TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

A Chinese immigrant whose aunt worked for Foxconn wrote David Pogue about Foxconn’s factory conditions:

If Americans truly care about Asian welfare, they would know that shutting down “sweat shops” would force many of us to return to rural regions and return to truly despicable “jobs.” And I fear that forcing factories to pay higher wages would mean they hire FEWER workers, not more.

Anyway, now my aunt has been living in New York for one year after saving up money for a plane ticket and visa, and she is wonderfully happy to have escaped Asia and reunited with our family. None of this would be possible if it wasn’t for that “sweat shop.”

The “jobs” he refers to? Prostitution, which is what his aunt did before working for Foxconn.

Working in Foxconn’s factories certainly isn’t “good” work, or enriching work, or enjoyable work. But it’s work, the conditions are much better for most workers than working in rural China, it pays relatively well, and it provides opportunities for people whose families have been locked in poverty in the countryside for generations.

There’s nothing unethical about Apple’s practices. They use Foxconn to manufacture their products and push them rather aggressively to improve working conditions. What we’re seeing in China is what occurred in the Western world during the nineteenth century—a poor country is being transformed into a wealthier, developed country, and that’s what this process looks like. When nations are poor, they compete on the cost of labor, because their workforce is uneducated and unskilled, and that’s what they have.

Conditions are poor during this stage, because reducing cost is the main focus, and because workers have no ability to demand better conditions, because productivity is low and each worker is replaceable. As the economy develops further, worker productivity rises, and wages rise along with it.1 As productivity increases and wages along with it, two things happen: first, workers become relatively more affluent and expect a better standard of living, and second, workers have more leverage over their employer to demand better working conditions.

That’s how economies develop and working conditions increase. Labor laws help, but a labor law that isn’t economically feasible for the country will either do nothing, or do more harm than good. There is no magic way for China’s working conditions to instantly match the Western world’s. It is a process which takes time, but it is a process which makes people’s lives much better. It’s very hard to understand just how poor China is, but developing brings opportunities to people whose families haven’t had much of any for centuries. And that’s no exaggeration.

Others have argued that Apple is acting unethically because they use a company with relatively poor working conditions rather than manufacture their devices in countries with better conditions. The implication people make is that Apple only does this because China provides low-cost manufacturing, and since they don’t manufacture their products in countries with better conditions, they’re only concerned with reducing cost and maximizing profit.

Perhaps Apple’s management is only concerned with maximizing profit. That’s certainly possible, but it is also irrelevant, because the core of this argument is absurd. By using Foxconn, Apple is providing employment for hundreds of thousands of people who need opportunities to get out of the countryside and provide for their families. Moving their manufacturing to, say, the U.S. would certainly be good for the U.S. economy, but possibly disastrous for those workers. Other manufactures may hire some of these suddenly unemployed, unskilled workers, but it’s difficult to see all of them being hired. And even if they were, they would be working in precisely the same conditions they were before, or worse, so the net result is this: hundreds of thousands of unskilled Chinese workers lose their job, are forced to seek employment at other factories with similar or worse conditions, and may not find a job which pays a comparable amount at all.2

That’s Apple acting unethically? People making this all-too-common argument are making judgments before thinking through their reasoning for it, or the implications of their preferred outcome. That’s irresponsible, and that’s a charitable characterization.

The net result here is that Apple is contributing to a process which will improve the lives of hundreds of millions of people, and they are aggressively pushing Foxconn to improve working conditions. No, there’s nothing unethical about what Apple’s doing. Maybe they could be even more aggressive. But it is absurd to say they’re acting unethically.

1. Think about what happens as a worker becomes more productive—that is, they can do more work, or more effective work, within the same amount of time. If a worker’s productivity increases, the company benefits because they can produce the same output for less cost. If a worker who is paid $2/hour and produces 1 unit/hour of output now produces 2 units/hour, the company’s cost per unit has declined from $2/unit to $1/unit. That productivity supports higher wages (say, $2.50/hour), and if the worker’s current employer won’t increase her wage, another company certainly will. Wages tend to increase as a result. [↩]
2. Imagine if all large Western companies followed this principle and chose not to use Chinese manufacturing. China’s economic growth would come to a screeching, painful halt, and hundreds of millions of people would be denied the chance of a higher standard of living. How the hell is that ethical? [↩]