Workers Making Apple IPhones Start at $3.15 Per Hour -- in China

Townhall.com ^ | May 15, 2019 | Terry Jeffrey

[Kaslin]

The workers who assemble Apple iPhones make a starting wage of $3.15 per hour in the People's Republic of China, according to The New York Times.

"Apple has said the starting pay for workers at the world's biggest iPhone factory, in Zhengzhou, China, is about $3.15 an hour," The Times reported in a story published two weeks ago.

That $3.15 per hour is less than half the U.S. minimum wage of $7.25 per hour.

That means a teenager working part-time serving Big Macs at a McDonald's in the American Midwest earns a far bigger hourly wage than a Chinese adult hired full-time to build iPhones in the People's Republic.

A 2018 Congressional Research Service report on the U.S.-China trade relationship summarized Apple's supply chain and its production of the iPhone.

"According to Apple Corporation, it used over 200 corporate suppliers with nearly 900 facilities located around the world," said CRS. "The top five largest country sources of these facilities in 2017 were China (358), Japan (137), the United States (64), Taiwan (55) and South Korea (34)."

"Apple iPhones are mainly assembled in China by Taiwanese companies (Foxconn and Pegatron) using a number of intermediate goods imported from abroad (or in many cases, intermediates made by foreign firms in China)," said CRS.

In 2016, The New York Times published an in-depth story about the Foxconn facility that assembles iPhones in Zhengzhou.

"Running at full tilt, the factory here, owned and operated by Apple's manufacturing partner Foxconn, can produce 500,000 iPhones a day," reported The Times. "Locals now refer to Zhengzhou as 'iPhone City.'"

"The local government has proved instrumental, doling out more than $1.5 billion to Foxconn to build large sections of the factory and nearby employee housing," said The Times.

"It helps cover continuing energy and transportation costs for the operation," said The Times. "It recruits workers for the assembly line. It pays bonuses to the factory for meeting export targets. All of it in support of iPhone production."

Is this free enterprise?

Is the Apple iPhone an American product?

Apple's relationship with the United States of America and American workers helps illuminate some trends in the modern American economy.

The United States normalized relations with the People's Republic of China in 1979 and gave it most-favored-nation status the next year, according to CRS. In 1985, the first year for which the Census Bureau has published U.S.-China trade data online, the U.S. ran a $6,000,000 merchandise trade deficit with China. That equaled approximately $13,791,382 in December 2018 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).

In 2018, according to the Census Bureau, the U.S. ran a $419,162,000,000 merchandise trade deficit with China.

That means that in inflation-adjusted dollars, our merchandise trade deficit with China was 30,393 times bigger last year than it was 33 years before then.

Who is winning this competition?

In January 1980, the year we extended most-favored-nation status to the People's Republic of China, there were 19,282,000 Americans employed in manufacturing, according to the Bureau of Labor Statistics. This January, there were only 12,826,000. As our population and economy grew, we lost 6,456,000 manufacturing jobs.

At the same time America was losing manufacturing jobs, Americans who did not attend college were losing income.

In 1980, according to the Census Bureau Table H-14, American households where the householder was 25 and older and had finished four years of high school but not attended college had a median income of $55,777 in constant 2017 dollars.

In 2017, according to Table H-13, households where the householder was 25 and older and had graduated from high school but not attended college had a median income of $44,970 in constant 2017 dollars.

From 1980 to 2017, the real median income of households headed by Americans who completed high school but did not attend college dropped by $10,807 -- or about 19.4 percent.

Those American householders now have little hope of getting a job assembling an iPhone -- unless they can somehow get a Chinese work visa and move to Zhengzhou.

And even if they were to do so, as The New York Times reported, they would join a workforce whose wages start at $3.15 per hour.

The U.S. Constitution united the American people in a vast free-trade zone that was coterminous with our international borders. It gave Congress the power to impose duties on foreign imports.

It did not envision creating a free-trade zone between this free republic and a People's Republic.

[Swordmaker]

"Apple has said the starting pay for workers at the world's biggest iPhone factory, in Zhengzhou, China, is about $3.15 an hour," The Times reported in a story published two weeks ago.

That $3.15 per hour is less than half the U.S. minimum wage of $7.25 per hour.”

This is what I have been saying for years, but people have not understood that one has to put it in perspective of comparative economies. What the New York Times article neglects to include is that the cost of living in China is about one fifth of the cost of living in the United States. Being paid one half of the US minimum wage in an economic environment that has a cost of living that is 20% of that in the US is far better wages than it sounds when they compare it to the a much higher economic environment. The adjusted minimum wage comparison would make that wage equivalent to a starting rate of $15.75 per hour in the US. To put that in comparison, a two bedroom apartment in Zhengzhou rents for the equivalent $50 US a month, adjusted $250 per month, or the worker can sleep free in a factory paid dormitory. The typical worker can also work an additional 20 hours of overtime per week (Apple contract limit) over the standard 40 hours. Unfortunately, Chinese labor laws do not mandate time and a half for overtime. The NYT also doesn’t mention that work on other assembly lines making other consumer electronics for other brands starts at around $2.40 per hour. Apple’s contracts with its subcontractors requires the workers be paid better than the prevailing wages. — PING!

New York Times Compares Chinese Wages to US Wages
to Try to Smear Apple (and Probably Trump) Ping!

If you want on or off the Mac Ping List, Freepmail me.

[Swordmaker]

Like buying slave labor in a communist dictatorship to increase immediate profits while cutting jobs for Americans.

Sigh. These are not slave laborers. They queue up by the thousands for each open job on the Apple Assembly lines because they pay better and have better working conditions than similar jobs even in the same assembly factory. They are paid a living wage in China which is upwardly mobile. It is enough they can send money they earn home to their extended families. They are not forced to work there.

Is the cost of assembly less in China than in the US? Yes. But the regulatory environment is far more the reason many of our jobs went off shore than labor costs. The ability to be nimble in response to a rapidly changing market is far more of a reason for a company to leave than labor costs. I talked to a California Consumer Electronic manufacturer several years ago who had invented a particular gadget. It took him over 13 months to get regulatory permissions to manufacture the second version of his product due to all the red tape, yet knock offs of his older versions were coming in from China were badly hurting his business. He really wanted to keep his employees in California at work, but he found that he could get his new product with the improvements made and on the market in just five weeks if he had it made in China. Guess what he had to do. . . And it was the US and California government regulators that kept demanding just one more hoop to jump through before he could tool up to make it here. . . and even then, many of the parts would have had to be imported from China.

[Swordmaker]

They’re a communist country. Why do they need wages at all?

Actually, they are not. China has embraced Capitalism with some parts of socialism in such things as health care. . . They learned that communism just doesn’t work. They found that after several decades of “five year plans” with commissars in charge of various sectors of their economy, that the commissars lied about results, and no matter how rosy they reported their production, it was always worse then reported, increasing goals based on lies, always resulted in less and less, until they almost nothing. Governmentally, they are still a state dictatorship with a nominally “official” communist politburo, but the economy is now fully operationally State Capitalism.

Some aspects of Chinese economy are operated in a socialist model, such as state owned power generation, shipping, and some banking, along with some public/private business partnerships and some wholly government owned businesses such as Huawei cellular phone company, but those companies are competing against similar businesses in the same industries. . . but even these often go “public” by offering stock on the Chinese stock exchange to raise funds. The government owned businesses have a big advantage in financial backing. The Chinese have eschewed the centralized planning that denotes a communistic government and adopted market driven decision making.

[ProtectOurFreedom]

Was that what Dad paid you to mow the lawn?

My first real job for a company in the mid 60s paid the then-minimum wage of $1.60.

[Swordmaker]

My first real job for a company in the mid 60s paid the then-minimum wage of $1.60.

Minimum wage in US in 1965 to 1967 was $1.25 an hour. Some states may have established a higher minimum.

Year — Wage
1939 — 30¢
1945 — 40¢
1950 — 75¢
1956 — $1.00
1965 — $1.25
1967 — $1.00 / $1.40
1968 — $1.15 / $1.60
1969 — $1.30
1970 — $1.45
1971 — $1.60
1974 — $1.90 / $2.00
1975 — $2.00
1976 — $2.20 / $2.30
1977 — $2.30
1978 — $2.65
1979 — $2.90
1980 — $3.10
1981 — $3.35
1990 — $3.80
1991 — $4.25
1996 — $4.75
1997 — $5.15
2007 — $5.85
2008 — $6.55
2009 — $7.25 to now.

In years where there were two minimum wages, the upper value was a floor for manufacturing jobs, the lower value was generally for store workers.

[SunkenCiv]

There's something behind the sudden media dogpiling, and I'd speculate it has something to do with someone making a killing on margin.

[ProtectOurFreedom]

Interesting...I sure do recall the $1.60 number. I hope they don’t want the overpayment back. Now I’m going to lose sleep.

[morphing libertarian]

who did you work for the transcontinental railroad?

[Trump Girl Kit Cat]

We have $15.00 an hour in CA. HUGE problem is prices of EVERYTHING in the damn grocery stores has really jumped SO whatever increase these idiots got has NOT improved their living condition, BUT isbeing soaked up by much higher prices for ALL goods, AND much higher taxes being taken out of their paychecks the ONLY damn people coming out ahead with the increase are the tax collectors!!!

[varyouga]

“They are not forced to work there.”

Right. They can choose to starve, work in even worse conditions or get sent to prison work camp. Not forced at all.

China has no free speech, no individual rights to inventions, does not allow most people to leave the country and I personally know several people who went to re-education prison for merely talking about leadership with friends.

They also steal every piece of IP they come across and treat the ocean as a dump. Nice “regulatory environment” they got there.

We NEVER should have given these slavers a dime.

Plenty of phones are made in the FREE nation of South Korea and we have no need to give communist China our money. Hopefully some phones will soon again be made in the USA. When that happens, I will buy it day one!

[roadcat]

Those Chinese sure have nimble fingers!

I've watched YouTube videos of Chinese workers in factories in China. OSHA would be shocked! Stamping machines pounding metal into shape, have a Chinese worker sticking their hand between the die tools to remove stamped metal, about every half second or so. If the worker gets their timing off, goodbye hand or fingers. Very labor intensive work under dangerous conditions; that type of work is done by robotics here in the U.S.A. These human intervention procedures are everywhere in China, with workers putting their limbs and bodies in harm's way making machines and motors.

[roadcat]

I have learned from TV that the Chinese have as much of a problem eating noodles with chop sticks as I do.

That's because of the chop sticks. The Japanese have perfected the manufacture of chop sticks, what with raised ridges and non-rounded edges. The Chinese use slippery cylindrical rods that are nearly impossible to grab noodles. Next time you eat at a Chinese restaurant, bring some Japanese smart chop sticks.

[roadcat]

They likely wear one to keep down the issues with inhaling all the dust and lint?

My wife and I carry N95 masks with us. I wear one when sitting in a doctor's office, or other areas with lots of strangers. I place tape on the inside over the exhale valve to keep me from infecting others when I have a cough; remove the tape otherwise. Comes in handy in dusty or smoky areas. There are a lot of people who cough or sneeze on public transit, you really should wear a mask on public transit.

[Swordmaker]

Right. They can choose to starve, work in even worse conditions or get sent to prison work camp. Not forced at all.

You don’t know what you are blithering about. . . Prison work camps? Come into the 21st century, varyouga. No, they are not forced at all. Starve? Many of these workers leave and start small businesses. There is a huge (25 store market place in ShenZhen which is just made up of small stores owned by individuals making and selling small electronic parts, up to and including entire big screen TVs. Thousands of them.

The World’s Greatest Electronics Market and a Tour of Shenzhen’s Seeedstudio

In Shenzhen, China lies the world’s greatest electronics market named Huaqiangbei, pronounced huá qiáng běi (sound byte of pronunciation). Huaqiangbei is a Maker’s dream. The market however is not foreigner friendly and requires some local knowledge to navigate.

Located 10 miles from Hong Kong, you may recognize Shenzhen as synonymous with Foxconn. Foxconn, the world’s largest electronics manufacturer, makes Apple products, Kindles, Playstations, and Wiis to name a few. Most factories are located an hour north of Shenzhen, but they maintain a presence in the form of a stall with sales representatives in Shenzhen’s Huaqiangbei market.

As there are no direct flights to Shenzhen from the US, you’ll fly into Hong Kong and then catch a van, ferry, or train to Shenzhen. For US citizens, getting to Shenzhen requires a Chinese visa. At the time of this writing, the visa must be obtained from the US and cannot be obtained from Hong Kong. Note that some EU countries and Australians are allowed to obtain a special five-day Shenzhen only visa from Hong Kong directly. Check with local regulations, as these rules are dynamic. . .

More at article site. . . Including photos.

You can go to any city in China and find booming entrepreneurs and thousands of small businesses founded by individual capitalists working for themselves, not slaves you claim are being forced into slave labor camps. Your data are twenty-five years out of date.

China has no free speech, no individual rights to inventions, does not allow most people to leave the country and I personally know several people who went to re-education prison for merely talking about leadership with friends.

They also steal every piece of IP they come across and treat the ocean as a dump. Nice “regulatory environment” they got there.

So what? You claim that South Korea makes their phones in South Korea? Think again. The second largest customer of FoxConn is Samsung. . . Assembling Samsung phones in China. LG does the same thing. FoxConn is not Chinese, it’s a Taiwanese multinational company.

[Swordmaker]

We have $15.00 an hour in CA. HUGE problem is prices of EVERYTHING in the damn grocery stores has really jumped SO whatever increase these idiots got has NOT improved their living condition, BUT isbeing soaked up by much higher prices for ALL goods, AND much higher taxes being taken out of their paychecks the ONLY damn people coming out ahead with the increase are the tax collectors!!!

Not yet. That’s the target minimum wage by 2022. The current California minimum wage outside of insane San Francisco and perhaps a few other asylums is $11.00 for 25 employees or fewer, or $12.00 for 26 or more. That goes up a $1 in 2020.

[minnesota_bound]

I can buy all sorts of smart phones for under $200

[numberonepal]

That’s exactly what I made at my first job cleaning a meat market.

[Mark17]

Well; we now know about the Apples; tell us about the Oranges.

Sorry, I can’t do it. I am not very tech savvy. 😁

[elbook]

Apple Execs and the ChiComs - just two different brands of liars

[varyouga]

“So what?”

That is your response to human rights abuses?

I have several phones actually made in South Korea and never buy Chinese product. I’m aware Samsung is made in China and do not buy them.

If there was no option but China, I would rather be phoneless.