Annette Bernhardt, Flickr
By Nicki Lisa Cole and Jenny Chan, for Truthout
Apple made headlines in late January 2015 when it reported the largest quarterly profit ever in corporate history: $18 billion. A record-breaking $74.6 billion quarterly revenue generated this profit, thanks in large part to the sale of 74.5 million iPhones during the same period.
For Apple, this is a great start to 2015, just as 2014 was a fantastic year for the company. Last year, they sold more than 169 million iPhones, (1) which earned them nearly $102 billion in sales. With $183 billion in total 2014 revenue, and $39.5 billion in profit, (2) Apple is the most valuable company in the world.
But for many hundreds of thousands of young Chinese toiling on Apple assembly lines, 2014 was not such a good year. Reports from China Labor Watch (CLW) and Students and Scholars Against Corporate Misbehavior (SACOM), and evidence gathered by researchers Jenny Chan, Mark Selden and Pun Ngai detail a litany of labor law violations at numerous factories across China. Troublingly, this evidence shows that many of the same problems reported to Apple in 2013 continued unabated through 2014. Conditions have in fact worsened at several sites.
This is the third post in a four part series. Start at the beginning with: Whimsical Branding Obscures Apple’s Troubled Supply Chain.
I cannot watch this 2003 Apple iPod commercial without shaking my hips, even in the midst of delivering a lecture or conference presentation. In fact, I struggle deeply to refrain from jumping around in an ecstatic dance of joy.
This commercial moves me. But, why?
This is the second post in a four part series. Start at the beginning with: Whimsical Branding Obscures Apple’s Troubled Supply Chain.
In a recent post on the Apple brand and its cultural significance, I drew on my study with Gabriela Hybel of over 200 Apple television commercials aired between 1984 and the present to argue that Apple excels at what branding experts refer to as “emotional branding.” I pointed out that Apple commercials cultivate happiness through whimsical depictions of products and their users. In this post I focus on another key finding from this research, which is the prominence of sentimentality in Apple commercials. Both of these things — whimsicality and sentimentality — are key parts of the promise that Apple makes to its customers.
The Trouble with Apple
Suicide at Foxconn. Poisoned workers. Colluding to inflate the price of e-books. Tax evasion (albeit, legal). Shady suppliers who can’t toe the line of labor or environmental laws in China. Apple’s reputation has taken a hit in recent years. Or, so it seems it should have. But, despite the fact that news reports on the company’s behavior and supplier relationships have been more negative than positive since 2012, Apple’s revenue has continued to climb and break records.
The current issue of the journal New Technology, Work and Employment features two articles on Foxconn in China, both of which are free for one month.
As described in the editorial to the issue by Debra Howcroft and Phil Taylor:
“These papers in different ways are concerned with the production of electronic consumables by Foxconn,the Taiwanese-owned multinational supplier, which is China’s leading exporter. … The first of the articles provides the remarkable testimony of Tian Yu, a young female migrant worker, who attempted suicide by jumping from the fourth floor of her dormitory accommodation. Tian’s account has been crafted with great skill and sympathy by Jenny Chan.”
“The second article locates this narrative in the broader political-economic context of the buyer-driven value chain, in which Apple establishes parameters and control over price-setting, production processes and product delivery from its suppliers, notably Foxconn. Based on extensive fieldwork and thorough documentary analysis, Chan, Ngai and Selden analyse the consequences of this asymmetrical power relationship.As the scale of production has ramped up, Apple’s ‘value capture’ and profits have soared while Foxconn’s margins have flatlined, the outcome being massive intensification of work and a harsh workplace managerial regime.”
The New York Times recently published an in-depth article on “Apple’s Retail Army, Long on Loyalty but Short on Pay,” as part of its excellent series on “The iEconomy.” The new article notes that the majority of Apple’s US workforce (30,000 of its 43,000 domestic employees) are not engineers – part of the hailed “creative class” typically associated with the likes of Apple – but hourly retail sales employees.
Last year, the article reports, “each Apple store employee — that includes non-sales staff like technicians and people stocking shelves — brought in $473,000.” Yet, many of these employees are paid just $25,000 per year.
The most common definition of low-wage work used in international comparative research is two thirds of the median income. In the US, the median income in 2011 was $34,460. This puts the typical Apple store employee at 73% of the median, making employment in an Apple store effectively a low-wage job.
Apple Inc. is the largest technology company in the world, in terms of both revenue and profit. Yet, the California-based company has just 47,000 workers on its payroll in the United States. Apple recently released a report in which it claimed responsibility for “indirectly” creating an additional 257,000 American jobs in industries that are part of its supply chain, a claim that was “disreputable,” in the words of MIT labor economist David Autor – as if Apple’s suppliers did not have any other customers. Or, as Wharton labor economist Peter Cappelli noted, as if the consumers spending their money on an iPad would not have purchased another product in its absence (see a New York Times article on debates over the report here, including comments from Autor and Cappelli).
While Apple’s claim to have created jobs for UPS and FedEx employees is questionable, however, there is some truth to the argument that Apple is responsible for the employment – and working conditions – at its key suppliers, particularly manufacturers for which Apple is the main customer. This may be the case for some Corning employees in the US (supplying glass for iPhones) and is very likely the case for, tens, perhaps hundreds of thousands of employees at Foxconn in China, which presumably has entire lines or buildings dedicated to Apple.
A recent report by political economist and accountant Karel Williams and his research team at the Centre for Research on Socio-Cultural Change at the University of Manchester looked at the Apple Business Model and its employment effects. They cite a study which found that Chinese workers add $6.50 in value to each iPhone 3, just 3.6% of the phone’s shipping price.