There must be a memo circulating around Forbes.com that goes something like this: Under no circumstances is the idea that Apple can make any of its products in this country to be countenanced. In all articles it must be clearly stated that Apple manufacturing or assembly jobs are never coming back to our shores. That is all.
I first began to wonder about the existence of this memo when I had the silly idea in November of last year of suggesting that if Apple reshored its iPad assembly jobs from Foxconn in China, 67,000 iPad assembly jobs paying around $14.00 an hour could be created in this country. The reaction from Forbes.com was a post by Tim Worstall setting forth reasons why my idea was flawed. But the “China is the natural home of Apple assembly” message has to be repeated often to be effective, hence the latest Forbes.com article posted just this last weekend.
Kenneth Rapoza of Forbes.com is the latest spokesman for the alleged natural law that all Apple products must be made in China by Foxconn. His weekend post contains all the necessary points found in your typical “outsourcing is inevitable” article. Let’s go through them shall we?
Americans shouldn’t be working in anything but “high-end” manufacturing
Mr. Rapoza describes the work of the Foxconn employees as a day of “sitting at table with a fork and knife in front of you, and all you do is lift the fork, put it down; lift the knife, put it down. There’s no food there. That’s all you do, lift the fork, then lift the knife. Then repeat.” It is not surprising that a fella writing for Forbes.com would believe that no American would want to assemble iPads or iPhones, but I bet the 15% of the U.S. population that is unemployed might have a different view. Americans do actually assemble electronics in this country. They make about $14.00 an hour. Not a ton of cash, but for full-time work it amounts to about $27,000 a year. And if Apple brought its iProduct assembly work back to this country, you could imagine that a lot of jobs paying that each year would be created. Of course lifting a fork and putting it down all day for $14.00 an hour is not as intellectually challenging as writing yet another article on the inevitability of offshoring, but if you have exhausted your unemployment benefits you would probably take it.
Americans should be designing high-end products
Mr. Rapoza seem to be channeling Thomas Friedman with his assertion that “Washington Republicans and Democrats all agreed that it was best to have the U.S. worker design and make high-end products, whether it was R&D at Apple, or heavy machinery at Caterpillar. But assembling widgets and putting puzzles together, in essence, was not where the U.S. wanted its workers to be in the global labor pool.” Friedman is always prattling on about how American workers need to develop their “high value ideation” skills, whatever that means. What Friedman and his ilk always fail to acknowledge is that a college degree is probably a requirement to be able to “design high-end products.” And only 30% of Americans ever get a college degree. The “we will all be software and high end product designers” crowd is always a bit vague regarding what the other 70% of Americans are supposed to do if manufacturing things is off the table. Although in his NY Times article referenced above, Friedman suggests that some of us could become waiters and bellhops for Chinese tourists.
The usual conclusion
Mr. Rapoza definitely sticks to the company line. “China has taken a toll on U.S. manufacturing jobs since the 1980s. That is indisputable. But a lot of the jobs that they have taken have been jobs like Bill Weir has shown us at Foxconn, and these are jobs that Americans don’t want to do for the long haul.” iPhones and iPads could be assembled in this country and probably 67,000 of Mr. Rapoza’s “fork lifting” jobs would be created paying $27,000 a year to the fork lifters. And Apple could sell the iPads and iPhones for the same price that they are being sold today. But to reshore these jobs, Apple would have to cut their margin on their iProducts from 55% to a measly 40%. Wow, there is no way they could do that! Oh wait, they are sitting on $100 billion. And many businesses routinely survive on margins that are south of 10%. So in fact, maybe they could bring those jobs home.
Fork lifters of America unite! Tell people like Mr. Rapoza that lifting forks is ok until you have developed your “high value ideation” skills. Not the greatest job in the world perhaps, but ok for paying the rent and buying groceries. Just imagine, maybe two fork lifters might get hitched. If they did, their little forklifting family would make $54,000 a year. Not too shabby in many parts of this country. And they would be doing real work making products that would be of value to their fellow citizens. Come to think of it, making the kind of money they would be making, these members of our extended American forklifting family could probably afford to buy a couple of the iPads and iPhones they made. Foxconn employees in China? Not so much.