Just before Apple released its new iPhone and its stock price increased, news broke out that the company’s manufacturer in China has been committing serious labor violations. Its supplier’s workers work excessive overtime of about 100 hours a week and factories have unsafe work conditions. This is not the first time that Apple has been accused of unfair labor practices. The issue has called attention to the unfair labor practices of outsourcing suppliers of US multinationals, in particular those of Apple. In spite of the issue, sales of new products for which China supplies the inputs are expected to have an impact of as much as 1% in the growth of China’s economy.
The issue raises a dilemma among both consumers and investors of Apple. Companies outsource manufacturing process to countries like China to save on costs, in particular labor costs. Wages in China are much lower than those in the US. Products like iPhones can thus be sold at a lower price in the US. This process benefits the company, its customers and its investors. Products can be sold at lower prices so more people could buy. Companies can thus have higher margins on the products sold. Robust sales result in good overall performance of the company. Good performance of the company can result in higher stock prices that benefit investors. In the course of all these benefits, a serious problem is overlooked: labor abuses.
The problem seems to be recurrent. Yet nothing seems to have been done. Otherwise, it would not arise anymore. It would not be solved because no one would truly be taking serious action against. Customers like Apple products so they will not likely take any concrete action. They may complain but still patronize Apple products. It is the same problem with investors. They will continue to invest in Apple because they enjoy big returns from the company’s stock. The company would not likely do anything either or else they will lose profits. Adjusting the adjusting the labor hours more favorably would mean higher costs for Apple and eventually also for customers.
I want to think of the issue from the perspective of a country like China. Poor workers in China would definitely welcome such work. Even if the work conditions are harsh, they may still be better than those companies producing for local customers. International standards, except for the overtime requirement, may be better. If pay and work conditions are improved, that would even improve the lives of many workers. It would definitely make the lives of many poor people better.
The problem with this issue is that it may not likely be solved because people who can act on it think mainly of their benefits. While customers may complain about and criticize Apple, they will not likely boycott the company’s products as analysts predict growth in sales for the company. Apple, in spite of all its audits and statements, had not really done anything so far. Unless Apple, its customers, and its investors overcome their hypocrisy, the problem would be recurring. Perhaps, only if government passes a law to punish companies like Apple, only then could the problem be controlled, if not completely resolved.
Works Cited
"Groups Accuse Apple Supplier in China of Labor Violations." The New York Times 4 Sep 2014. Web. 19 Nov 2014. <http://www.nytimes.com/2014/09/05/business/Apple-Supplier-Is-Accused-of-Labor-Violations.html?_r=0>.
