Barlett & Steele: Apple represents the worst of American business, not the best

“Next Wednesday, Apple is slated to unveil the iPhone 5 — the latest in a series of magical devices that have captured the world’s imagination. Given its incredible success with consumers and phenomenal stock price gains, Apple has come to symbolize the best of American ingenuity, technology and innovation,” Aaron Task reports for Yahoo Finance. “But Apple actually represents the worst of American business, according to award-winning journalists Donald Barlett and James Steele.”

“In their latest book, The Betrayal of the American Dream, Barlett and Steele cite Apple as a prime example of an American outsourcer,” Task reports. “Apple products are still conceived and designed in the U.S. but the company ‘very quickly’ made the decision to manufacture its goods in other countries, Steele observes. ‘That manufacturing base, the heart of so much American middle class is very quickly yanked out.'”

“In the 1990s, Apple products were produced at plants in Elk Grove, Calif. and Fountain, Colo. In the Colorado Springs area, Bartlett and Steele estimate more than 15,000 jobs, paying between $55,000 and $80,000, were lost when Apple sold the Fountain plant in 1996, costing the local economy $500 million,” Task reports. “Similar devastation occurred around Sacramento when Apple closed its Elk Grove plant in 2004… To be sure, Apple is not the first or last U.S. company to move its manufacturing overseas and Barlett and Steele write extensively about Boeing (BA), which is increasingly moving its operations to China. But Apple is the ‘most visible’ with the “most visible products,” Barlett notes, and the company symbolizes how outsourcing has moved far beyond the ‘Rust Belt.'”

Full article here.

MacDailyNews Take: This meme, blaming Apple for the U.S.’s lack of assembly jobs that, in reality, simply cannot exist today (CE assembly line jobs were and are simply not worth anything close to $55,000 and $80,000 per year), seems to be all the rage again lately. Whether it’s to sell books, an attempt to somehow damage iPhone 5 sales, or for some other reason, it smacks of a intentional PR effort. It’s FUD, plain and simple.

Apple is a symptom (and a minor one at that), not the disease.

Obama interrupted with an inquiry of his own: What would it take to make iPhones in the United States? Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said.Charles Duhigg and Keith Bradsher, The New York Times, January 21, 2012

And, by the way, many make their living from Apple who do not work for Apple, ourselves included. Mac developers and iOS developers, for two examples. iOS device accessory makers, for another. Extrapolate. The impact Apple Inc. has is enormous and the amount of employees on Apple’s payroll, regardless of country, pales in comparison to the number of jobs and economic activity the company actually generates around the world.

As per China (and Brazil, etc.) CE product assembly:

It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers — including G.M. and others — that have shrunk as nimble competitors have emerged.Charles Duhigg and Keith Bradsher, The New York Times, January 21, 2012

A study by Analysis Group found that Apple has directly or indirectly created 304,000 U.S. jobs. These jobs — spread across all 50 states — include thousands of jobs in numerous industries, from the people who create components for our products to the people who build the planes and trucks that carry them to our customers. For example, this figure also includes workers in Texas who manufacture processors for iOS products, Corning employees in Kentucky and New York who create the majority of the glass for iPhone, and FedEx and UPS employees. Together with the 210,000 iOS jobs generated by the app economy, these 304,000 jobs make a total of 514,000 U.S. jobs created or supported by Apple.

More info: 514,000 U.S. jobs created thanks to Apple Inc.

Related articles:
Why Obama chose to use Steve Jobs over Google founders in DNC speech – September 7, 2012
Economists weigh in on Apple’s U.S. job creation claims – March 5, 2012
514,000 U.S. jobs created thanks to Apple Inc. – March 2, 2012
Launched by Apple, ‘App Economy’ has created 466,000 jobs in the U.S. alone since 2008 – February 7, 2012
Apple and the American economy – January 24, 2012
Apple, Steve Jobs, Obama, America and a squeezed middle class – January 21, 2012
Apple’s real market value: How many U.S. jobs it creates – November 21, 2011
iOS developer salaries skyrocket – November 9, 2011
How many U.S. jobs has Apple’s iPod created? – July 8, 2011


    1. So the solution is to break the unions so the workers can get fantastic pay raises. Then ditch all the government regulations so that all the safe working conditions mandated by those regulations will go the way of the unions. All the new workers can begin working at age 10 at $2.00 per hour with no security, no health insurance (in case their hand gets smashed by a machine that broke because it wasn’t maintained because of the cost of maintenance technicians).

      Oh, I know everyone can spout hundreds of ill-suited government regulations but please don’t lump the bad with the good.


        1. The REASON kids age 10 stopped working in factories was not because the ultra-rich owners suddenly got hearts and cried, “Gee-whillikers; this isn’t very nice; let’s not use children as near slave labor any more.” Unfortunately, regulations were needed – and they’re still needed.

          1. Worker age regulations need to be maintained. Were they to be rescinded, it is clear as day that the very next day, employers would start placing recruitment ads for ten-year-olds, on cereal boxes and during cartoon TV shows. What? You doubt that? Listen, some of those captains of industry would put their own kids to work. “Johnnie and Lisa, thanks to the great U.S. Congress, you now get to work in Daddy’s plant. You start tomorrow, so get right to bed. Oh, and don’t worry about your trust fund, it is still there, but from now on you will get it the old-fashioned way…you will EARN it.” (Smiles to self)

        2. @ apple fans:
          Let’s transfer all jobs to China and India, and we become beggars.
          Try to accept the truth.
          It does NOT mean that if you like iphone or ipad, you close your eyes, and let apple do whatever it wants to do.
          If you really love your country then you should boycott apple products, and send a strong message to apple that it should bring back jobs back to the USA.
          Apple fans, do you know how much money we are borrowing from china every day??????

          1. the US is no longer capable of competing with Asia in manufacturing. In order for Apple to sell its products at the price that most world consumers are willing to pay requires that they manufacture in locations that allow them produce at rates Apple can afford. Could they lower their profit margin- sure. But I don’t think they could lower them enough to justify manufacturing in the US. It’s not possible. The fact is, the USis just too darn expensive to manufacture in.

          2. @Ted and all deniers of the obvious.
            Take a seat Ted, look around you. It doesn’t matter where you are, the home, work, on the highway or out shopping. Almost everything you see, can buy, wear, drive, work on and with or consider part of your life…is made in China.
            To single out one company- Apple, over the tens of thousands of companies who also use Chinese labour and factories, is throwing out the baby with the bath water….and dumb denial in the extreme, whilst also being an example ‘of closing your eyes and letting everyone else do what they want’.
            So, wake up and get a clue.

      1. Let’s start with making government unions illegal, that’ll start getting back to fiscal responsibility.

        “A New York Supreme Court judge held:

        To tolerate or recognize any combination of civil service employees of the government as a labor organization or union is not only incompatible with the spirit of democracy, but inconsistent with every principle upon which our government is founded. Nothing is more dangerous to public welfare than to admit that hired servants of the State can dictate to the government the hours, the wages and conditions under which they will carry on essential services vital to the welfare, safety, and security of the citizen. To admit as true that government employees have power to halt or check the functions of government unless their demands are satisfied, is to transfer to them all legislative, executive and judicial power. Nothing would be more ridiculous.”

        1. Well, you must be sure then that Georgia, North Carolina, South Carolina, Texas, and Virginia have no fiscal problems since they are all ‘red’ states where collective bargaining by public employees is explicitly illegal. Oh, you were putting up yet another red-herring; I prefer my herring pickled or curried…

          I’ll bet the following quote is near the top of your canon. In 1671, Sir William Berkely, Governor of Virginia, said, “I thank God there are no free schools nor printing presses and I hope we shall not have them these hundred years for learning has brought disobedience and heresy and sects into the world and printing has divulged them and libels against the best government. God keep us from both.”

        2. How about we deal with the things that are really sinking the economy:

          2 endless wars & out of control “defense” spending. Then lets tax the crap out of offshore holdings and accounts and remove loopholes for corporate tax dodgers. The US already HAS the LOWEST EFFECTIVE corporate tax rates in the western world. Where are the jobs these “Creators” are suppose to provide, I thought taxes were holding them back?

          Instead of attacking other Americans (government workers) and arguing to take their collective bargaining and retirement away, how about we attack REAL problems.You want to cut some benefits and pay, how about Lawmakers first? start with their pensions and extravagant healthcare plan.

      1. It could never happen here because the bleeding heart liberals and attorneys would have a field day. Not that I’m promoting the idea but if you think big government or government controll works, just look at China and tell me that’s working for their people.
        SJ was right only because “we” are the problem, not the businesses.

      1. I do know what I’m talking about. I spend a lot of time with education and business systems in Asia. Irregardless of your political and union leanings, you must realize that the industry is in competition with places where assembly line workers are willing to work for less. If Americans do not want to work for low wages, that is understandable, but we should also understand that as the rest of the world develops the education and infrastructure to do more of the process, there will be more jobs outsourced. It has nothing to do with corporate greed. It has to do with survival. The court proceedings between tech companies alone show the highly competitive nature of the business. If Apple is going to build manufacturing plants in the US, is Samsung going to do the same thing? The government could tax foreign manufactured goods, but that would limit your choices and raise the price of everything – a very unpopular notion for most people. The world has many $250 per month manufacturing jobs. Does anyone you know want one of those?

            1. Inflammable is a fair talking point, but the “in” comes from “inflame” not “un-flame” or “de-flame” or whatever. I.e., “to ingulf in flames.”

              “Irregardless” is just dumb. Lose it.
              Then we can all get back to Apple, best or worst, or whatever.

        1. I know where you can find dedicated workers who will pay their “employer” hundreds of dollars per hour to work. Just step inside of any casino. You will see hundreds of very dedicated people paying to turn the wheels. If I can figure out how to use the slot machines to assemble iPods I will be rich.

        2. @ bigbubbadude wrote: If Apple is going to build manufacturing plants in the US, is Samsung going to do the same thing?

          Samsung is already building a plant in Austin.

    2. Unions – like everything else – need a certain amount of regulation and oversight. Left unchecked, they can be just as bad as the corporations and industries they are supposed to protect us from. But Government has failed to keep an eye on any of it – and the money from corporations, unions, and the rest has polluted the system – on all sides. A free market economy is just as much a pipe dream as utopian socialism / communism – none of it works without government to set rules and keep an eye on things. Things worked ok for a long time but more and more money was pouring in… and now the power of the media and the internet has lifted the veil of BS and we can all see just how corrupt the government, unions, corporations really are, and how all they care about is money. None of them care about the people, the workers, the common folks – they care about their fat cat friends. Every political faction is just as guilty as the next.

      1. Exactly right!

        Fomenting the partisan division and sniping is all part of the big ruse.

        In our “great democracy / republic” voter turnout has steadily declines over the decades. In recent presidential election years the turnout rate has been scarce over 50% (according to the government numbers) – in the intervening years, dropping to just about 1/3 of eligible voters.

        Seems to me we’re at the “bread & circuses” point of the cycle…

      2. @steve516:

        Agree unions, particulary public sector unions, need to CHANGE.

        Top of the list: More accountable to the taxpayers via voter referendums, salary and benefit negotiations, et al.

        Year after year citizens pay salaries, lifelong medical and retirement benefits. The same citizens have little to no say in salary negotiations or performance reviews. Union HR is a prop and mostly non-effective and unaccountable to the taxpayer.

        The party in power is in charge of contract negotiations. The salary paying taxpayer is powerless, sits on the sideline while union contracts are ratified, locked in really, four years or more.

        This election cycle public sector unions will spend millions of taxpayer funded dollars to elect like minded candidates. I’m sure they don’t expect anything in return. 😉

        Agaign, taxpayers left on the sidelines read the headlines and expect the tax bill increase in the mail.

        We should do better for the union worker and for those footing the bill.

        May the Wisconsin shot heard around the world accelerate …

        1. What a dubious grasp on reality you have. These are your fellow citizens, and quite frankly you are wrong.

          This regretful notion that just because they work for the government, they are subject to your judgement in regards to their pay and benefits is absurd. They should be paid what the market demands, not what some Coal Cracker decides they should make. I shop many placers “with my money” and I am not entitled to lord over the employees and alter their benefit plans.

          You plan to reduce government spending, by breaking the backs of fellow Americans is foolhardy at best. This is not the reason America is broke. America is broke because too many pay too little in taxes, STARTING WITH the corporations.

          There is NOTHING and i MEAN NOTHING unreasonable about collective bargaining. There is nothing wrong with Americans (or any humans for that matter) fighting for/wishing for Better work environments, living wages, good benefits. We should ALL be clamoring for such things, and we should all damn well be willing to pay for them. Selfishness and greed are the only valid reasons I can see to argue against these things. Your arguement isn’t rational and it is formed from your

    3. Yes of course if people here were willing to work for similar low wages as over there the jobs would come back. Thats what the politicians who sponsored all the trade agreements were well aware of. Those trade agreements were responsible for the shift of wealth from the middle to the top.

      1. union jobs pay less… Less than 15% of the workforce is union, most of that is government. Unions breed laziness, if everyone gets paid the same no matter what.. Why should I work harder?

        Unions are not needed anymore, there are state & federal worker laws that protect workers from the abuse that spawned unions. They had their place a one point, not anymore.

        When they PROTECT a serial sex offender…. And attack a company for wanting to fire that guy… They have lost their reason to exist.
        I’ve explained it before, I had to work with a guy that was in an elevator with a 22 year old girl, he hit the emergency stop and proceeded to assault her… The union was able to convince the girl to not press charges (money being key)
        Oh, and anyone overheard talking about the incident, or anything other that total praise of the guy… Was not allowed.

        Oh, this was his third time being caught. Helps when you are a union steward I guess. He was banned from the building though.. Like that really mattered.

        Are there bad employers? Yes.. Not saying there isn’t. And yes it as easy as “don’t work for them” you are making excuses for both you and them by working for them.

        There was an article a year or so ago going in to detail about how much more the iPhone would cost if made in the US… And the majority of that extra cost was 2 things specifically mentioned. Unions, and regulations by government.

    4. This has NOTHING to do with unions. Case in point, Apple stores. You may diverge and have opinions about that how Apple stores are staffed but they represent a relatively new market that Apple entered into and succeeded. Thus, Apple could invest more U.S. jobs if they wanted. However, they don’t want to.

      Second point, they are building their new campus in California. California has very tough controls but there they go.

      Unions help strengthen the workers yet in some cases, they have been a burden. Unions and regulations are a cheap excuse for some companies not wanting to build is America.

      Don’t believe me? Ask BMW, Toyota, Honda who have built not only factories in America but state-of-the-art, environmentally friendly factories.

      And there you have it.

    5. @ apple fans: Let’s transfer all jobs to China and India, and we become beggars.
      Try to accept the truth.
      It does NOT mean that if you like iphone or ipad, you close your eyes, and let apple do whatever it wants to do.
      If you really love your country then you should boycott apple products, and send a strong message to apple that it should bring back jobs back to the USA.
      Apple fans, do you know how much money we are borrowing from china every day??????

    6. I live in Valley Center, Ca. Where, for over eight years now, friends of mine have been fighting regulations to put in a market and other stores.

      Right next to a middle school, on Indian land, they decided to build a gas station and a McDonalds. Within two months the buildings are rising, because the regulations don’t affect Indian Nation property. It’s all down to oppressive gummint regs.

      1. In 2011, 7.2 million workers in the private sector were in unions. There were approximately 85 millions workers then. What an incredible amount of power you ascribe to less than 9% of the workforce! I want to be one of them, too! But I live in one of the 5 states where public sector unions are illegal — and our economy went in the toilet, too.

          1. Well, let’s see. There are about 14 million state and local public employees. But 8 million of those are in education with about 6 million being K-12 teachers. So that leaves 6 million non-education employees. If even 50% are in unions, that added to the private sector gives only 10 million total — not enough people to fill New York City and L.A. It’s just amazing how so few people control the entire business community by just being able to bargain collectively. Gee willikers, if only the president had that much power, maybe he could get the Tea Party to do something other than rant!

    7. Hardly.

      Dude, try employing a reading comprehension level above the 8th grade. There’s far broader and deeper issues raised in the article and comments above than some tired conservative meme aimed at those that topped out at a high-school education (and phoned it in mostly during those years, too…)

      Just sayin’

  1. So Apple sends its manufacturing overseas like every other big American company, which makes Apple the worst American business even though it far outpaces every other big American business in the best possible way according to virtually any other yardstick ? That makes perfect sense. Why didn’t I think of that?

  2. All Apple products would probably be $150. to $200 dollars more to pay the crazy regulations, unfounded lawsuits and just kickback to the Democrats running the Assembly and senate and the y would be forced to be unionized

  3. Truly a dill weed. To have folks spend more on one product unnecessarily just means less money to spend on products wherein when the US is the best to produce or provide it will be made here.

    Rather buy from Vietnam and numerous other counties than give than money in form of aid. Don’t we want them to share in the freedoms economic success provides.

  4. If unemployed Americans were offered $2000 a month and free lodging and meals, which is more than Chinese workers get, to assemble Apple’s mobile hardware, 10 hrs a day, they would all prefer social assistance instead.

    Why should Apple be forced to be handicapped so badly in the electronics space. All of their competitors use cheap Asian labor.

    1. Your claim is without merit unless you can supply a specific example of this. But, of course, you’re just going by your Foxnews worldview that everyone on government assistance is a lazy bum and we should end programs for the poor so we can give more tax breaks to the billionaires.

  5. Apple couldn’t build factories in California and other places now for years even if it wanted to because of our environmental regulations and the NIMBYs. It’s so difficult to get anything approved in so many areas of the U.S.

    Then you have the employee issue. While there may not be as many assembly line trained workers currently for products like iPhones, there is no reason they can’t be trained. U.S. auto workers are among the best in the world.

    However, there’s no way in h*ll that Apple can get U.S. workers to work like Chinese workers do. That will never, ever, ever happen in the U.S., and that kills any possibility of iPhone and other consumer electronic manufacturing returning to the U.S. in any significant degree.

  6. So much B.S. It is about currency exchange rates, pure and simple. Exchange rates are not allowed to respond to supply and demand for currencies and it becomes impossible to compete with the labor costs of an asian country. The dollar is kept strong and it remains difficult to produce products inexpensive enough to sell in foreign markets while imported products remain unduly inexpensive.

    1. A super-weak dollar would make millions of people poor, destroying the value in their savings, investments, retirement dollars. Weakening the dollar, however, wouldn’t fix the labor difference between us and China because it’s almost slave labor there. It would help pay the deficit, over 200 trillion dollars, but at the cost of the ruin of most Americans. Better to keep a strong dollar.

  7. No plant in the US can compete for CE jobs, and most of it is regulation. Can’t do this, must pay for that permit, it just can’t be done. Do they quote Jobs telling Obama “I can’t even build a pickin’ factory in the US!” because it would take forever to get done, and cost far too much. Why? Government standing at every point of progress in the way… It isn’t just Obama’s admin, it’s decades of Bureaucracy run a mock, our high wages and our artificial minimum wage that artificially pushes up the entire salary chain… That and material distribution is all based in Asia no, not the US, again making it cost prohibitive to product product in the US… America for a host of reasons has fallen behind in a hurry to countries that can simply flex and move way, way, faster than we can ever hope to achieve now-a-days…

  8. I agree with most everything in the MDN take. But a missing point in all of this discussion is why Brazil is now manufacturing iPads.

    The reason? Tarriffs. Anti-free trade, anti-competitive, 19th century economics tarriffs.

    I’m personally for free trade. But it’s not actually free if 1 country is able to use punitive import tarriffs to get manufacturing on their home turf, and I reluctantly admire the Brazilians for doing it. Food for thought.

  9. There are many reasons outside price alone that makes Apple or other companys seek manufacturing outside United States. We can’t blame Apple for this we only have ourselves to blame.

  10. This stuff is just getting so tiring. It’s quite obvious that people who write this kind of drivel have never traveled around the world and looked at the global economy from outside of the internal US perspective.

    The thing is that middle class Americans don’t want menial and repetitive task factory jobs. We don’t want to sew dresses at a garment shop, assemble toys in a toy factory, make furniture or guitars in a dust-and-fume-filled shops, and we don’t want these kinds of places in our neighborhoods.

    We used to do this stuff as the backbone of the American economy in the first-half of the 20th century but, eventually, we evolved into a services-oriented economy because that’s what the people ultimately wanted. The baby boomers didn’t have kids so they can educate them to work at manufacturing factories.

    Over the past several decades, Americans preferred to be doctors, lawyers, stock-brokers, real estate agents, designers, architects, software programmers, engineers, retail entrepreneurs, accountants, and all kinds of other services-oriented jobs that require advanced analytical thinking skills. I’m certainly not raising my kids to go work at an assembly plant. Who does and who has over the past 3 decades or so?

    The whole “outsourcing” thing started long before that term became synonymous with Wall Street greed over the past decade. I’d say that it was in the 60’s that it got started and became entwined with how many American manufacturers started doing business in the 70’s. By the mid-80’s, America’s manufacturing competitiveness for low-cost goods (especially in electronics) had already lost its edge to Japan.

    By the early-90’s, the huge and amazingly efficient infrastructure for low-cost electronics assembly in Asia was firmly established and it made no financial sense whatsoever to produce most electronics goods in the US. It’s not just the labor costs but the infrastructure itself reduced the overall costs dramatically.

    Far East Asia seems virtually tailor-made for mass scale production of things like TV’s, radios, computers, phones, game consoles, printers, routers, and various other electronic gadgets and peripherals. There is a huge labor pool in densely populated mega cities within a fairly limited geographical space.

    This labor pool is generally young (18~30), relatively well-educated, strong in math, diligent, fast-moving, and absolutely willing to put in 60~70 hours per week. There are literally hundreds of millions of people like this over there. It would have been incredibly stupid for Apple to not take advantage of this kind of infrastructure that was already in place when Jobs returned.

    Apple was actually rather late in moving production over there. It’s a very fortunate thing that Jobs hired Cook to oversee this transition. It is well known that Jobs had very little interest in the production and operations side of the business and, without Cook, Apple may very well have gone under.

    These writers can’t seem to look further back than 10~20 years when “outsourcing” in America started long, long before then. Apple was late to the party but soon figured out how to manage the supply chain better than any company in any industry out there. There’s a lot of ingenuity there.

    As a supply chain professional myself who’s been going to the Far East since the early-90’s and still visit there every 2~3 months, I am in absolute awe of how Apple manages its supply chain. It often gets overlooked or just gets negative coverage due to the Foxconn labor issue news and stuff like that, but Apple’s operations management is absolutely amazing and the “secret” weapon that cuts down the competition over and over again.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.