Apple shares climbed above $500 on Monday, clearly to the delight of shareholders and the Apple faithful. The company, valued at more than $460 billion, is the most valuable in the world and worth more than rivals Google and Microsoft combined. While this is good news for Apple, it's unlikely that this news will mean much to many individuals whose hard work contributes to the success of Apple products — the Chinese factory workers assembling the gadgets "Designed by Apple in California."
Publicly, Apple CEO Tim Cook believes the company strives to improve working conditions. "We believe that every worker has the right to a fair and safe work environment, free of discrimination where they can earn competitive wages and where they can voice their complaints freely, and Apple suppliers must live up to this to do business with Apple," Cook said at the Goldman Sachs Technology and Internet Conference yesterday.
To that end, Apple is allowing the non-profit Fair Labor Association, a Washington-based anti-sweatshop labor rights group, to audit at least four Chinese campuses of Taiwan-based electronics manufacturer Foxconn that are involved in the production of Apple products. At the moment, it's uncertain whether Apple is allowing the audit due to genuine concern for the employees in its supply chain or simply making a move to generate positive PR.
There are concerns that the Fair Labor Association — which is partially funded by the companies it inspects — is largely toothless and has far too cozy a relationship with manufacturers.
Apple itself has a questionable track record when responding to concerns about working conditions in Foxconn factories. After a series of highly publicized employee suicides, then-Apple CEO Steve Jobs declared in June 2010, "Foxconn is not a sweatshop."
But to believe this, one must have a rather narrow definition of the term "sweatshop."
Last May, an explosion at a Foxconn factory manufacturing iPads killed two people and injured dozens.
A recent CNN report featured an interview with a Foxconn employee who complained of a militant culture on the factory floor, where employees are not allowed to even talk while on the job. The woman — who worked more than 60 hours per week — made less than $1 an hour. She didn't use her real name, and her face was blurred as she noted, "If we accept interviews, we will be investigated for criminal responsibility according to law."
It may seem easy to lay the blame for Foxconn's practices on Apple, because it is the largest and most successful company to use Foxconn for its electronics manufacturing needs. But Apple does take steps to improve worker conditions, and it publishes an annual report on supplier workplace violations. Apple is far from the only company to do business with Foxconn, and certainly not the only one whose products are assembled in questionable working environments. Last month, Foxconn made the news when 300 employees in a Wuhan, China, facility that manufactures Microsoft products threatened a mass suicide to protest labor and pay practices.
Foxconn has 1.2 million employees and is one of the biggest employers in China. Many tech companies — including Acer, Amazon, Apple, Cisco, Dell, Google, Hewlett-Packard, Microsoft, Nintendo, Nokia and Sony — use Foxconn for their manufacturing needs. For technology buyers, it's nearly impossible to avoid Foxconn-manufactured products.
While Apple fans may be frothing at the mouth in anticipation of the expected March launch of the iPad 3, they should give some thought to the human cost that is paid to allow such products to arrive in customers' hands for a relatively low price.
