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Apple: the Troubling Underside of Its Success Story


Like pretty much everyone else nowadays, I'm cheering on Apple (AAPL). Seriously, I'm not being sarcastic. Demand for the new iPad is "off the charts," and that's not just great for Apple shareholders, but for everyone else during this less-than-inspiring era.

Aside from the economic lift that Apple is giving the economy in various ways, there's something about the company's success that's infectious, almost Capraesque -- even if, like me, your only exposure to the company is reading the Steve Jobs biography or getting notice of a Quicktime upgrade for your PC.

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It's such a peachy-keen picture of all-American success that it's tempting to ignore how Apple workers, the actual people who make those gleaming new iPads, are being treated in China. That's where the iPad is made, and it's not exactly hot-off-the-presses news to say that conditions at the plant of Apple's supplier, Foxconn, are pretty miserable.


The hyperlink in the preceding sentence goes to a New York Times expose on conditions at Foxconn's plant in Shenzhen. The furor has died down since the media coverage reached a crescendo in late January, and I think that today -- with the iPad selling like hotcakes and memories growing dim -- is a great time for us to pause for a moment, and reflect on the underside of the Apple success story. It's a classic case of labor exploitation -- really one for the books.

Apple responded to all the bad publicity the way companies do in such situations, by labor-standards firm saying it would "investigate" conditions at Foxconn. Evidently Apple was shocked -- shocked! -- to learn to learn that conditions were so bad for its workers in China.

The New York Times reported that "employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple's products, and the company's suppliers have improperly disposed of hazardous waste and falsified records, according to company reports" and independent advocacy groups.

Obviously the image of underage workers, standing so long that their legs swell, seven days a week, doesn't jibe well with the happy image that Apple seeks to project. But I can just see the counterarguments. That's the way things are in China. Don't be such a softie. Harsh conditions are better than no conditions -- better than not working and starvation, right? Besides, aren't conditions actually worse at, say, Chinese textile mills? Isn't it unfair to single out Apple?

Eh, not really.

It didn't get a lot of attention -- here's where I found it -- but Richard Brubaker, founder of Shanghai-based Collective Responsibility, a corporate social responsibility expert, suggested in an interview on the Asia Society Website the other day that the attention that has focused on Foxconn actually misses the point.

The Fair Labor Association, which Apple hired to probe its Foxconn plant, says that Foxconn is really a whole lot better than other plants in China. Brubaker begs to differ, saying that "comparing the conditions of Apple suppliers to those of textile mills is comparing Apples to cars." Their labor practices have always been different, so the FLA "might as well have compared Foxconn to a coal mine."

Brubaker pointed out that the working conditions facing Apple workers in China -- which included two factory explosions at which 140 workers were hospitalized -- are "far bigger than Foxconn and are specific to the Apple supplier set." He suggests that focusing on Foxconn is actually a distraction from the real problem, which he suggests is Apple, not with just one supplier in China.

That leads to another question: is Apple responsible for the terrible conditions in China? Are they responsible for those explosions, or the fact that workers at the Wintek factory in Suzhou are exposed to a toxic chemical called n-hexane, poisoning them as they use that substance to clean iPhone touch screens?

Legally, the answer is a hearty "maybe." Brubaker says that Apple and its supporters "are correct in saying that in the strictest legal sense they are not responsible. However, and this is where it gets more complicated, just because Apple is not 'responsible' does not mean that it cannot be held responsible legally" -- if, that is, Apple was aware of the conditions and failed to act.

Personally, I'm dubious about legal responsibility. To me, the issue is more one of moral responsibility -- and of the mania that has surrounded Apple, and the sometimes ever-so-slightly-adulatory media coverage of this company.

It doesn't seem terribly likely that Apple is going to get into hot water in China, just because a few dozen workers are getting hurt in factory explosions, a few dozen more are claiming adverse effects from screen-cleaning chemicals, and a few thousand workers aren't being treated terribly well. China cherishes Apple as much as Apple adores all that cheap foreign labor. How else is it going to compete? How else is it going to rake in profits and keep the share price zooming along so handsomely?

The moral issue is that we Americans are suckers for a sob story -- particularly when, as it is for Apple's Chinese workers, it's true. We don't like to benefit from the misery of others, which is why I know people who to this day hesitate to buy lettuce because they still remember César Chávez, the farm workers' union leader, and the labor-led boycott 40 years ago. These aren't diehard lefties, just softies. Bleeding hearts, you might say.

Brubaker doesn't believe that the exploitation of Chinese workers counts for much in China itself, and didn't even ruffle too many feathers when some Foxconn workers committed suicide. But that might change, he said. If so, that won't be so great for Apple, since China is not only the supplier of its cheap labor but its second-biggest market.

Not to worry. Apple knows what matters most to Americans -- and it's not working conditions in China, but unemployment lines in the U.S. All that outsourcing has already created a lot of grumbing. So just by coincidence, a day after Brubaker's interview appeared on the Asia Society Website, Apple let it be known what a terrific job creator it is. Apple claimed credit for 514,000 jobs, citing a study for Apple by the Analysis Group.

What's a few swollen legs, injured factory employees, and poisoned screen-cleaners when Americans are being taken off the employment rolls? Sure, there would be a heck of a lot more jobs created if all those jobs were in-sourced back to the U.S. And in all likelihood, there would be fewer factory explosions.

But that's not happening. The clock isn't about to be turned back. So enjoy your new iPad! Just don't think too hard about the people who make them.

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