2 month’s salary. The Apple brand is now the most valuable in the world, and yet its revolutionary approach to computing, manufacturing (at least in the US), and employee relations is not represented at all by its standard-issue sweatshop approach to overseas production.
Should Apple be held to a higher standard than apparel companies and its competitors in phones and computers? Can it afford to not hold itself to such a standard?
With a little more vision, a slight increase in production costs could yield a potential million new customers — and countless more from the good will and public relations benefits that would come from simply paying a living wage to its employees in China.
It’s time for Apple to lead the way and show that sweatshop conditions and wages are not necessary to creating a winning product and brand, and can only slow progress in the long term.
Note: I posted this ten years ago. Has anything changed?