Ralph Nader to Apple CEO Tim Cook: Pay other companies’ workers double and cut their hours in half

Ralph Nader, a five-time failed U.S. presidential candidate, has written an open letter to Apple CEO Tim Cook. Here it is, verbatim:

Dear Mr. Cook,

“Designed by Apple in California” has a nicer ring to it than “Assembled by workers paid about a dollar per hour, working 11­-hour shifts, and sleeping eight to a room in the Jabil Circuit corporate dormitories in Wuxi, China.” But, no matter how you spin it on the iPhone packaging, you continue to turn away from the horrid working conditions and miserly pay at your Chinese factories. Just last month, while you displayed ­­ through a two hour event on the ins­and­outs of tiny iPhone 6 and Apple Watch design breakthroughs how capable your company is of solving problems it cares to solve, China Labor Watch and Green America revealed in their newest report, “Two Years of Broken Promises” how you have failed to apply even a modicum of the problem­solving focus you bring for product design to the “serious health and safety, environmental, and human rights violations” at Chinese factories assembling the iPhone.

“That’s the price of affordable phones,” says the corporatist argument. This could be the case, if Apple was just barely profitable. But, as revealed in a recent letter responding to Carl Icahn’s call for more stock buybacks (you respond to billionaire’s pleas much more often than workers’ pleas), Apple is planning to have repurchased $130 billion of its own shares by the end of next year. In short, Apple is so profitable, that it does not know what to do with $130 billion except buy back stock from its shareholders to maybe boost its share price.

There are many alternate ways could have spent its surplus profits. For example, what if Apple decided to invest that excess $130 billion in dignified working conditions and living wages, instead of unproductively using their surplus to buy stocks back from the wealthy? Estimates differ, but according to Chinese labor watchdogs, factory workers in Apple’s supply chain make average salaries of, estimating at the high end, about $500 per month for about 80 hours of work per week. Doubling monthly salaries and cutting hours in half ­­ reforms that would make great strides towards having Chinese factories meet modern, dignified standards of a living wage from a 40­hour work week ­­ would cost ~$1500 per month (~$18,000 per year) for each factory worker. To have achieved these reforms for the 300,000 Foxconn workers who assembled the iPhone 5s would have cost Apple about $5.4 billion annually.

If instead of buying back stock, Apple had used its excess $130 billion to endow a foundation to achieve these reforms, it would have paid out at a conservative five percent interest $6.5 billion annually, enough to double wages and ensure a 40­-hour workweek for hundreds of thousands of iPhone workers, while leaving a $1.1 billion surplus as an annual budget for ensuring top­notch health, safety and environmental standards at Apple factories. The technology company that leads the way in profits and product design could, without changing anything but the amount of excess, unproductive money it uses to repurchase stock from wealthy shareholders, could also lead the way in dignified working conditions, hours and wages. Finally, some of Apple’s Chinese factory workers may become able to buy the iPhones they manufacture.

This goes to show that tolerating poverty wages is not the price we pay for affordable phones. Rather, poverty wages and harmful conditions are a consequence of tolerating outrageous stock buybacks. You had a choice for the $130 billion: living wages for workers or stock buybacks for millionaires? You chose buybacks. Here’s a challenge for the present and future use of surplus profits: why not let the customers decide? Just as they have consumer interests in thinner iPhones and sleeker MacBooks, they also have humane interests in more dignified working conditions and more liveable wages for the workers that make their products. And you, more than any other CEO, have the technological ability to poll your customers about who Chinese workers or millionaire shareholders should receive Apple’s excess money.

Are you scared that they might Think Different™ about this issue than Carl Icahn?

Sincerely,

Ralph Nader

MacDailyNews Take: A few points:

• The vast majority of AAPL shareholders are not “millionaires.” To claim otherwise is demagoguery, which is, of course, Ralph Nader’s stock-in-trade.

• Apple doesn’t have any Chinese factories, hence these are not “Apple’s Chinese factory workers.”

• Why would non-Apple companies have any claim whatsoever to Apple’s money over actual Apple stakeholders?

• Apple Inc. is a business, not a charity.

• Apple has done more to raise conditions and pay for Chinese factory workers than any other company on earth.

• Ralph Nader is an illogical kook. His open letter should be placed directly into Tim Cook’s circular file.

For more info, Apple Inc.’s Supplier responsibility website is: www.apple.com/supplier-responsibility/

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128 Comments

  1. Couldn’t have said it any better MDN.

    Nader is an opportunist ambulance chaser. Why doesn’t he start a company and actually create something of value and then he can pay his workers whatever he wants.

    1. Ok. I’m pretty left wing. I support gun control, and I like universal health care (bring Canadian). But if apple pays its contractors more money, then that increases the contractors profits. The money will NOT filter down to the workers.

      Also, I dislike the idea that businesses that are not profitable are exempt from considering the conditions of workers. Company x isn’t making any profit, so they can treat their workers like crap? Maybe company x shouldn’t be in business then, or maybe they should design a better product.

      Vent complete.

      1. I think of myself as a mildly conservative Canadian, but that pretty much makes me a communist to many of the folks on this site. But I agree completely with Doug. Any extra money that AAPL paid would go into the pockets of the management. They could try to write an agreement, but the workers would still be working double shifts in order to send the money home. In most cases, our enlightened viewpoint does far more harm than good.

        1. I’m to the left of many but once again, am sick of the hypocritical and ignorant singling out of Apple whenever it’s successful for abusing Chinese workers. I’ve yet to hear any other company mentioned when these concerns are raised. Nader and his old buddy Phil Donahue can go to hell. What have you done for me lately? Once upon a time, Nader seemed like one of the good guys. He’s a demented egomaniac who thinks he’s a super-hero.

        2. And yet I have to wonder, if Ol’ Ralphy were just as wrong about Exxon, Wal-Mart, Halliburton or Pfizer, would you rush to argue against him?

          I seriously think not, which is a small part of the reason we got someone like Mr. Obama as President.

    2. I’d gladly pay $20 more for a phone if it brought production back to the USA and put an American to work with a good paying job.

      If the can build Mac Pro’s here, they can also make iPhones and iPads here too. Better the money goes into the pockets of hard working deserving American, than a bunch of communists who abuse and exploit their own citizens.

      I don’t like my money going to the greedy, corrupt, anti-American Chinese Communist Party. They’re using that money to build weapons to fight us. Not to mention the party members who line their pockets with their ill gotten gains off the backs of their exploited workers.

      It’s just wrong, and needs to be changed. Too much sacrifice in the name of greed. We give billions of dollars to China, yet we can’t go on vacation to Cuba. They’re both as corrupt and a threat to democracy. Go figure.

      1. ‘make iPhones and iPads here too. Better the money goes into the pockets of hard working deserving American, ‘

        Or robots – that’s the only way these items will ever be made in the US again. Too many shirkers in the USA are riding on tax payers’ backs.

      2. There is a big difference in making 1 million Mac pros annually and 1 million iPhones a week. It would take a lot of infrastructure that currently doesn’t exist to produce iPhones in the USA.

    3. I must respectfully disagree with you. My viewpoint is not to infer that I am a right-wing conservative. Rather, my opinion is based on how publicly-owned businesses work.

      A publicly-held and traded company is owned by its stockholders. That could include big Wall Street institutions, large pension funds and hedge funds. But it also means that the owners of Apple are people like you and me, small-time investors. This is something that Ralph Nader simply does not understand. Ownership of a publicly held company is not monolithic; in fact, Apple owns but a small percentage of the shares of the company’s stock. (For details, see: https://finance.yahoo.com/q/mh?s=AAPL+Major+Holders)

      Second, as others have noted, Apple does not own most of the factories in which its products are produced. As such, those working inside the factories of its suppliers are employed by the suppliers, not Apple. That Apple is applying pressure and standards on its suppliers for better treatment of their (e.g., the suppliers) employees is a quite progressive move by Apple, something not always equaled by its competitors.

      Third, the factories to which Mr. Nader is referring are in foreign countries not beholden to US laws. It might be one thing if the issue was with a US-based factory owned by Apple, such as the Texas plant that produces Mac Pro computers, a company owned distribution warehouse, an Apple retail store or corporate offices. This is not the case. Apple has no control over the laws or practices of foreign countries in which its suppliers operate; it can only try to influence them to raise their standards. Nader must know this, or willfully chooses to be ignorant of reality.

      Fourth, Apple operates in a highly competitive global environment. That Apple has pushed to improve working standards worldwide for employees of its foreign suppliers is exemplary. However, its mostly foreign competitors are not typically held to such standards, which in effect is a double-standard.

      If Apple were to force its suppliers to vastly increase pay to its employees, would Samsung, Lenovo, Xiaomi or HTC follow suit? I rather doubt that. In fact, they would view such a move as a sign of weakness, and use this generosity to further try to undercut Apple’s pricing.

      If Mr. Nader is so concerned about working conditions in countries such as China, why does he not appeal directly to the Chinese government and to the supplier companies themselves? My answer: because he knows it is futile. Instead, by shaming a successful company such as Apple, he is merely grandstanding. At best, it is tilting at windmills. More likely, it is a shameless attempt to stay relevant and in the news, something I view as pathetic.

      Mr. Nader’s letter is the feel-good movie of the summer. But instead of demanding change from Tim Cook, Nader should shout at the millions of holders of the company’s stock and the Chinese government as well as the large competitors to Apple. He will not, because Nader must know this is a waste of time.

      Or perhaps not. To pursue such misguided idealism is to see a man completely out of touch with the reality of how a publicly-held business operates, and by extension, how capitalism operates.

      This is not to say that working conditions abroad are perfect. They are not. But consider the alternatives of an employee of a Chinese Apple supplier. Instead of working in a clean, highly managed factory with dormitories and cafeterias, assurance of relatively good pay, these same employees could be held hostage in sweatshops that are all too common in other parts of the world, paid barely subsistence level wages, toil under appalling conditions, and worse. These are not the standards that Apple allows, and Apple closely monitors its suppliers.

      I would be angered by the arrogance of Ralph Nader in this case. But I know this will go nowhere. Perhaps Mr. Nader can effect change within the United States. But in China, he has no voice. Using the tactic of shaming a company like Apple is by itself shameful, not unlike the greenmail shakedown practiced all too frequently by others you might name. If the end game of a Ralph Nader is to expect compensation to shut up, then he is no different than a Carl Icahn, but in the opposite polarity. By contrast, Icahn understands the nature of capitalism, however imperfect it might be.

      It’s sad to see that a man like Nader has no clue of the function of capitalism, the limits any company has over foreign countries, their laws or culture. Nothing will change. But I doubt that Nader really cares. He got is 15 minutes of fame on TV and in print by shouting from rooftops. And in the end, that is all he wants.

      That is not progressive thinking. It is self-serving. He should be ashamed, not Apple.

  2. Fu Nader. Hey I know, why don’t all u whiners start your own company and practice what u preach. Oh but doing that would mean actual work on your part. I guess its easier to sit around with pudgy, pasty al gore and bully people.

  3. Ralph Nader lost all credibility when he tipped the 2000 election to George W. Bush, aka “the worst President EVER”
    Any good Nader has ever done in his criticism of corporate actions is offset by the blood on his hand.

        1. Nope, I think with recent events Obama passed him. Even Carter publicly against many of Obama’s policies. So that gives him more intelligence than Obama.

  4. If Mr Nader would take a cultural anthropology seminar he might realize just how ridiculous his suggestions are. Desiring to change another culture and affecting the same are VERY different things.

    1. Still at it, Ralph?

      He made his big mark initially with his book about the Corsair, Unsafe at Any Speed. As the actual accident records demonstrate, his case was an outright fabrication.

      1. The Corvair certainly had its safety issues, but so did virtually every other car being built in the world at that time. It was also one of the most innovative cars built in America–rear engine, air-cooled, small and light. It was perfectly reasonable to call attention to widespread safety issues, but the way Nader did it–picking on a single model–guaranteed that nothing forward-thinking would come out of Detroit for decades.

        1. You are full of it. A good friend of mine was on the jury that found GM guilty. The fact that the Corvette had parallel rear wheel frames and this did not curl under and flip the car. In the trial it was shown GM thought of doing same thing for the Corsair but found it would cost $18 more than the single pivot they went with . The jury was unanimous in finding GM guilty, and so was any engineer or expert. You must not have been born then, there was not disagreement about the Corsair. Like the Pinto gas tank , deliberate cheapness of the car companies.

        2. maybe you are full of crap.. Cause it’s been debunked for years.

          Just a little reading for ya.
          http://en.wikipedia.org/wiki/Chevrolet_Corvair
          “First-generation (1960–1963) Corvair handling characteristics became the subject of controversy when Ralph Nader addressed them in his 1965 book, Unsafe at Any Speed. GM had over 100 lawsuits pending in connection with crashes involving the Corvair, which subsequently became the initial material for Nader’s investigations.[23] The book highlighted crashes related to the Corvair’s suspension and identified the Chevrolet suspension engineer who had fought management’s decision to remove—for cost reasons—the front anti-sway bar installed on later models. Nader said during subsequent Congressional hearings, the Corvair is “the leading candidate for the un-safest-car title”.[24] Subsequently, Corvair sales fell from 220,000 in 1965 to 109,880 in 1966. By 1968 production fell to 14,800.[24] Public response to the book played a role in the National Traffic and Motor Vehicle Safety Act in 1966.

          A 1972 safety commission report conducted by Texas A&M University concluded that the 1960–1963 Corvair possessed no greater potential for loss of control than its contemporary competitors in extreme situations.[25] The U.S. Department of Transportation (DOT) issued a press release in 1972 describing the findings of NHTSA testing from the previous year. NHTSA had conducted a series of comparative tests in 1971 studying the handling of the 1963 Corvair and four contemporary cars—a Ford Falcon, Plymouth Valiant, Volkswagen Beetle, and Renault Dauphine—along with a second-generation Corvair (with its completely redesigned, independent rear suspension). The 143-page report reviewed NHTSA’s extreme-condition handling tests, national crash-involvement data for the cars in the test as well as General Motors’ internal documentation regarding the Corvair’s handling.[1] NHTSA went on to contract an independent advisory panel of engineers to review the tests. This review panel concluded that “the 1960–63 Corvair compares favorably with contemporary vehicles used in the tests…the handling and stability performance of the 1960–63 Corvair does not result in an abnormal potential for loss of control or rollover, and it is at least as good as the performance of some contemporary vehicles both foreign and domestic.” Former GM executive John DeLorean asserted in his 1979 book On a Clear Day You Can See General Motors that Nader’s criticisms were valid.

          Car and Driver magazine criticized Nader for ignoring drivers’ failure to adapt their driving and vehicle-maintenance practices to the characteristics and requirements of the Corvair. None of the issues Nader raised were problems among owners of the Porsche 911, which had the same layout and similar suspension, nor with the less powerful Volkswagen Type 1 Beetle.

          Journalist David E. Davis, in a 2009 article in Automobile Magazine, noted that despite Nader’s claim that swing-axle rear suspension were dangerous, Porsche, Mercedes-Benz, and Volkswagen all used similar swing-axle concepts during that era.”

        3. @CupertinoJoe, I may be full of it but that’s beside the point.

          Not only am I old enough to remember the Corvair (I do wish you’d get the name right), but a good friend had one that I rode in many a time. We used to do some backroads racing–he in the Corvair (2nd gen) and me in an MG. Sure they both oversteered, but that’s what made them fun. Neither of us got killed.

          You say your ‘good friend’ was on the GM jury. As the Texas A&M study showed, your friend was taken for a ride. And not in a Corvair.

          You also appear to think that engineers saving money on parts is a bad thing. As the old saying goes, an engineer can do for a dime what any fool can do for a dollar.

        4. @CupertinoJoe: I owned three Corvairs (spellcheck tries to change it to Corsair) and drove them hard, including rallies and on snow and ice. Production Ford Mustangs were actually more dangerous. (I knew Caroll Shelby, and admired his Cobras and Shelby Mustangs for straight-line performance on dry pavemen. But they were almost unmanageable on ice.)

          The fact that trial lawyers sold a jury a lot of nonsense doesn’t alter the fact that actual accident records don’t support Nader’s case.

  5. Fundamentally he’s right, if he goes a little far in detail. There are 2 ways to control a workforce:
    1) beat them with whips
    2) reward them for work well done
    Those workers over there do good work, no doubt about it. But the ill will of their working conditions has a negative effect.
    So a little improvement in their conditions would go very far in engendering product quality and world wide good will right back at Apple. Money well spent IMHO.

    1. Yup, the Communist need to do some work to live up to the propaganda they say. The communist tend to talk and then forget that their companies routinely are the worst offenders to worker pay and treatment. Most of the money goes back to curropt politicians so they can ease past labor abuses and child labor.

      But, Nader did have an accurate view of the situation, just did not address it to the communist party that is responsible for its people’s well being. Oh, well, maybe Cook can forward the letter to them for Nader.

    2. I agree and, despite the our love for Apple and its products, the company could do a lot more in this regard. Ralph is right to bring it to light and we shouldn’t denegrate him because he’s pointing a finger at Apple. The blood, sweat and tears that goes into bringing us our favorite devices is often overlooked, explained away or just ignored so we can enjoy them guilt free. Apple is a very wealthy company that already shows it cares by some of the measures it’s taken in this regard, but there is more to be done. I hope Tim Cook will take this into deep consideration and not toss it aside. Al Gore being a member of the board may see the merits.

    3. All of you on this particular sub-thread, like Nader, fail to recognize that Apple HAS required the employers of Apple products to toe the line in its contracts, limiting workers on its products to 60 hours, already trebled prevailing Chinese factory wages on their lines, and improved conditions at living areas. It is so much better in the Apple lines that there are thousands of workers looking to work on Apple assembly lines when those jobs open up. Could more be done? Yes. The sensationalist reports Nader is citing are just that, sensationalist. . . and bad only in comparison to working conditions in our markets. For example the suicide rates are actually lower at the Foxconn plants than the suicide rates at most of our Ivy League Universities among young people of similar age groups, yet our news media made them a cause celebré when it involved Apple products. . . but it didn’t. The suicides actually were at plants making Microsoft Xboxes, Nokia phones, and HP computers!

      Facts are sticky things when they are brought to bear on the talking points of Liberals.

  6. I try never to agree with Nader, but MDN goes too far in the other direction. These factories produce almost if not exclusively parts for Apple’s huge production needs. If Apple stopped buying their parts, every one of those 300,000 workers would be on the street.

    To say Apple has no factories in China is legally true and yet practically 100% false. Apple provides these workers’ livings, with Foxconn as middle management skimming off the top and keeping the workers in line.

    MDN is probably right that Apple has done more than any other company. But as every other company has done nothing, that bar is very low. Apple claims to have higher ideals, and they have the power to effect huge positive change. Choosing not to do so is deplorable.

    1. As I said in another comment and it applies here too.

      “Yup, the Communist need to do some work to live up to the propaganda they say. The communist tend to talk and then forget that their companies routinely are the worst offenders to worker pay and treatment. Most of the money goes back to curropt politicians so they can ease past labor abuses and child labor.

      But, Nader did have an accurate view of the situation, just did not address it to the communist party that is responsible for its people’s well being. Oh, well, maybe Cook can forward the letter to them for Nader.”

  7. There is a huge misconception in Ralph Nadar’s letter regarding “Applee factories”; they aren’t Apple factories, they are Chinese factories which assemble Apple products or supply Apple with parts. Chinese factories employ chinese workers.

    Chinese workers employed by Chinese factories, mostly in main land China, should be the concern of Chinese human rights organizations or the Chinese governement exclusively.

    Stop bugging Apple about other countries’ workers working conditions.

    All Apple can do is having a policy or set of policies that factories are expected to meet if they want to become Apple suppliers or assemblers.

  8. The gross thing about Nader is that he needs successful people to be his target. The implicit message is that whiners like Nader are good people and that successful people like Jobs are bad people. “Stop succeeding and be a whiner like me” is the implicit message. That is why people find Nader disgusting. Nader would like you to think that those bad-successful people want to impoverish others. If Apple had not created the personal computer industry, then those Chinese workers would still be wading in rice paddies. If Apple had not exploded the smartphone industry, then progress would have lagged. Billions of people around the earth would have less access to information, news, and democracy (via the smart phone) than they have today. Nader retards progress. Just retire, Ralph. Let the new generation have a voice.

  9. As bad a personal attack as MDN has ever done.

    It’s important to treat people with respect before you shred their thoughts. Spell his name right, not as NADAR. I doubt this was a spelling error.

    And the reference to his “failed” campaigns is a cheap shot. His participation in Presidential campaigns brought important ideas into discussion. He never expected to win, but that was never the point.

    Ralph Nader has done much more for America -in particular car safety and consumer rights- than probably anybody who reads or writes MDN.

    Tim Cook is very aware of Ralph Nader, and he would extend to Mr Nader the courtesy which MDN has failed to here.

    And by the way, I don’t agree with a lot of Nader’s Apple ideas. He hits, he misses.

    Please show some class, MDN, “manners maketh Man.”

    1. Max you see where you went wrong, “manners maketh the Man” MDN is not run by men, it is run by a few snot nosed 20 year olds that have no real life experience. They attack anyone that has a brain. MDN couldn’t run a 711 and they offer advice to all.

  10. Actually he has a good point, but, there is always a but, you can’t be the only company to do things that are seen as justified. The change has to come within, Chinese workers need to demonstrate, they have to organize themselves and then, just like in every other economy will the wages be fair.

      1. If Nader and the Green Party hadn’t hadn’t soaked up votes that would have most likely gone to Gore, Bush would have stayed in Waco for the first eight years of this century, though it seemed like he spent most of his presidency there anyway, and his steely resolve is what got us into Iraq, where we never belonged. And, oh yeah, the people didn’t elect Bush the Electoral College did, contrary to the popular vote, which favored Gore. Then when it got “too close to call” the Supreme Court gave it to him.

        1. Electoral College was designed for situations like that.
          If it was popular vote only, California, NY etc would be the ONLY places that national candidates would go… and those areas would rule the country. States like Rhode Island would never get a voice.

          Popular vote does not work nationally.

      2. Bush left us a quagmire & a financial meltdown. When warned about the pending 9/11 attack, he spent the summer at his TX ranch cutting brush.

        The voters beat Bush by a million votes, the Electoral College, Supreme Court, & brother Jeb handed it to him on a silver platter.

        1. Wow. Don’t forgot to mention Bigfoot and Martians.

          You are a perfect example of why Obama was voted in.
          There are not enough words in the English dictionary to explain to you how wrong you are.

  11. MDN said, “Apple has done more to raise conditions and pay for Chinese factory workers than any other company on earth.”

    This is the key item which Nader fails to recognize. These Chinese workers were dirt poor before these electronics companies came along. The Chinese were earning, on average, less than $100 per month just a couple decades ago. Now, Mr. Nader condemns the evil capitalists who have raised China’s average income to about $1000 per month.

  12. Comrade Ralph, you are a disappointment to our party. Apple should just return all their quarterly profit to our dear workers and all grossly earned profits in savings to the party chief, a Supreme Leader Obama.

    Off to the reeducation camps with you!

  13. To The Cubicle-Huggers at McUpChuck: what are your qualifications to criticize Ralph Nader’s concerns? You run a website that scours the web (mainly from outside contributors) looking for stories relating to Apple. That’s it. That’s all. Oh, and you charge companies to rent ad space on said site. You have not contributed anything of value for humanity and yet you feel you can sit in your little air-conditioned cubicles and spew hate and disgust towards anyone you do not understand. Sad and pathetic. Sad and pathetic.

      1. a google news link brought me to this sorry site. sorry if you are unable to grasp the crux of my message: McUpChuck is a mean-spirited operation that cares little but to agitate and irritate in a vain attempt to get simpletons to post their little rants and to sell ad space. Says much for you and your contributions to this planet, yes?

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