Apple Consumers Play Role in Suppliers' Labor Practices

Apple Consumers Play Role in Suppliers' Labor Practices
Apple's announcement that it's asking for an outside audit of how workers are treated at Chinese factories that produce its products is a potentialy good first step towards possibly reforming labor practices. The truth is, though, the only way those factories will treat their workers properly is if you're willing to pay more for products from Apple and many other electronics makers.

Apple has long been criticized for the way workers are treated at factories in China that produce its products. Last month, the New York Times published an in-depth article documenting working conditions, and what it found was horrific. The article concluded:

"Problems are as varied as onerous work environments and serious -- sometimes deadly --safety problems.

"Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple's products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups that, within China, are often considered reliable, independent monitors."

The article uncovers even worse than that, including forcing workers to use poisonous chemicals, leading to serious injuries; explosions at factories that killed workers; and overall hazardous working conditions.

Apple Consumers Play Role in Suppliers' Labor Practices
Yesterday, Apple announced that it had asked the Fair Labor Association (FLA) to conduct audits of factories that assemble its devices in China, including Foxconn, which has frequently been cited for labor problems.

Not everyone is pleased with the FLA, with some critics charging that it is too cozy with the companies that fund it, such as Nike. I can't say that I know enough about the charges or about FLA to conclude whether it's the right group to perform the audits. But it's clear that some auditing is better than none.

The truth is, though, that the ultimate solution to the problem goes beyond auditing. It goes straight to your wallet. There's a reason that working conditions at factories that product electronics for Apple and other electronics makers are so harsh: Apple and other companies give those factories miniscule margins, forcing them to cut corners.

Here's one example: The Times article notes that a factory owned by Wintek had ordered its workers to use a toxic product to clean iPhone screens, because that product allowed workers to clean more screens per minute than if they used a non-toxic product. That allows the factory to cut down on labor costs.

After Apple found out about the practice, it had the factory stop using the toxic product. Then six months later, Apple significantly cut the amount of money it paid to Wintek, even thought Apple had asked Wintek to change a labor practice that allowed it to hold down margins. The Times quotes a former Apple executive with firsthand knowledge of labor practices at factories producing Apple products in China:

"You can set all the rules you want, but they're meaningless if you don't give suppliers enough profit to treat workers well. If you squeeze margins, you're forcing them to cut safety."

That's true not just of Apple, but many other electronics manufacturers as well. Apple is the most visible and profitable electronics maker, but it's far from alone in using these factories and in squeezing margins.

So it's this simple: You can't have it both ways. If you want people to be treated well at factories that produce electronics, you're going to have to pay more for those electronics. The price of products and the way people are treated who produce those products are inextricably linked.

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