Putting a human cost on the iPad

(CNET)  This story first appeared on CBSNews.com's sister site, CNET.com

A day after Apple announced record profits, a new report provides a detailed look at the conditions that workers at its suppliers in China have had to endure.

The company, which reported $13 billion in profits yesterday, has been plagued by reports of long hours, unsafe working conditions, and physical punishment of employees in factories that make parts for its popular devices. Dozens have been injured and a handful killed in explosions and other accidents at the plants.

In a seven-month span last year, two explosions at iPad factories in China, including at the Chengdu facility, killed four and injured 77, according to The New York Times. In an exhaustive profile, Times reporters Charles Duhigg and David Barboza put a name and a face to the human price sometimes paid for those profits, spotlighting the final months of one of those workers who died that day in Chengdu.

It's unclear whether these allegedly unsafe working conditions have been thoroughly addressed. Apple previously adopted a code of conduct for suppliers, but the Cupertino computer maker did not immediately respond to a request for comment from CNET this evening.

The report focuses on an explosion at a plant in Chengdu, in southwest China, last May killed four and injured 18. Chinese TV showed clouds of dark smoke emanating from the building and there were fears that the building's collapse was imminent.

In late 2010, Lai Xiaodong, a 22-year-old with a degree, moved to Chengdu, a city of 12 million in southwest China that has become one of the world's most important manufacturing hubs. Lai landed a $22 a day job repairing machines at Foxconn Technology's factory, where the iPad was being produced. (Foxconn has plants throughout China and produces roughly 40 percent of the world's consumer electronics for companies such as Microsoft, Hewlett-Packard, Dell, and Sony.)

Apple's Supplier Code of Conduct states that plant workers are not to work more than 60 hours a week, except under emergency or unusual circumstances. However, according to the Times:

Mr. Lai was soon spending 12 hours a day, six days a week inside the factory, according to his paychecks. Employees who arrived late were sometimes required to write confession letters and copy quotations. There were "continuous shifts," when workers were told to work two stretches in a row, according to interviews.

At the end of the day, Lai would retreat to a bedroom just large enough for a bed that he shared with his girlfriend. Many of his co-workers weren't so privileged; company dorms house 70,000 employees, often squeezing 20 people into a three-bedroom apartment, according to the report.

Following the lead of other tech companies, Apple decided in 2005 that it needed the Code of Conduct to ensure "that working conditions in Apple's supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible." The company, which conducts annual audits of its component suppliers, recently reported that it had increased its audits by 80 percent compared with 2010.

Related stories from CNET:
Apple's latest supplier report details labor issues
A tale of Apple, the iPhone, and overseas manufacturing
Apple criticized in Chinese environmental report

Apple noted in its latest progress report (PDF), which was released after the Chengdu explosion, that it had "significantly" reduced instances of child labor but that the 60-hour work week rule was being observed only 38 percent of the time. The company also found "some violations" of its compliance code for environmental standards while examining 14 facilities, resulting in 58 facilities getting their air emissions systems treated.

Two weeks before the Chengdu explosion, an advocacy group warned of unsafe conditions (PDF) at the factory in a report. The group, Students and Scholars Against Corporate Misbehavior, called the health and safety issues at Chengdu "alarming:"

"Workers do not have adequate training on usage of chemicals and do not have regular on-post health examination. Workers also highlight the problem of poor ventilation and inadequate personal protective equipment."

A copy of the report was sent to Cupertino, but the group never received a response, according to the Times.

Two hours into Lai's shift, a series of explosions rocked the building. Despite being burned over 90 percent of his body, Lai held on for two days. After delivering Lai's ashes to his family, Foxconn also wired a check for $150,000 to the family.

As unsettling as all this is, perhaps there's hope for overseas workers in Apple's announcement that it has joined the Fair Labor Association and that it will be providing more transparency when it comes to the making of its products.

In a recent report on why the success of some U.S. firms hasn't led to more U.S. jobs, The New York Times noted that almost all of the products Apple sold last year were manufactured overseas.

As a current unidentified Apple executive points out to the Times: "You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China."

[Samlv]

Crazy idea. Let's redirect half a billion tax dollars to build a factory for Apple in the USA. At no cost to Apple.

That is very similar to what China does for their solar industry. And then they dump product while manipulating their currency. And they have done that with multiple industries.

Gloves off. Import the jobs. Especially if the Chinese are going to blame our firms for their suicidal tendencies.

Even in the USA we don't blame corporations for people being insane.

[venusvegasvada]

Crazy idea? You want the taxpayers to pay for factories to be built in the US so US Corporations can "afford" to trade their slave labor for US wages? Since when is it the responsibility of the US taxpayer?

Maybe we should export our Elite to China and let them work in one of those factories for a few years and see if that has any effect on their attitudes.

These are people with twisted views of reality. They feel no responsibility for this situation, they are that disconnected from it. It IS THEIR RESPONSIBILITY. They ARE the ones destroying peoples lives for profit.

Life. Liberty and the Pursuit of Happiness for Everyone.

[venusvegasvada]

I had posted this before also, but it's worth posting again. I know it's long but I think it's worth saying:

In 1855 you could rent a slave in the US for one month for around 29 dollars. At that time, that was about the cost of an ounce of gold.

Today, gold trades for around 1,400 an ounce.

It costs around 200 dollars a month for a Chinese worker.

So it's roughly 7 to 20 times cheaper to hire a Chinese "worker" today than it was to hire a slave. US Corporations have NEVER had it so good. These are people too over there. Real human beings with hopes and dreams and goals too, just like every one of us. The 200 per month they get is it. It gets them nothing else. No retirement, no medical, no housing, no food. It all comes out of their pay. It's modern day slavery.

The US was founded on the principles laid out in the Declaration of Independence and the Constitution. Perhaps the biggest cornerstone of those documents is the premise and promise of "Life, Liberty and the pursuit of Happiness.

True, it took us many years to rid ourselves of slavery as it existed at that time in the US and abroad. Even today we actively fight against human trafficking.

Look at what our country accomplished after slavery. Industrialization. Fair working conditions and real living wages. We rose to greatness because they just weren't words but we lived by them. We created a middle class of hard working people that built great things. Capitalism worked because of the balance created between all classes.

Over the last 20 years our system has been subverted by the greed of Corporations in taking advantage of people that are paid so low a wage they are literally modern day slaves. Their abuse ignores and circumvents our labor laws, our workers rights and our Nation's industrial, financial needs and our moral standards. The balance our Capitalism needs to work at home for all is upset. The Rich are throwing everything and everyone under the bus so they can maximize profit and shareholder value. "Life, Liberty and the Pursuit of Happiness" is not in their vocabulary for anyone but themselves.

The Rich hide behind laws that allow them to perform these acts without inspection or moral infringement. How callous and blind can we be as a people? Do they think the world does not see our corporate hypocrisy? How can we get up and tell the world we are for freedom when we enslave hundreds of thousands of low income workers in 3rd world countries all over the globe?
They enforce a mindset that what happens in foreign countries is not our concern. Really? How can we be waist deep in everything that goes on all over the glove in ever single other area of human endeavor and NOT this? How many wars have we fought over human liberties? How many laws do we have today that allow us to grab any foreigner and incarcerate them if we deem they are a threat to our way of life? We waged the largest civil war in human history to abolish slavery in the US. What a pale shadow of our former selves we have become today.

How long are we going to ignore the promise and proclamation of our countries founding documents as being applicable to all people, everywhere? We should not be allowing our Nations true reason for existence to be subverted just so some Rich people can make abhorrent profits and keep people in overseas bondage. The US Govt. needs to take the promise of Life, liberty and the pursuit of Happiness as it's guiding principles and make them legally enforceable for ALL our actions at home AND abroad. People shake their heads and wonder how we could allow so many of our jobs to go overseas in the first place. That's why. The Rich paid off the Govt. to take the low road. Screw the Rich. We are better than this. Enforce the dream for everyone.

[venusvegasvada]

I had posted this before but it's worth posting again:

Modern Slavery

Average Chinese factory worker pay (2011 US Bureau of Labor Statistics):

2004 per hour 0.64 cents USD
2008 per hour 1.36 USD

Given our Govt's propensity for tweaking numbers based on politics you can take these figures for what they are worth.

Referencing "The Economics of American Negro Slavery" by Author Robert Evans Jr., page 197:

The US Slave trade had as one of it's more deplorable business models the "rental" of a slave from one slave owner to another. According to historical data, a US slave in 1855 could be rented for 29.50 per month (average). An ounce of gold in 1855 was 21.00 per ounce. So 29.50 then would have bought 1.40 ounces of gold.

1.4 ounces of gold at today's market price would be (at 1680.00 per ounce) 2352.00 USD.

So 1.00 USD in 1855 would be worth 80.00 today.

In one year there are 52 weeks. If a worker worked 40 hours per week,, that would be equal to 2080 hours per year or 160 hours per month.

Comparing China to US Rental slaves in 1855:
Yearly Cost:
2004 China (cost at .64 per hour x 160 hours): 102.00 USD
2008 China (cost at 1.36 per hour x 160 hours): 217.00 USD
1855 American slave (using price of gold as common denominator)
Cost per month: (1855 dollars: 29.50 x 80)= 2,360.00 USD (2011)

So it can cost as much as 20x more to rent a slave in the US in 1855 than to pay a Chinese laborer to work in a factory today per month. Other rates listed in "The Economics of American Negro Slavery" yield a lower rate, from 7 to 10x more to rent a slave, but you get the idea.

A case can be made that American Corporations have NEVER had access to so much cheap labor in our entire history. You just don't have to care about our fellow man in order to take advantage of it.

It's rotting away the progress we have made as a society here at home. Hundreds of years of laws and wages fought for by Unions are being torn down as no longer competitive against this low a labor cost. We are literally throwing everything that makes us who we are under the bus just so a few Rich people can make more profit.

It's horrendously shameful that we as a people in the US would sell our souls out to the Rich so they can abuse ourselves and others while we stick our heads in the sand and simply let it happen without so much as a fight.

[TellitTrue]

You were mistaken. It WASN'T worth posting again. It ain't about "rich people." It's about buying cheap stuff at Walmart. Rich people couldn't make a nickel from Chinese labor if Americans didn't value buying the cheap stuff. Comparisons to American labor costs, or to slavery, are irrelevant to the topic. $200 a month in China may not be good, but it's a lot better than ZERO per month.

[venusvegasvada]

It was worth posting again. The problem is people in the US have no moral fiber anymore. Most don't stand up for anything. Americans aren't "buying" anything. We are "borrowing" everything.

It's people like you that cause this problem. Stick your head in the sand and don't take any responsibility for it. How we treat others DOES matter. Your wrong and it's because of people like you things are the way they are today.

[ricktrick]

Welcome to the new world order where patriotism is just another buzz word to ignore. iPads are just the tip of the iceberg.

Those $200 pair of sneakers your kids must have, same, sweat shop in Viet Nam, cost $5 to make with semi-slave labor.

Yah! Go "free market"! Bull!!! When the hell will the "America First" part actually PUT AMERICA FIRST?!?

[InnerView]

It seems to me that this human cost is more reflective of China and its building codes, building construction practices, building operations short cuts to cut costs that create dangerous working conditions.

Its THEM who've created these conditions, FOXCONN and all the other cheapy-cheapy companies that have created abhorrent working conditions. Its not like Apple "built" an actual Apple factory or set of factories and they are mistreating employees.

China has a changing culture and part of it is, a dehumanizing form of providing housing, or dorms and even CAGES, for their workers to sleep.

But people start accusing a corporation that its at fault. Well, they are not. Its obvious that Apple realized that something inhumane was occurring, that Chinese workers were being pushed to suicide, etc.

But its FOXCONN and apparently their mismanagement, greed and an inhuman form of viewing their own workers and people.

[venusvegasvada]

Recognizing that fact doesn't allow us off the hook. The products are sold in the US at US rates. They should be made under the exact same conditions, to the same labor and safety and cost standards if they are sold here. THAT protects ourselves and OUR laws and human legacy and says we truly care about everyone on the planet having a shot at life, liberty and the pursuit of happiness. Not just the Rich people that bought the Govt. to make it happen for themselves.

[stevador39]

Bill Gates and Steve Jobs along with a lot of other entreperneurs are okay with slave labor. They have no loyality to the U.S. and its citizens. They took jobs abroad so they could make more money.

[Scimajor]

Why is China's economy booming compared to the U.S.A.? Their economy is booming simply because businesses are not encumbered by such extraneous things such as worker safety, health care, decent wages, environmental protection acts, etc. We have three choices:

1. Status quo
2. Impose import tariffs on countries with non-existent human right records like China.
3. Move the clock backwards here in the U.S.A. a hundred years or more when workers in the U.S.A. were given similar treatment to the workers of modern day China.

[venusvegasvada]

I pick No. 2

We could have used our Nation's stated reason to exist in the first place and apply it to everyone. Not just at times of War or when it fits into some policy, but all the time for everything we do.

"Live, Liberty and the Pursuit of Happiness".

Since when was that idea reserved solely for Americans on our continent?

That's the disconnect. If our Govt. had taken that guiding principle to heart we could have raised others up to our level. You want access to our markets? Then yes, we would apply an import tax to make it equivalently expensive to do business overseas. It would not have been just a financial balancing act, but it would have protected the rights of people overseas and at home. All products sold in the US must be made to our standards under our manufacturing standards and pay standards. No free ride. Scoff if you will but the Rich CAN afford it. The problem is we can't as a people or a Nation. We are going broke morally and financially because we have let the Rich control far too many things.

[TellitTrue]

Wow, venusvegas, did your boyfriend run off with a rich guy or something? Sure, pick #2. Then, when other countries retaliate, we can no longer sell American goods anywhere. But - hey! - Americans will have those manufacturing jobs right up until they close down the factory.

[roadrunner1742]

I just wonder exactly how reinventing the iphone each year to make it better requires 60+ hour workweeks, physical punishment, and murderously unsafe working conditions. I'm surprised the reporter didn't think to ask.

[barbaram99]

I see as slave labour ...True they are in China ...It is slaverly as they are making the things we use..Most of it is so poorly made..Nixon started that ball rolling in 72..I was a sp ed high school student then. We use to make the things we use..Use the China Citizens as slaves even tho we don't chain them..They are our slaves like it or not.America had white slaves in its history. Oh yes.Ye only think of the black people..
I am still using my old michines..I have one Notebook that the keyboard is so poor--it is pitiful.It was built in 09. I mostly use my old Notebook at home that was built in 07 and had it upgraded Vista OS,RAM and hard drive.I have my 08 tower that I am running thru a big TV that has PC port for it. I am legally blind in one eye and totally blind in the other.
It is greed..There are good machine out there but ye want the latest tech..MS is the blame as well..XP was the best OS MS ever came out with..But as a blind person Sam was so poorly that I could not understand some of the words Sam said.I had to move to Vista as it got things I use..MS Anna ..I hate win 7.
We use to make items that lasted..USA made white canes are junk and I have used such since full of 74.
We talk all this green stuff..welll dear we aint doing our best.As a nation we really don't care..go to war..I would rather have the 70s back..I am 57.

[CaptainSmollett]

What would be the "cost" to these workers for not being employed making parts for Apple? Starvation? Typical left-wing rhetoric.

[AmazingGrce]

You are right - now they die from burns, poisoining or cancers caused by those wonderful working conditions. BUT they die with a job and a 'full' stomach. Much better and YOU get your wonderful iphone, ipad, and Mac's new and better and faster every year - Hey I guess that's a tradeoff you willing to make.

Wondeful how you lefties blame anything bad on us. Isn't your man Obama the first president who had to give up his blackberry when he was sworn in as prez. Maybe if it was an Apple product he could have kept it.

What this story does is expose the falsehoods in Apples left-leaning attitudes. Those 'ideals' espoused by the lefties in Cupertino are nothing more than eye-wash to keep favor with their apple worshipping customers.