Sunday, March 18, 2012

Obama and Steve Jobs debate US Tech Jobs

(NY Times Article)

A January 12th New York Times article, the key I.T. jobs behind the creation of Apple's line of smart phones  has turned into an indictment of how far things have come, and of what globalization has become.

"Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.Why can’t that work come home?" Mr. Obama asked. Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said. Ostensibly, the reason is flexibility. To put an anecdote to the claim, one day in 2007, just before the iPhones were to hit the shelves for the first time, Jobs decided to replace the plastic screens with glass ones. In China, "A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day."

Apple has 43,000 domestic employees. Meanwhile, the iPhone is assembled in China's infamous Foxconn City, in a facility that has 230,000 employees, many working six days a week, often up to 12 hours a day. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. Foxconn has also recently become infamous for a string of employee suicides.

There you have it. The meaning of "competitiveness", and "flexibility", come down to thousands of employees working 12 hour shifts for less than $17 per day and living in factory dorms on site where suicides are commonplace. A scathing indictment of how far things have come. A scathing indictment of what "flexibility", "competitiveness", and "job losses to China" really mean. We should not be so surprised. Corporations are legally obligated to maximize shareholder value. They will have no problem doing layoffs, or creating huge negative externalities.

What Needs to be Done?
Since its pretty clear that Americans aren't about to start living in dorms underneath the factory and working 12 hour shifts while on suicide laborers do in China. So, its pretty clear that something needs to be done so that Steve Jobs' attitude about American tech employment is buried along with him. 

As unambiguously as possible, tech jobs need to be brought to US shores, be it through direct subsidy, or requirement that Apple and other potentially strategic firms locate a minimum percentage of their tech jobs domestically (including work generated via subcontractors). Some Asian countries (including China) as use domestic input requirements to keep production chains in-country.
Max Berre is an economist at the EDHEC-Risk Institute (Ecole Des Hautes Etudes Commerciales du Nord) who has worked as a sovereign debt expert at the Inter-American Development Bank in Washington and has taught financial economics at Maastricht University in the Netherlands.


  1. The government does have strict labor guidelines for defense contractors (like SAIC, northtrop grumman). I would imagine that all of their high-tech engineers designing weapons of mass destruction must be citizens or on their way to become citizens. Also look at the arms industry too.

    I think the attitude of labor should change. The reason why we do not outsource labor for defense contractors is because that will directly risk national security.

    The attitude of third world countries in their attempts to slingshot to a first world country has made all labor protection their national security.

    But for me to compare government contractors to Apple products is a bit of a stretch. It may not work since the government is not Apples sole customer.

  2. Interestingly enough, the US is one of the countries that gets accused in the WTO of using its military budget to subsidize several of its High-tech sectors. In other words, the tech jobs we do have are made possible by military contractors.

  3. i personally like Dr. Kaku's opinion on this:

  4. Good video. Kaku makes an excellent point.