Apple, iPhones and The American Middle Class

The New York Times has just published a fascinating piece focusing on a detailed examination of how Apple, Inc. came to make its products, specifically the iPhone in a massive plant in Shenzhen, China. This account, which is essentially an allegory of what has happened to much of what used to be the American middle class, deftly explains just how easy it has become for big companies to ship jobs overseas.

Reporting Apple's massive operations in China has become increasingly common in the last few weeks. Public Radio program, This American Life just devoted an entire episode to the one man show by Mike Daisey chronicling his own amateur reporting adventures in Shenzhen. While Daisey tells his story from the first person, Times writers Charles Duhigg and Keith Bradsher look at the machinations behind overseas job competition and the sea of factors involved in choosing where to locate a factory or hire workers.

The article is not an expose of Apple, but a specific example of the increasingly ubiquitous problem of middle class job exportation. In one anecdote, a former Apple executive discusses the flexibility and fast reaction times of their plant in China and the likelihood that such a system could exist in the United States.

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight. 

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. 

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.” 

Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals. 

But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What’s more, the company’s decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined. 

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.” 

Companies and other economists say that notion is naïve. Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say. 

This is but one example in a stirring piece of reporting that explores a complicated problem that appears to be here for the foreseeable future.