Why We Don’t Build iPhones Here

The New York Times ran a story this morning about how high-tech manufacturing has largely become an Asian industry, using Apple as an example:

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

The following exchange is recorded at a dinner this February, between President Obama and Steve Jobs:

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

Cheap labor is often cited as the reason so many manufacturing jobs are lost to overseas competitors, but in the case of Apple it is not the primary reason:

It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.

China is able to put together massive, skilled, targeted pools of labor and put them to work on new tasks, in a fraction of the time it would take for a factory in the U.S. to do so.

Why?

Well, I guess because they’re Chinese. Workers are willing to live in dormitories, and be available 24 hours a day. The government has the power and inclination to take immediate and sweeping action (it has underwritten the cost for many new industries, as it interprets new demand in the market). You can find 8,000 engineers to oversee a new assembly line in a matter of days—a process which might take months in the U.S.

Are we just too lazy, stupid and entitled to do these kinds of things? Too many kids majoring in art history instead of electrical engineering (not to mention opting for careers in finance, medicine or law—prestigious and lucrative fields which have way too many people vying to get in, who might otherwise be helping push us along in a competitive technological marketplace)? Complaining about working on the weekends? Low SAT Math scores?

Maybe, for the time being, we are too stupid and entitled. There’s a whole mess of cultural and social issues which guarantee that America won’t be able to compete with Asia for high-tech manufacturing jobs any time in the near future. It’s something that needs to be addressed for the long-term. But something tells me the key to future American prosperity doesn’t involve putting workers in dormitories. We probably passed that point in the early 20th century. And Chinese workers aren’t going to live that way forever, either.

There’s an interesting subtext to the conversation: there is no immediate ideological advantage for any political party, when we try to interpret our envy for China’s booming economy—Republicans may celebrate the advantage of not having to deal with irritating labor issues, but they would be hard-pressed to explain the tremendous advantage of a government which steps in whenever it feels the need to. In lots of ways China exemplifies the worst fears of both of our political parties, and yet we envy their success.

Perhaps it makes sense to study their economy as a model for how to get away with doing things you find politically distasteful. Maybe we could take a stab at building a flexible, speedy manufacturing chain here—supported by smart government subsidy, unencumbered by labor issues and burdensome regulation, and ultimately fuelled by a labor force that still believes it can compete with anyone. I don’t think you have to put people in dormitories to accomplish that, do you?

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About hubzbubz

Currently residing in Brooklyn.
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