iPod’s Sin City Isn’t Unique

Chinese Factory SceneThere’s been a lot of hay made over the last week by a report in the UK’s Mail on Sunday newspaper that some factories producing iPods exploit their workers. These are strong allegations and Apple has responded by promising to investigate them thoroughly.

The Mail on Sunday alleges that 200,000 workers at a 5-storey “iPod City” in Longhua, China, endure 15-hour days and earn only $30 a month. Most of the employees are women, who are considered more “trustworthy”.

What I find odd however is the sense of shock and dismay being demonstrated by the world press in reporting this seeming revelation: “What? Cute little iPods are produced by low-paid foreign workers? We’d better tell everybody about this!

It’s true, folks; and pop is really just flavoured sugar water. (Gasp! Never!)

Where did we all imagine our iPods came from at so low a price? For that matter, shouldn’t we wonder why technology from Dell, HP and Sony is also so cheap?

We probably should wonder, but we don’t seem to. We just demand ever-lower prices for our gizmos and gadgets. This forces companies to produce them at a lower cost, which in turn forces manufacturers to take advantage of large, impoverished populations desperate for any type of work that might keep them alive.

Then when we learn that our iPods were made by overworked and underpaid foreigners we all throw up our hands in moral indignation and yell at Apple, “Oh my goodness, what have you done to those poor people?

It’s no secret that to drive down technology prices over the last 5-10 years, electronics firms have had to cut costs everywhere. One key element of cost saving is, of course, labour. And China can provide a heck of a lot of low-cost, capable bodies in a pretty lax labour code environment.

In a wrinkle of political irony, it’s technology manufacturing companies based in Taiwan that are making the most of the cheaper labour force in China.

Apple didn’t hire almost a quarter of a million poor, migrant Chinese workers to build iPods. They contracted a company called Foxconn to handle manufacturing, and this Taiwanese mega-corporation in turn built the iPod City to tackle the task at hand.

To be fair, Apple is not the only company that’s taking advantage of China’s massive cheap labour force via a proxy. All major technology companies, including IBM, Sony, Dell, and HP, utilize the services of one or more manufacturing firms that are typically based in Taiwan but by and large deliver their services using a Chinese workforce.

Apple’s just taking the heat because they are responsible for the world’s most lustworthy piece of technology.

Even Nicholas Negroponte’s acclaimed One Laptop Per Child project will use a Chinese workforce provided by Taiwanese technology manufacturing giant Quantas, to deliver the cheapest piece of technological commodity ever.

According to a recent industry report, Quanta is “shifting more of its manufacturing workforce to China in a move to strengthen competitiveness by reducing labor costs.” It would be interesting to see the type of labour facility Quantas has to construct to handle the unprecedented rapid manufacturing of millions of laptop computers.

But North American companies aren’t unaware of the social issues surrounding the use of foreign workers in the manufacture of their products.

In 2004, HP, Dell and IBM got together to develop the Electronic Industry Code of Conduct to “establish and promote unified industry expectations for socially responsible practices across the electronics industry’s global supply chain”. It has since been endorsed and adopted by other companies including Apple, Cisco, IBM, and Microsoft.

The EICC is designed to form a part of the binding agreement between a technology firm and its manufacturing partner.

Conformance with the Code, however, is voluntary and only informally monitored.

In addition to adopting the EICC, many firms publish on their web site a set of standards they require manufacturers to adhere to in order to receive contracts and payments. If you google “Apple Supplier Code of Conduct”, you’ll find Apple’s. It’s quite comprehensive and would clearly govern a situation like that at the alleged “iPod City” in Longhua.

At the end of the day, however, we know that any company is in business for one thing. Their success or failure is not measured in their ability to adhere to any set of moral or ethical standards, but in the profit they deliver to shareholders.

That said, profits can be impacted by a company’s failure to uphold the mores of its customers, as Nike so rudely learned not long ago. If we continue to simply buy iPods, laptops and cell phones blindly, knowing that there are fellow global citizens at the other end of supply chain being exploited, then we are as guilty as any company of moral inconsistency.

However, if we choose to halt our blind consumerist tendencies and communicate to these companies our distaste for these inequitable product manufacturing practices, then we’ll probably start to have an impact.

Of course, human rights doesn’t come without a cost and we’d likely find that surcharge a tad smarting at checkout. Suck it up, knowing you did the right thing.

First published in the Yukon News on Friday, June 16, 2006.

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