President Obama Is Right? Apple Manufacturing Jobs Will Never Return To America

Towards the end of the presidential debate, the moderator Candy Crowley asked a straight forward question to both the candidates. She said, most gadgets like the iPad, the Macs and the iPhones are all manufactured in China. Can the US companies that outsource these manufacturing jobs be persuaded to produce them here?

Mitt Romney tried to explain how these jobs could be brought back, by reining in China, by making America a more lucrative place for entrepreneurs, by lowering taxes, by determination and commitment.

President Obama’s answer was unexpected and startling. These jobs have been lost forever, they are not coming back, he said. They are “low-wage, low-skill jobs,” Americans are just not interested in doing them. The answer was honest, truthful and a harsh acceptance of reality.

When Obama gave the stark answer, he must have recollected his famous meeting with Steve Jobs a few years ago. He had asked Jobs the same question that Crowley asked him. “Why can’t you make iPhones in America?”  Jobs answer was the same as what Obama told Crowley, “These jobs are never coming back.”

Here’s why the jobs are not coming back:

Apple employs thousands of its own workers and around 700,000 assembly workers in factories where manufacturing contractors like Foxconn assemble Apple products.

Foxconn is China’s largest single employer and manufactures almost half of the world’s consumer electronic devices. In simple arithmetic it means that it manufactures alone, what the rest of the world manufactures together. It would be impossible to produce goods on such a mass scale in America.

It pays its assembly workers much less than the minimum salary that American laws would permit. Workers get around $18 a day. A wage that would see 100s of cases filed against the company. Moreover, producing the gadgets in America would hike up the production costs by $65 to $100 per appliance.

Okay it costs more to produce; it will sell for more, so price is a factor but not the determining factor. The real problem is the pace at which products are made. In Chinese manufacturing houses employees stay in dormitories within the factory premises and hundreds of thousands of workers join assembly lines within minutes of being asked to.

Furthermore, there are no fixed hours and workers work like robots, for long hours in tough working conditions that most Americans would strongly object to and unions and human-rights groups would be crying foul from the first day of work.

Products are prepared with such speed and efficiency that they belie conventional manufacturing wisdom.  An addition benefit is that most of the component suppliers for Apple and other tech giants are also in China, making it easier for them to avail of them and allowing companies to make last minute adjustments and still meet production deadlines.

Another point and not many US lawmakers and those who cry themselves hoarse about jobs being outsourced like to accept is that, China has more skilled engineers than America.

Steve Jobs, Apple’s legendary CEO had told Obama that America’s uninspiring education system was an impediment for Apple as it failed to produce the 30,000 industrial workers the company required.

“You can’t find that many in America to hire. If you could educate these engineers, we could move more manufacturing plants here.”

There is little doubt that China has taken a huge toll of American jobs. But these are the type of jobs that Americans don’t want to do.

Until then, they had better stay resigned to the fact that these jobs will remain where they are – it is to the President’s credit that he accepted the truth and had the courage and candor to admit it.