Bad Apple: Could the Era of Exploitation Outsourcing Be Near Its End?

Recent scathing stories about working conditions in the creation of iPads and iPhones are a telling moment for Apple Inc. and other global corporations. Could this latest episode of outrage over worker mistreatment at an outsourced factory signal that the age of exploitation outsourcing is waning? I think so.

You’ve probably heard about one or both of the stories that have rattled Apple’s massive customer base and the rest of the public. First, This American Life broadcast the first-person account of Mike Daisey, a self-proclaimed Apple enthusiast who traveled to China to see how apple products were made—and was horrified at what he found.

Then the New York Times published a long story about harsh, dangerous working conditions at factories making Apple products. Daisey says he met with workers whose hand joints have “disintegrated” from repetitive work, while the New York Times piece centered on the tale of a young employee killed in an explosion of aluminum dust—not long after an advocacy group warned Apple of aluminum dust problems.

Apple is far from alone in tapping cheaper overseas labor employed by third-party firms. Many U.S. companies have tried to wash their hands of the actual making of things. They may have decent or enlightened labor practices for their direct employees. But by farming out production to suppliers in China and other low-wage countries with few labor protections, they often have outsourced not just work but worker abuse.

This is not a new story. In recent decades, the public has heard withering tales of clothing-makers such as Nike Inc. outsourcing to third-party firms that took advantage of workers in the developing world. Even in consumer electronics, substandard labor treatment in the supply chain has been proclaimed in the media since at least 2006. That’s when a British publication reported harsh working conditions in the making of the iPod at Apple supplier Foxconn—the same company at the heart of the recent allegations.

But for the most part, U.S. consumers have been willing to turn a blind eye to Apple and others. A New York Times survey of Americans late last year found that only 2 percent mentioned Apple’s overseas labor practices as a concern.

In essence, consumers have focused on Apple’s remarkable products rather than how they are produced. That goes for me, too. I have written critically about labor issues at Apple. But I’ve had a series of Mac laptop computers for more than a decade. And as I compose this blog item, I’m listening to our family’s iPod.

Apple has addressed supply-chain problems in recent years to some degree. But our collective apathy about working conditions behind iPods, iPhones and the like has allowed the company to prioritize speed and profit over decent treatment of people.

“You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards,” a current Apple executive told the Times. “And right now, customers care more about a new iPhone than working conditions in China.”

But that’s changing. In recent years, there has been a shift in attitudes among consumers toward a desire to do business with companies that show “kindness” in their operations. People also are increasingly identifying as “global citizens,” meaning they have more empathy for people on the other side of the world. What’s more, tools such as Facebook, Twitter and YouTube give people more opportunities to express themselves. This means companies increasingly face penalties for mistreating people—whether those workers are direct employees or not.

The New York Times story on iPad working conditions, for example, generated 1,770 reader comments. Many, if not most, blasted Apple or the overall system of cheap labor. And an online petition prompted by the This American Life piece that calls for Apple to protect Chinese workers has garnered roughly 166,000 signatures—and counting.

“We care about every worker in our worldwide supply chain,” Apple CEO Tim Cook reportedly wrote in a memo to employees in the wake of the stories. But the public isn’t buying it. It sees some rotten labor practices at the core of Apple. And, increasingly, people, including Apple’s own employees, will demand better of the company.

The bottom line for Apple and other companies is that a shameful supply chain is less and less viable. Happily, the age of farming out worker exploitation is coming to a close.

Ed Frauenheim is senior editor at Workforce Management. To comment, write to efrauenheim@workforce.com.