Last February, President Barack Obama spoke with Silicon Valley luminaries and asked Steve Job of Apple Inc., “What would it take to make iPhones in the United States?” Of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year, most were manufactured in foreign countries. Jobs replied, “Those jobs aren’t coming back.”Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have outpaced their American counterparts. Wei-Chung Wang, assistant professor of economics, discusses how Apple effects and influences the current United States economy.
What happened to the pride and quality associated with “American made” products in the United States?
Say you have two iPhones, one made in the United States and the other made in China. A person would assume the one from the United States is of better quality. However when a person goes to buy the phone, they discover the phone made in the United States costs 300 more percent compared to the phone made in China. Obviously, a person will want to buy the cheaper of the identical two phones. Nearly everything is manufactured for a cheaper price in foreign countries where labor is consequently cheaper as well. Individuals must realize there is a tradeoff that occurs when manufacturing and producing products. Cheaper shelf prices correlate with assembly line quality.
What are the positive aspects for a company when manufacturing overseas?
There is a difference between quality and price. People in most situations will sacrifice quality over the price of a product. Most products in Wal-Mart cost under $20. Wal-Mart provides their customers with inexpensive prices and a high level of convenience. Companies spend countless hours creating this competitive advantage. Manufacturers in foreign countries have the competitive advantage of lower worker wages and henceforth lower product prices. People in this day and age want to buy cheaper products. Manufacturing overseas is the only viable option for companies to keep this competitive advantage.
How would the production of Apple products in the U.S. affect our current economy?
Apple does not care about the economy, Apple cares about Apple. Economists should care about the job market in America, not United States companies. President Obama gave his State of the Union address recently where he discussed the current state of the education system. Out of all the government programs, education has the slowest rate of success. You do not see immediate results. First a person must complete their secondary education, then their undergraduate education, and finally their postgraduate education. This process takes 16 years at least. Change does not happen overnight or with one company bringing jobs to America.
What is the likelihood for the return of the “American made” product in U.S.?
Steve Jobs should have rephrased his quote to say, “Low-skilled jobs are not to come back to the United States.” It is not Apple’s concern as to why low skilled jobs are not returning to the America. On the contrary, the government should be concerned about establishing government programs to enable this type of work. With the convenience of worker labor and cheaper manufacturing costs in foreign countries, companies will continue using this competitive advantage.
Americans show concern about the worker conditions and compensation rates for workers in China and other foreign countries. How does this “competitive advantage” work in favor of these countries?
Many people in China have been working all their life. They work for many years with 16-hour work shifts. People in the United States and Europe generally have had a nice life. Most people do not face the conditions workers in foreign countries face. The amount of work individuals put into their jobs in foreign countries is their competitive advantage. However, decades ago, the United States treated their workers similarly. Where is it our place as Americans to judge these foreign countries’ competitive advantage when America did the same thing?
~Kayci Nelson ’14, Juniata Online Journalist