Made in the U.S.A.: The Debate on Outsourcing
by Jordan Borgman
Although things have improved since the 2008 financial crash, the econ- omy has not recovered enough to completely free the nation’s students from the anxiety that grips us as senior year rolls around, and with it, the great job search. All the same, the prospects of a recent Barnard or Columbia grad are much less grim than for workers with less education, especially in fields requiring relatively unskilled labor like manufacturing, the sector around which most of the buzz about outsourcing has been coalescing.
In a 2011 Huffington Post article Shahien Nasiripour cites manufacturing job losses at 2.1 million – with that number, significant devastation hit families across the U.S. The main reason for this loss is the rise of glo- balization, and with it, the lure that many companies feel towards the low wages and little regulation that developing countries of- fer. These factors allowed China to rise as the manufacturing giant it is today. In fact, many Americans place the blame of their own un- employment on countries like China, where an overwhelming number of jobs have been outsourced. With 2.1 million jobs (and count- ing) riding on the line, many are calling for the return of these jobs to the United States. The question, however, is whether the U.S. is up for the competition.
President Obama devoted much of his State of the Union address on January 24th to pledging the “insourcing” of jobs to American workers, and many of the Republican presi- dential hopefuls have based their campaigns on this same promise. President Obama is proposing tax cuts while the Republicans want to slash regulations, hoping that this, coupled with American companies’ sense of patriotism, will be enough to bring businesses like Apple away from China and back into fac- tories on U.S. soil.
Alrighty, then. Let’s do it. Seriously. Let’s see what it really means to compete with China.
Thanks to a series of exposés that began with This American Life and continued in The New York Times and several other media out- lets, we know exactly what “Made in China” means for Apple. It means that, when Steve Jobs wanted an emergency screen change for iPhones that were about to be released in mere weeks, workers who lived eight to a room in company dorms were woken up in the middle of the night, handed a spot of tea and uncer- emoniously directed to the assembly line.
It means that workers at Foxconn, Apple’s largest supplier, normally work more than the sixty-hour limit a week that Apple sets, which amounts to more than ten hour shifts at least six days a week.
It means that some workers have legs that are so swollen from standing continuously that they can no longer walk.
It means that the average wage is less than $140 a month (this boils down to four sixty- hour work weeks and roughly sixty cents an hour). Workers are often not paid for work- ing overtime. All of this means that labor is cheaper than machines, so the iPhone that you just used to send that text message about the cool new cover of the Barnard Bulletin was made almost entirely by hand.
And it means that trying to form a union is an offense punishable by jail time.
Looking at what it truly means to compete for jobs with the world’s manufacturing gi- ant significantly influences the terms of the debate on outsourcing. The question is not whether we should be bringing manufactur- ing jobs to America’s shores. The question is what we are willing to give up if we truly want to make that happen.
Because, of course, there are reasons why Apple and many other American companies have shifted their operations oversees. There are the infamously lower wages, the compara- tive lack of regulation, and other factors that the U.S. would have difficulty reproducing, such as the close concentration of many sup- pliers in certain cities that are manufacturing hubs. We want these jobs to come back home, but as a nation we haven’t thought the rami- fications through. As Americans, we’re condi- tioned into thinking we can have it all, but in this case having it all simply may not be pos- sible. Bringing these jobs back would require sacrifice, and in this time of loss, more sacri- fice isn’t something many people are willing to contemplate.
Much of Apple’s fame and incredible profit has been built on its frequent incredible tech- nological updates and new models—be it computers, phones, or never-before-seen tab- let devices. Aside from the necessity of having a gigantic labor force to produce mountains of gadgets in extremely short lengths of time, the company also needs flexibility—the flex- ibility to, say, wake up hundreds of workers in the middle of the night to change a product, which is possible because all these workers are housed in the dorms of factories that run 24/7. If these jobs were to be moved to the U.S., where this sort of thing is unquestionably frowned upon, Apple’s versatility would be crippled. Moving Apple jobs to the U.S. would mean longer intervals between prod- ucts and, when a new product is released, a much, much longer waiting period before it gets into your hand. This in turn means less innovation—and rapid technological innova- tion has arguably created more jobs at home than end up being lost to outsourcing in Chi- na. The problem, of course, is that jobs gen- erated have been “white collar” jobs, rather than the “blue collar” trades concerning un- employed Americans.
Then there’s the obvious hike in price that would come with employing American work- ers. Jon Stewart revealed on The Daily Show that if workers weren’t working in conditions like those at Foxconn, an iPod would cost twenty-three percent more. (In reference to the recent spate of suicides at the factory, a frowning Stewart complained, “I would ex- pect if we were working people to death we’d be getting, like, thirty to thirty-five percent savings.”) With customers accustomed to carrier contracts that guarantee them a new phone every one or two years at no extra cost, the ripple effect of higher costs to Apple and companies like it would not pass without complaint.
Assuming that American consumers are unlikely to happily welcome either higher costs or lesser innovation in their products, the only option left to lawmakers is to make the U.S. more like China. This means slash- ing wages and benefits, lowering taxes and disbanding a lot of regulation. While no one is eager to talk about the former pair, many politicians have readily jumped on the latter. The way that regulation is discussed nowa- days, one would think that it was nothing but a worn-out collection of needless red tape and annoying bureaucracy. To some extent it undoubtedly is, but even the most frustrat- ing of America’s regulation was the product of decades of struggle. Regulation is what pre- vents another Triangle Shirtwaist Factory fire; the lack of it is what prompted grisly exposés such as Upton Sinclair’s The Jungle. Is there needless red tape in regulation? Certainly. But there is also that element of it that pro- tects American workers from sixty-hour work weeks, hazardous nerve-damaging chemicals, preventable deadly explosions, and child la- bor—all of which Apple has confirmed exists in its suppliers’ factories.
What, then, are we as Americans willing to give up? If it’s not the 2.1 million jobs, what will we give to get them back? Human rights groups have rightfully attacked Apple’s sup- pliers, but for now the truth remains that our current model is successfully profitable. Should Apple have a clearer commitment to human rights simply because that is the moral thing to do? Many will say yes. Should Apple return jobs to the U.S. simply for the good of the country that created it? That is the tie that many politicians are banking on. Yet will any of these moral arguments ultimately prove more important to the company than its bot- tom line? That remains to be seen, and for many of us, it remains out of our hands.
Is it, though? This article was typed on a Mac. Tomorrow I’ll be checking for e-mails on my iPad. Most of the people I text will receive the messages on their iPhones. We have tre- mendous power as consumers. If we demand that manufacturing jobs be brought back to the U.S.— from Apple or from any other com- pany—our voices may just be heard.
But if you decide to use this power, first tell me this: what, precisely, are you willing to give up?
Though I agree with the problem statement presented by the author, for me the following is the more important question — “Is there a middle ground / a viable solution for this problem?” — some solutions which come off the top of my head are :
1. Innovate / Create niche industries – Change is constant. If it is not outsourcing, it would be something else in the near future which will eat away the jobs.
2. Educate & educate even more – The economy tanked, everybody would agree on that, but the quest for education , I will cut the BS – the greed to make more money with a better degree didn’t. Similarly, there are a few industries which will always weather the storm better than others.
As someone great once mentioned, one has just got to see off the night to catch a glimpse of the rising sun.
I’m glad to hear your thoughts, and both the solutions that you’ve presented are good ones. However, I think that they miss the larger issue: that most of the workers who are being affected by manufacturing jobs being outsourced are also the ones who are least likely to benefit from your ideas, however correct and necessary they may be. Here are my thoughts, respectively, although I’d love to hear what you think:
1. The innovation and creation of niche industries is already happening, thanks not least to outsourcing. I think that I mentioned this in the article, but outsourcing does bring with it the versatility and faster turnaround that is absolutely crucial in technology (note the Steve Jobs example). Because of this, some analysts argue that more jobs are actually created by outsourcing than lost because of it. The only problem is that there’s a disconnect: these newly created jobs are not being filled by the same people who lost their jobs due to outsourcing. The jobs created by the innovation allowed by outsourcing tend to be in exactly the niche industries you were talking about, which relies on a young, educated, tech-savvy and above all white collar workforce. By contrast, the jobs that are being lost are blue-collar manufacturing ones. The middle-aged man who has worked in a factory all his adult life is simply not going to the same young yuppie who creates the next Angry Birds—and it’s the latter that these new jobs are going to, not the former. So the question is less one of new industries (particularly those that rely on technology and a highly educated workforce), but where that middle-aged manufacturer will fit in in this brave new economy.
2. Your second proposal might be the solution to the first, but not in all cases. That nineteen-year-old who joined the manufacturing sector right after high school only to get laid off? Yeah, educate and educate more will probably work fine for him. But this kid isn’t really the one that everyone’s worried about when they talk about the loss of jobs due to outsourcing. The concern nestles itself instead around the middle-aged man with a family to support who has been in manufacturing for the last twenty years or so. Is education the solution to him? Perhaps—but then again, that means that you’re asking someone to suddenly switch lives mid-career, which is a hurdle for anyone. He will be facing a learning curve much steeper than that of the nineteen-year-old, and may also look much less appealing to potential employers than that same nineteen-year-old to whom retirement is still a distant dream. Furthermore, education requires sacrifice—monetary, of time—that a man with a family relying on him may simply not have. More education and a new career may also mean relocation, which again, is made more complicated by family and obligations. So again, while your solution is a good and valid one, it nonetheless faces the same disconnect as the first, where the beneficiary and the intended audience aren’t necessarily one and the same.
Those are just some quick thoughts, and I’d love to hear your take. And most of all, thanks for taking the time to both read and comment on the article.
Best,
Jordan