Apple is different from most manufacturers in that its labor costs are a very small part of its cost of doing business. The company only has about 115,000 employees worldwide, which is a far cry from the largest US-based employers like IBM (430,000), McDonalds (440,000) and Wal-Mart (over 2 million)
The beauty of subcontracting the vast majority of the assembly work is that labor conditions are Foxconn's problem. The Chinese are also highly nationalistic - if employed directly by Apple, they'd have big problems with being paid less than their US counterparts. They can't complain about Foxconn - it is paying them roughly the same (as Foxconn's other employees) to assemble stuff for Apple.