On Wednesday, the New York Times posted an extensive report called "In China, Human Costs Are Built Into an iPad," which dives into Apple's supply chain and examines, as the title suggests, the human cost of making gadgets.
It's not the first time Apple's global assembly line has come under fire, nor is it the first time an American company has taken heat for using cheap outsourced labor — Nike's sweatshops being the most famous, perhaps — promoting terrible working conditions to make a buck.
What's interesting here, however, is that the New York Times also published the piece in Chinese, and it's translating the responses from Chinese readers about the issue. Between Apple's response, the report and the comments from Chinese readers, the dialogue created here is painting what's probably the most complete portrait of what it takes to fuel the world's gadget addiction.
U.S. & World
If you haven't read the seven-page NYT piece by reporters Charles Duhigg and David Barboza, check it out here. It's well worth it, and it digs deep. From the article: "The reporting is based on interviews with more than three dozen current or former employees and contractors, including a half-dozen current or former executives with firsthand knowledge of Apple's supplier responsibility group, as well as others within the technology industry."
The Bad Apple
Apple, like many other companies around the globe, looks to China for cheap, bulk labor. At the heart of this system is Foxconn, the world's largest manufacturer of tech goods (an "estimated 40 percent of the world's consumer electronics," NYT reports) that employs 1.2 million workers and supplies the likes of Nintendo, Amazon, Samsung, Nokia and more. Foxconn is also usually at the heart of Apple controversies in recent years.
Spare living spaces ("20 people to a three-room apartment"), harsh work schedules ("employees laboring more than six days a week"), dangerous conditions ("over a hundred workers injured by toxic chemical exposures") and a deadly factory explosion have led to investigations, criticism and workers protesting — by threatening a mass suicide in protest, for example. "Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms," according to the report, and some details sound straight out of 1984-inspired dystopian science fiction:
Shifts ran 24 hours a day, and the factory was always bright. At any moment, there were thousands of workers standing on assembly lines or sitting in backless chairs, crouching next to large machinery, or jogging between loading bays. Some workers' legs swelled so much they waddled… Banners on the walls warned the 120,000 employees: "Work hard on the job today or work hard to find a job tomorrow."
The picture painted is obviously grim, and it boils down to this: Apple, which still manages to post record profits and sits on some $90 billion in cash has a lot of money and brings in a lot more. As the report puts it, for the world's suppliers: "When news arrives that Apple is interested in a particular product or service, small celebrations often erupt. Whiskey is drunk. Karaoke is sung." Apple's interest can make or break you as a supplier, the gains are great, the demands are enormous and it sounds like a lot of corners are being cut in the pursuit of the almighty dollar.
"We're trying really hard to make things better," said one former Apple executive who spoke to the New York Times but didn't want to be named, "but most people would still be really disturbed if they saw where their iPhone comes from."
Pictured: The aftermath of a factory explosion in an area where Foxconn puts the final touches on iPads. Four were killed, eighteen injured. (Credit: Color China Photo/AP, via NYT)
What Apple's Doing About It
Apple has had a code of conduct for its suppliers since 2005. This code is public, and the company lays it all out on its website here. The gist: it "requires suppliers to provide safe and healthy working conditions, to use fair hiring practices, to treat their workers with dignity and respect, and to adhere to environmentally responsible practices in manufacturing." This, of course, sounds like it's at odds with the section preceding this one.
More than the code, Apple also audits its suppliers annually, and has even started to audit its suppliers' suppliers. This auditing process, which saw its first publicly published report in 2007, has not only found severe violations, but violations that show up year after year. Apple's 312 audits over the span of 2007 to 2010 found workers plowing through double-long shifts and working more than 60 hours a week, evidence of "involuntary labor, under-age workers, record falsifications, improper disposal of hazardous waste and over a hundred workers injured by toxic chemical exposures," and even that some workers "received less than minimum wage or had pay withheld as punishment." The most serious infractions, such as employing under-aged labor, are called core violations.
Then, last year's audits, of which the company carried out 229:
There were slight improvements in some categories and the detected rate of core violations declined. However, within 93 facilities, at least half of workers exceeded the 60-hours-a-week work limit. At a similar number, employees worked more than six days a week. There were incidents of discrimination, improper safety precautions, failure to pay required overtime rates and other violations. That year, four employees were killed and 77 injured in workplace explosions.
It's clear that change could come about if Apple wanted it to. While Apple doesn't directly own these other companies, its influence over them isn't all that different than if it did. Talking to a consultant from Business for Social Responsibility (or BSR), a company that has worked with Apple and Foxconn to improve conditions, Apple's influence is painted as absolute: "We've spent years telling Apple there are serious problems and recommending changes… They don't want to pre-empt problems, they just want to avoid embarrassments."
He went on: "We could have saved lives, and we asked Apple to pressure Foxconn, but they wouldn't do it… Companies like H.P. and Intel and Nike push their suppliers. But Apple wants to keep an arm's length, and Foxconn is their most important manufacturer, so they refuse to push."
The most cut-and-dry analysis in the report once again from within Apple:
"If you see the same pattern of problems, year after year, that means the company's ignoring the issue rather than solving it," said one former Apple executive with firsthand knowledge of the supplier responsibility group. "Noncompliance is tolerated, as long as the suppliers promise to try harder next time. If we meant business, core violations would disappear."
For its part, Apple's CEO Tim Cook fired back at the report with a lengthy, company-wide email that promised diligence and denied that Apple turns a blind eye to its supply chain workers.
From the email:
We know of no one in our industry doing as much as we are, in as many places, touching as many people… At the same time, no one has been more up front about the challenges we face. We are attacking problems aggressively with the help of the world's foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.
Questions abound: Is it fair to blame Apple? Should Foxconn take the heat exclusively? Could or should Apple do more? Is our gadget lust part of the problem, or is this too large of a problem to pin it on any one thing? (Or even too large of a problem for Apple to handle?) None of these questions have solid answers — yet. As you'll see in the next section, they're certainly on the mind of many.
Because the report was also published in the Chinese business mag, Caixin, Chinese readers have been able to weigh in, too. The New York Times then translated these responses into English, posting them up here.
Plenty of readers are upset:
I read this story and I'm saddened. It's not only Apple that should be blamed, but also the system that tolerates its existence. Made-in-China should not be synonymous with the blood and sacrifice of young lives. — Evita
For some readers, it's business as usual:
By the way, construction workers and farmers are also living a harsh life in China, shall we also boycott housing and grains? — Zhou Zhimei
Apple's business is a good thing:
If people saw what kind of life workers lived before they found a job at Foxconn, they would come to an opposite conclusion of this story: that Apple is such a philanthropist. — Zhengchu1982
Some see Apple as a necessary evil:
Without Apple, Chinese workers will be worse off. I hope China can some day soon have dozens of its own companies like Apple, who (only) work on high-end research and development and send manufacturing lines to Africa. — Anonymous
And some saw it as a problem far larger than just Apple and Foxconn:
Even though Apple should be ethically condemned, the key point is: whether the working conditions inside the factories are supervised by law. This (supervision) is the duty of judicial officers and labor unions. Now everything is driven only by G.D.P., so which government official would dare supervise those companies? They (the governments) have long reduced themselves to the servant of the giant enterprises. — Occasional Think
Pictured: Protesters in China dressed as Foxconn workers and Steve Jobs. (Credit: Reuters, via The Atlantic