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Conflict & Tragedy

The cost of that iPhone is more human than money

We've said it before: while one reason that goods from China --- and other countries --- are manufactured so cheaply is low wages, also included is the lack of humane worker treatment, lack of worker rights, and lack of environmental and safety standard (or at least enforcement). On Thursday, Jan. 26, 2012, the New York Times might have set itself up for a Pulitzer Prize with the story "In China, Human Costs Are Built Into an iPad."

It was only a few weeks ago that Hon Hai(Foxconn parent company) chair Terry Guo said:

"Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache."

While some said he was kidding when he said that, it's true that Guo invited Chin Shih-chien, who is the director of Taipei Zoo, to his company to teach his own managers exactly how animals should be "managed."

That is just the tip of the iceberg. As the Times notes, before the blast that tore through Foxconn's Chengdu plant in 2011, the Hong Kong-based watchdog group Students and Scholars Against Corporate Misbehaviour (SACOM) issued a report detailing safety concerns and more at Foxconn plants --- including Chengdu.

Prior to that, of course, were the 2010 employee suicides occurring at Foxconn. Apple noted the suicides in its 2011 Supplier Responsibility Report, which covered 2010, but if you were to ask the question "are things improving," the answer would be no. A look at Apple's 2012 Supplier Responsibility Report shows that Apple puts up a good front, but things are not getting better.

To be clear, it's not just Apple. Other companies use Foxconn as well, and the problems exist not just at Foxconn, but other manufacturers, too. It also affects manufacturers in other market segments; we recall a Dateline expose of a clothing manufacturer possibly a decade ago that was shocking.

None of this is new news. It's been around for years. What's interesting is the following statement from a former Apple executive, who spoke under condition of anonymity:

“We’ve known about labor abuses in some factories for four years, and they’re still going on. Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice. If half of iPhones were malfunctioning, do you think Apple would let it go on for four years?”

Another former Apple executive said, “We’re trying really hard to make things better. But most people would still be really disturbed if they saw where their iPhone comes from.”

Once again, this shouldn't shock consumers. Apple is a corporation. Its goal is to make money for its shareholders, which it does quite well.

Li Mingqi, who until April worked in management at Foxconn said, “Apple never cared about anything other than increasing product quality and decreasing production cost. Workers’ welfare has nothing to do with their interests." Li is suing Foxconn over his dismissal, and helped manage the Chengdu factory where the 2011 explosion occurred.

As we said, it isn't the first such expose. In December of 2010, the same year as the Foxconn suicides, Jordan Pouille, a French journalist, wrote a report: "Why I don’t want an iPhone for Christmas."

Why then, do consumers not rise up in protest? When these stories emerge, there is a short period of backlash, and then people go back to wanting their cheap iPhones, MacBooks, and HDTVs. Be honest with yourself: you would prefer to not know --- or not think about --- these crimes (and that's what they are) against other human beings.

Admit it. We'll wait, and admit to it ourselves. It's a form of selfishness, to be sure.

A current Apple executive put it succinctly, "You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China."

The real reason manufacturing won't return to the U.S. is the dirty little "secret" that's not a secret, above.