Short answer: it’s not just wages. The vastly different wages paid to American workers, compared to contemporaries in Taiwan or China, is a significant factor in the shift of massive supply chain operations in the tech industry over to Asia, The New York Times says in its in-depth examination of Apple and its suppliers.
Takeaway factoid someone will repeat in your earshot this week: manufacturing the iPhone in the United States would add about $65 to the cost of each unit. Is that worth it?
But it’s not just about the wages. The biggest shocks of the paper’s examination of Foxconn, one of Apple’s major suppliers for the iPhone, are about physical scale, not payscale. The plant known as Foxconn City employes some 230,000 workers, with more than one quarter of them living on-site in company-built dormitories, The Times reports. The kitchens that feed the workers churn out 13 tons of rice per day, and guards work the hallways to prevent workers from trampling one another.
And the most chilling assessments of the U.S. labor market’s inability to share in some of this new manufacturing activity speak to simple inability to compete. Read more.