Beyond iPhone in China, I have a larger question. Let's say I were building product in the US with child labor in unsafe conditions not adhering to US laws and regulations. Would I be allowed to sell that product in the US? Probably not. If I were doing similarly around the world then seeking to sell that product in the US, it happens to be the case that I could.
Why is that the case? Why is it that product built in foreign countries that do not adhere to US laws and regulations on manufacturing and labor are allowed to be sold in the US?
But Apple, or any other similar multinational, claims no responsibility for any abuse of workers or economic laws, because it's not them it's Foxconn. The same as their explicit statements in the article, and the article's emphasis, that all these dealings are with partner companies. It allows Apple et. al to stay at least one remove from abuse, bribery, corruption, pollution, etc.
It's the same when companies hire contracting agencies to run their warehouse operations. It's not Amazon's policies, it's the staffing/contracting/warehousing agency, who run operations according to Amazon's rules and just get it done, however they will. "Now be sure you don't abuse your workers while keeping to schedule and standards, wink wink."
Or when ag companies buy tomatoes, for example, from Mexico, where the tomatoes are grown in healthier conditions than the workers live. Occasionally the abuse of these ag workers will surface, and companies like Walmart will point to yet other third party companies that they outsource compliance and certification to. "Our compliance partner has made a complaint to our ag partners, and it's all good."
I believe one of Apple's higher ups has talked about child labor before.
I'm not sure if it was Steve or Tim but the convo was that its impossible to handle without hurting the communities because the norm is child labor over there. So the conditions for the children are worse if they have no labor. It's really complicated and not something that you can judge from an arm chair position, you have to go over there and see it with your own eyes.
I understand the cruelty and inhuman treatment sides of child labor. But it is not black and white. Context is important, if not crucial.
Use my own case as example. My family suffered financial hardship due to some misfortune when I was 15. I really wanted to work to help my mother. There were rarely part-time jobs in my hometown in China, then. I could quit my study and try to find a full-time job, which I gave serious thoughts. I knew several people who joined workforce around that age, either due to family financial situation like mine, or they thought they had no future in school (it was already very competitive then) and it was better to work early and accumulate working experience. In this sense, they were "child" labors. But they chose to. They were not mistreated because they were under aged. In my view, they made rational decisions to join the workforce.
One of them, a classmate's brother, returned to school after working for 3 years, when their family financial turned around.
Fortunately, our family decided to open a small business. I tried to get as much time as I could to work there to help, while study hard so that I could go to the best colleges. For two years, I didn't have much time to hang out with friends. So I was a part-time "child" labor. But it was my decision. Nobody forced me. I don't regret it a bit.
Let's face the reality. There are many kids who are just not interested in school and are not good at it. There are two options. They can either hang around and be cool, which is a good situation, considering kids of that age tend to get into troubles if their minds are not occupied. Or they can get a job, learn something from the job, develop good work ethics, etc. What do you think is the better option?
Interesting. Perhaps we should focus more on whether the labor is safe and meets reasonable time requirements than to arbitrarily impose an age cutoff.
I agree with you that attending school is not always the same as learning. Before recent western history many children became apprentices in valuable trade skills which often paid well. Maybe we should start looking at such options again.
To add to this, no on will tell you they are for child labor, but if you're going to try to eliminate it you have to provide alternatives. In the US we have free public education available to all children by law; other countries can't provide that with the resources available. Having a large unemployed population leads to other negative societal outcomes (crime, violence, etc). Basically, you can't just eliminate child labor without providing alternatives or incentives.
If you have a family of 6 (lets assume 2 parents and 4 kids) all working for 50 cents an hour.
Saying "your kids have to go to school and not work" and then paying the adults 3 dollars an hour. The family winds up making more money without the kids having to work. (in this admittedly limited example, the family makes double)
If you take the kids out of the equation without increasing the parental pay, then yes, you'll have a harder time with things, as the family just lost 66% of their income, which will mean cutting back.
So you are correct that it is complicated and "stop kids from working" isn't the FULL answer. But it doesn't mean that there aren't solutions - plenty of countries have child labor laws without falling apart.
I agree that labor cost is going to go up. And the whole point of this being enforced from the US side through tariffs and import regulations is so that when country A enacts child labor laws, Apple doesn't just move to country B.
And I'm aware that it's a complicated, sensitive topic. That was my point. But dismissing it entirely because solution X creates problem Y instead of finding solution Y (which probably causes problem Z, which will have a solution eventually too) is not the right answer. Saying "Well we just can't solve this problem, they get to live in squalor and there's NOTHING that can be done to help them" is ridiculous.
Not so, context matters. One of the drivers for anti child labour laws was to ensure that children were able to attend the free schooling that had been introduced. The driver was not preventing children from working per se, it was making sure they got an education. For example the long school summer holidays were a pragmatic compromise introduced to allow children to work on farms during harvest time. But if free schooling isn't available, or isn't provided up to the same age level, that motivation goes away.
Well, I believe that the best thing is to phase things out rather than go cold turkey. Otherwise you will get a backlash like the civil war that happened here in the USA.
Your command of US history is not so good -- the Emancipation Proclamation was made late in the war. The argument when the war started was about escaped saves; the Northern states were ignoring federal law and asserting state's rights to free them.
Right. The proclamation was made after the civil war started. But the war was because the North started to act as if it no longer agreed with slavery, which the South saw as a threat, since it depended so much on it. Lincoln promised that slavery would not be allowed in new territories, the south states saw the writing on the wall, and that caused the war. Yeah, the United States didn't exactly quit cold turkey before the war but close enough I think.
>>[1] The Civil War started because of uncompromising differences between the free and slave states over the power of the national government to prohibit slavery in the territories that had not yet become states. When Abraham Lincoln won election in 1860 as the first Republican president on a platform pledging to keep slavery out of the territories, seven slave states in the deep South seceded and formed a new nation, the Confederate States of America. <<
Yes, that's the lie the corporate execs tell. People lured into a trap would rather live in the trap than die.
It's not impossible, for Apple with $XX Billion in profit hiding in tax shelters, to pay better than subsistence wages to their subcontracted workers (or invest in community resources for the cities where their factories are, or similar).
Wages at Foxconn and similar firms are way above subsistence levels. They're far above mean wages for industrial workers in China too, plus Apple specifically writes pay increments into their contracts with the manufacturers to attract the best workers, which is why workers prefer to work on the Apple lines to the ones for Samsung, Microsoft, etc which have laxer standards and don't pay as well.
Not trying to be Peter Theil here but why is child labor considered inhuman and cruel? Aren't they getting a chance to learn by doing as opposed to sitting in the classroom and getting to the same place in another 10 years?
"getting a chance"? They're children, they don't have a choice. It's not like they're weighing the options and deciding that school just isn't right for them. Forced labor, child or not, is inhumane and cruel.
And then obviously, you don't learn anything on an assembly line. Please put some more thought into this stuff if you ever plan on having kids.
I'm in West Africa now and I'm experiencing this first-hand with regards to resource exploitation.
Interestingly, the large oil players (Shell, BP, etc.) do actually mandate some things - i.e. they are not really supposed to buy oil from countries that don't have functioning elections, some environmental protections, human rights, etc. etc. I believe this is a requirement of the World Bank, and the UN.
This is why you see shill elections in a lot of West African countries - they need it to look like they are functioning democracy, even though a country has had the same "elected" president for 22 years :)
Also, this is why Africa loves dealing with China, who doesn't get involved in their internal politics.
Because that's capitalism in today's world. It's the "free market" at work. I don't think the focus should be on preventing people from using "bad labour" but rather on making it so that there would be no reason to use "bad labour". As much as people on HN especially would be so critical of Socialism, they often shy away from these topics - beacuse they are uncomfortable to think about.
The fact of the matter is that it's not good for business - neither for the people in government, nor for Apple, to be force Apple to make their products where there is some guarantee that the workers are being treated fairly. It's worse for Apple, of course, but politicians don't want to lose their lobbying money or their power.
Lots of people will be saying "it's horrible what they're doing" without realising the cause - the unustainable model of global capitalism that is forever requiring higher and higher returns. Such growth for this kind of labour is much harder to accomplish where it costs more, such as in the US.
It is almost 20 years old and notes that industrialization and modernization is a process. It doesn't really work for a country to get rich without climbing it [edit: except free money, like with oil], including simple jobs in the beginning -- and now China is doing it.
In my book, it is good for humanity with a billion less horribly poor people. It doesn't feel bad to be on the other side of that, because of ideology?
Thanks for posting this. It's incredibly Euro-centric to sit here and complain about the perceived child/human rights abuses that happen in China when those very exact things are what industrialized Europe.
I really wish we would all just spend more time focusing on our countries and improving our quality of life through trade and the free exchange of ideas. Other countries don't have to listen to our lessons or advice, or our experience, but being critical gets us nowhere.
>It's incredibly Euro-centric to sit here and complain about the perceived child/human rights abuses that happen in China when those very exact things are what industrialized Europe.
It's also incredibly Euro-centric to be thinking that other countries ought to be following the path Europe and the US took to capitalism, and then to say that these countries should be implementing it in such a way that there's the same worker exploitation everywhere.
Worker exploitation isn't some thing in the past. It doesn't just happen in China, it's happening all the time and everywhere. But the case of it is so readily apparent in China it ought to be a case against worker exploitation as a whole. Yet some people still say "nevermind these countries, they're just on their way to being like us". We do not stop to question whether being like Europe is actually beneficial?
I think countries should be free to choose their own paths and for those countries to find their own unique implementations of economic policy and whatnot is fascinating, and we can always learn from them and implement the good things while eschewing the bad. As long as they don't interfere with what my country wants to do, they can do whatever they want.
Even Marx said that capitalism and its rapid use of industrialisation is better than the feudalism that preceeded it in many places. I do not however agree that it's somehow better for there to be cheap labour and low wages in the thought that this will lead to progress. Rather we should compare our situation (speaking from the perspective of somewhere there are 'good' standards for workers and better wages than in some places) to those of the less fortunate workers, and see that we are both being exploited.
They are going through the same thing as us, but we still have people saying that capitalism will move us "forward". No, capitalism in these countries simply means that their exploitation isn't as readily obvious. It's "friendly". This is why there are pool tables in offices for example, it's there to placate you while your wages fail to represent the work you do. The discrepancy between the value of what is produced and the wages given in return is most visible in countries like China in these factories. It's less readily obvious when your boss lets you play pool in the office.
As far as I can tell, the only "indistrialization and modernization" that's going on is workers being treated better, while retaining the idea that it's fine to do certain things that, say, damage the environment and it's fine to maintain the discrepancy between the labour applied and the wages.
I think it ought to be abandoned as a whole, and this concept of "limits to what capitalists can do is better than stopping them from doing it" is abandoned. That's my two cents anyway.
I would ask for examples of alternative economies being built up and creating nice and democratic countries, but we both know that if you had any supporting data you would have started with it. :-)
Please note that experiments with alternative societal models often have failure modes like dictatorships and/or a large part of the population dying in horrible ways and/or... It is not something to experiment with lightly.
It is a pity that you proponents of alternative models are so full of hot air, good research and analysis would be needed; there ought to be better ways. Most of you guys sound like you are paid to discredit everything but the status quo.
>Please note that experiments with alternative societal models often have failure modes like dictatorships and/or a large part of the population dying in horrible ways and/or... It is not something to experiment with lightly.
I agree it's not something to be taken lightly, but saying that there have been failures in the past is not an argument against trying to fix those failures by systematically identifying them. The modern Marxist movement is focused on finding the failures of the 20th century attempts at Socialism.
Besides that, calling out capitalism for the exploitative system that it is by no means implies I'm supporting any particular societal model, nor that I approve of other's societal model. It only means that I disapprove of capitalism.
And you know, I'm sure that during feudalism there were lords, barons and peasants all saying the exact same thing you are saying right now. You can't simply dismiss every other model that society may be fitted to by pointing out that atrocities were committed in the past. That's painting with a brush that is too thick.
>nice and democratic countries
And you're even assuming democracy is something inherently good. There is also the distinction between 'pure' democracy and 'bourgeois' democracy that's worth knowing about, as Engels wrote about.
Almost no one is opposed to globalization, per se. We are opposed to globalization that drags down worldwide avearge income, and traps people in subsistence lifestyles, paying people 5cents of every $ of value they create, and then boasting about they should be happy they aren't dead.
The article doesn't even make sense! He's actually arguing that low wages are better than zero wages, while low wages are also better than high wages, and that the wealth creation whose impact he boasts about isn't even having a subsantial impact!
> First of all, even if we could assure the workers in Third World export industries of higher wages and better working conditions, this would do nothing for the peasants, day laborers, scavengers, and so on who make up the bulk of these countries' populations. At best, forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy, leaving the poor majority no better off.
He doesn't even think to consider that, for example, a tax+entitlements scheme, that every civilized nation has, could stave off this "labor aristocracy". Nor does he explain why a Western labor aristoracy is OK, but an Eastern labor aristocracy is not.
The article is thin logically-bankrupt apologetics.
I can't hear Krugman argue what you claim in that video? Are you bluffing or did I misunderstand?
Can you transcribe exactly what support your extreme claims (without taking it out of context from where Krugman said he supports globalization and why he do that.)
Did Krugman EVER talk about any other way of countries to start getting rich and going towards becoming nice societies (democratic, high education, taking care of people, etc)?
If he can show that, I'd guess he'll get another Nobel... at least. :-)
(Krugman discussed income inequality inside societies a bit, not relevant here. And a bit about US politics.)
Given the wide disparity in income on the high side, anything that increases equality would necessarily bring down average wages. When it comes to globalization the west must understand its part of the 1%.
I would seriously question the long term stability of the countries who have been on the receiving end of "free money" - whatever the natural resource is.
> It doesn't really work for a country to get rich without climbing it
Bali went straight from having an agrarian economy to a service-based economy without ever going through an industrial period. It can happen given the right conditions, but it isn't common.
> As much as people on HN especially would be so critical of Socialism
Where do you get this from? Pretty much everyone from Europe is very grateful for the various safety nets the countries have built up there, especially in West-Europe.
It seems to have flipped as attitudes in Silicon Valley have flipped. Majority used to be Ron Paul supporters, now those attitudes seem to have matured to a more nuanced worldview.
> Why is it that product built in foreign countries that do not adhere to US laws and regulations on manufacturing and labor are allowed to be sold in the US?
Because of our trade rules. Modern trade agreements are pretty much about mandating labor/environmental regulations and respect of IP (mainly pharma/movies/music) in exchange for easier access to the the US market.
Question - when the US, Europe and Japan were industrializing from 1880s through 1960s and dragged everyone into disastrous wars, did any other market complain about worker safety or abuse or pollution (the famous London fog etc.) and refuse to buy products?
When now other nations are going through an industrialization phase that's actually far more respectful of worker rights than the West's industrialization was, why complain?
"did any other market complain about worker safety or abuse or pollution and refuse to buy products?"
Pre-industrial revolution, living conditions were pretty poor working conditions were pretty poor life expectancy was pretty poor, so it wasn't exactly making things worse. Despite all the problems caused by industrialisation, it was still a net positive.
Now that we've progressed through industrialisation to a point where life expectancy has dramatically improved, along with living conditions and all the rest, it's given us a point of comparison.
Countries that are going through an industrialisation phase aren't being criticised in comparison to a pre-industrialisation state, they're being criticised in comparison to what other post-industrialised countries have achieved. Sure, it's an unfair comparison, but the first time around, that comparison didn't exist.
Indonesian people weren't buying Europe's products and reaping the benefits of the London smog, modern US/European/Japanese people are enjoying the benefits of modern exploitative labor in Indonesia.
What gives you the illusion that other nations are more respectful of worker rights than the US/EU was in the past?
China's cities are poisoned with smog today, for just one example.
Maybe we shouldn't allow that. Perhaps we should apply a tax to adjust for environmental and labor impact. I imagine it would be $0 from Europe. A medium tax from China to account for the complete lack of environmental regulation. A high tax for products from places like Bangladesh.
There is nothing that says we have to allow for free trade. It certainly hasn't been a net-benefit to the United States itself.
But wouldn't that just burden American businesses against foreign competitors? It would make it so Americans would quit offshoring and simply incorporate outside of U.S. jurisdiction. That or lose to Chinese businesses that are less regulated and are thus free to be "more innovative"
How does incorporating somewhere else help? Tariffs are applied to imported goods, and presumably how said "high tax" would be applied. It doesn't matter where the company is incorporated.
You would not be allowed to build such products because of US labor laws. Other sovereign countries have their own laws which they enforce within their borders and then we engage in trade. Why is it that the US should be enforcing its domestic regulations on other countries with entirely different circumstances which we know little about?
The question wasn't about other countries, it was about the US, specifically regulating the sale of products 'not buildable' in the US. Stated another way, if something is only built to be sold, why is only building it regulated; why not regulate selling it aswell?
If it is built in the US, regulating the sale would be redundant, as manufacture would already be illegal, and more ethically made products don't look any different.
If you want, say, textile workers to have humane working conditions, you regulate the textile manufacturing industry, and you want enforcement officers in the garment district, not the retail district.
>If it is built in the US, regulating the sale would be redundant
Obvious, but the question was about things NOT built in the US and actually illegal to build in the US. Why are they not illegal to sell there?
First, as Americans seem so easily to forget, other countries actually have their own governments. Why should the US government try to enforce US labor laws inside the borders of other countries?
Second, trade agreements exist and are a more effective way to do what you want.
Third, it is impossible to tell how a product was made by looking at it. How would you enforce a law that makes a product illegal based on something invisible?
"Would I be allowed to sell that product in the US? Probably not."
I can't think of any legal reason why not. If the product meets US electrical/safety standards, and isn't in breach of IP such as patents, sure, it could be sold.
Whether anyone would buy it is a different question: I wouldn't be surprised if a product built in such a way were boycotted.
I would also expect to see court cases and fines (probably in excess of all profits for the product), for the labour conditions.
So sure, you could probably sell it. You probably wouldn't profit from it though.
Let's say I were building product in the US with child labor
in unsafe conditions not adhering to US laws and regulations.
Would I be allowed to sell that product in the US? Probably not.
I don't see why not.
You read in the news a lot about how INS will raid a farm or meat processing factory to arrest illegal workers. Those conditions are often really unsafe and there are also teens working there too.
And yet those farms are still able to sell their produce.
It's actually even worse than that (for everyone else). In Q3 2016 Apple had 104% of the profits -- because most of the other companies in that industry had no profits at all.
Samsung came in at #2 with 0.9% of profits (they usually do a little better, but the Note 7 thing happened).
>The well-choreographed customs routine is part of a hidden bounty of perks, tax breaks and subsidies in China that supports the world’s biggest iPhone factory, according to confidential government records reviewed by The New York Times, as well as more than 100 interviews with factory workers, logistics handlers, truck drivers, tax specialists and current and former Apple executives. The package of sweeteners and incentives, worth billions of dollars, is central to the production of the iPhone...
So, Apple's high profits depend on a whole lot of government subsidies in China. And then Apple takes that cash and protects it from US tax rates by storing it in Ireland. And now, some interesting questions are raised about the legality of that tax scheme.
Maybe the US doesn't need more businesses like Apple.
> So, Apple's high profits depend on a whole lot of government subsidies in China. And then Apple takes that cash and protects it from US tax rates by storing it in Ireland. And now, some interesting questions are raised about the legality of that tax scheme.
They don't depend on them. Apple would still profit nicely (albeit less) without these subsidies.
But then again the same thing could be say of various players on various industries. Detroit was, too, a city built thanks to a lot of subsidies and tax breaks; oil companies extract tremendous profits thanks to subsidies, tax breaks and all kinds of government help... so on and so forth.
Aside from that, I don't think there's a question to be raised about the legality of Apple tax scheme. There's a question to be raised about it's fairness, sure, but not the legality. Apple is using the same loopholes any other corporation can exploit (and they all do, to the extent they can or know how to).
What we need is updated international and national tax codes that start taking these things into account. Most of the current legislation was designed for a time much simpler and with less access to global markets and manufacturing chains.
> What we need is updated international and national tax codes that start taking these things into account. Most of the current legislation was designed for a time much simpler and with less access to global markets and manufacturing chains.
it's a fair point.
sometimes i think: who cares if Apple or Google or Exxon are headquartered in Cupertino or Mountain View or Dallas or New Delhi or Bahrain or Shenzhen? what difference does it make? who gives a shit? they don't want to pay taxes and neither do i.
I have a hard time understanding why (presumably?) a US citizen would be against foreign governments subsidizing US companies. Isn't that a good thing? After all this is a US company that employs hundreds of thousands of Americans and in 2015 paid $2.7bn in tax on it's global profits at an overall rate of about 25.5%, most of it in the US.
well it's an interesting point. i don't live in the USA of 1955.
in today's landscape, i don't know how to tell if Apple's location actually matters to me. what if Apple were headquartered in Finland, Japan or China? they don't pay my taxes. they don't employ me. they bring a lot of people from outside the US to do their work. they also outsource a ton of work to other countries.
why would I really care about Apple's location or country of incorporation? i bet people in Ireland care a lot more than i do.
Ireland gets a fraction as much tax money from Apple compared to the US, which gets the lion's share. That's kind of the point - the US thinks they should be getting even more.
But I'm sure Irish taxpayers would welcome getting the $billion+ tax revenue currently going to fund the US government as well, if you really don't want it.
> In China, the competition for companies is ... often focused on manufacturing partners, rather than multinationals themselves.
This article doesn't include the word "unemployment" which is the reason for this focus. Though the official unemployment rate is 4%, the real rate is believed to be at least 12, not counting the non-existent migrants who aren't legally permitted to travel due to the hokou system.
(I am always astonished when I hear that China is supposedly "beating" the US: by what possible metric could this be true?)
It is, but Apple seems to have become the largest customer and Foxconn's revenue seems to rise and fall with Apple's iPhone sales. This article [1] from 2013 states that "Hon Hai [...] draws an estimated 60 to 70 percent of its revenue from assembling gadgets and other work for Apple Inc.".
They've put pretty typical Apple-esque levels of effort into the entire chain, including financial shenanigans that got them in trouble with the EU. It'll be interesting to see whether they can make good on their promise to onshore some of their manufacturing.