90 Million iPhones. 17 Suicides. Do People Care? Let’s Find Out

March 2011 Wired Magazine Cover

March 2011 Wired Magazine Cover

That’s the cover of last month’s Wired magazine. The corresponding piece by Joel Johnson, 1 Million Workers. 90 Million iPhones. 17 Suicides. Who’s to Blame? is a really thought provoking read about the Foxconn plant in China where iPhones are manufactured…and where 17 people have killed themselves in the past five years. It probably would be more if they didn’t install “suicide nets” to safely catch anyone who tries to jump:

Foxconn Suicide Nets, via Wired.com

Foxconn Suicide Nets, via Wired.com

The sister piece, Made in America: Small Businesses Buck the Offshoring Trend discusses a trend of American businesses who are choosing to manufacture in the US to cut down on mistakes, save on shipping costs, and stop intellectual property theft. A lot of this is made possible by using automation to counter cheap overseas labor.

But what if there’s another option? What if consumers would just pay more for an American-made iPad?

Do we care? My personal opinion is that people do, just that they don’t have a choice. If I want an iPad my only choice is one made in China by Foxconn. Now, if I walked into a store and saw two iPad’s, one made in South Carolina selling for $599 and one identical one made in China selling for $499, that’s how you’d figure out if consumers care or not.

It’s hard to say how I’d react in that situation, but I think there’s a decent chance that I’d pay extra for that iPad with a “Made in USA” sticker on it, and the label explaining how this iPad was “made close to home with environmentally friendly manufacturing processes by American workers in a safe and modern manufacturing environment”…or whatever other advantages they could place on a US-made iPad.

And before you say, “Adam, that would never work!”, consider the one good example of this that’s succeeding right before our eyes: organic foods (and other organic products). People are willing to pay huge premiums – 10%, 25%, 100%, even more – to buy vegetables that don’t contain pesticides or meat from cattle that was grass-fed. Many times the sources of your organic food are local farms and not some farm on the other side of the world. Even during a recession, even at price-conscious chains like Walmart, organic food sales continue to grow at ridiculous rates.

Why? Because ultimately I think people care about where their stuff comes from. You just have to make the choice easy. When I’m standing in the super market and I see two packages of chicken, one from an organic farm and one not, it’s hard not to buy the organic chicken even if it’s a few dollars more. Part of it is that I think it’s a healthier choice, but I also like supporting local companies with good, safe, sustainable practices. I almost feel cheap/guilty if I don’t buy organic when the choice is so simple! Clearly I’m not alone.

So while it might not be an apples-to-apples comparison (no pun intended), I think that there’s a decent chance that given a fair opportunity, people would choose a slightly more expensive product to know that it was made in a place where workers weren’t killing themselves with regularity.

Update 4/23/2011 – I was driving home today listening to TWiT when Leo Laporte and Kevin Rose brought up literally the same idea. A few minutes of interesting discussion ensued. Here’s the video on YouTube (I linked to the correct time in the video, but there’s a minute or two of backstory).

Update 5/7/2011 – This Wired.com article from yesterday, New Report Details Onerous, Illegal Working Conditions At Foxconn, depicts some of the poor working conditions at Foxconn, including working up to 100 hours of overtime per month (36 is the legal limit in China).

Update 5/22/2011 – a deadly explosion at Foxconn this week killed two and injured 16, and is also threatening to create an iPad shortage.

9 comments on 90 Million iPhones. 17 Suicides. Do People Care? Let’s Find Out

  1. Anthony says:

    Sorry Adam, but have to vehemently disagree here.

    First of all, I think there is one major flaw in the “organic food” argument, and it’s that organic food is of direct benefit to the consumer. We have been made aware of how extremely unhealthy/questionable non-organic food may be, and so while buying it has the *side effect* of being the “right” thing to do, most people do it for far more selfish reasons.

    Unfortunately, buying an iPad made in the USA is of virtually no direct benefit to the consumer. And while acting on principle may appeal to some consumers, the number will be low. After all, according to the article you linked, even though organic food sales are growing, they still only account for 4.4% of all sales. So if only 4.4% of people are willing to buy a product for more money when it actually benefits them, what percentage do you think will buy a product that doesn’t?

    Well, as it turns out, there’s an industry that answers just this sort of question — car manufacturing. Have people hesitated over the past few decades to buy cars made overseas? Not at all.

    It’s quite clear that people could care less where their merchandise – everything from dollar-store items to the cars they use every day – actually come from. That is, unless it affects them in some sort of selfish way, whether it’s buying organic food because you want to be healthy or buying American cars because you live in Detroit.

    So, the numbers simply don’t add up. And unfortunately, electronics don’t work like food. You can offer organic and non-organic as options because both have their own pseudo-economies-of-scale. They’re both profitable to produce, so they can co-exist. However, an iPad manufacturing facility in the US that only accounts for, say, 2% of all iPad sales, would not be profitable. The iPad would cost the end user more, and have to be written off at a loss for Apple — complete unsustainable.

    • Adam McFarland says:

      Good reply. Obviously I’m just thinking out loud here with a post like this.

      I’m not sure the car reference is relevant. Currently, many “American” cars are manufactured overseas, while many of the Toyota’s/Honda’s/BMW’s/Kia’s/Hyundai’s that we buy are made in the US (a somewhat biased but still good reference of all the US plants is http://www.whatisanamericancar.com/ ). So the line between what is an American car and what isn’t is pretty blurred.

      When there was a mass movement towards buying Honda’s and Toyota’s in the 1980’s it was in large part because the product was better, Japanese manufacturing was light years ahead of domestic, not necessarily because it was more affordable. If there was a virtually identical GM car placed next to a virtually identical Toyota at the time, maybe people would have preferred to buy American, potentially even at a premium.

      However, an iPad manufacturing facility in the US that only accounts for, say, 2% of all iPad sales, would not be profitable.

      Maybe, maybe not. It would depend on the costs of materials, shipping costs, the end retail price, how it’s marketed, location of the factory, level of automation, etc, etc. It hasn’t been attempted, at least on the level of an iPhone or iPad where consumer demand is high, so we don’t know.

      Regardless, while my preference would be to likely pay a little extra, my point is really that the only way to tell whether people cared or not – the premise of the Wired article – would be to place two identical products, clearly marked, side by side with different price tags and see which one wins. While the organic reference isn’t perfect, it’s the closest thing I can come up with because you’re literally standing in the store looking at two pieces of fruit, one way more expensive than the other, and the expensive one still sells often enough to justify it’s continued existence.

      • Anthony says:

        See, I have a slightly different take on this. The fact that the iPad is, well, the iPad, is a huge advantage over every tablet, and gives it wiggle room with price. So what I’d be more interested in isn’t whether a significant percentage of people would buy a more expensive iPad made in the USA with an identical overseas version available cheaper (they wouldn’t). It’s whether they’d continue buying an iPad if the *only* option was a more expensive, made-in-the-USA version. I think the answer there is a resounding “yes”. And that’s why the experiment you and Wired are advocating is slightly flawed. Because the question isn’t necessarily whether people would pay more for a product given a identically cheaper option. It’s whether they’d pay more if there *was no* cheaper option.

        And another point here — The fact that Apple engages in the practices they do is slightly puzzling to me on the premise that people seem enamored with buying Apple products at nearly any price point. So why not just raise the price tag and produce everything more ethically? After all, a huge part of their marketing draw is that they don’t skimp on quality or principle in the slightest. So why not extend that to the way the products are manufactured? Either Apple is just missing the boat on this one, or Apple has already determined that of all the things Americans care about, how their products are manufactured are at the bottom of the totem pole, and it’s the one area they can squeeze crazy profit out of. My bet’s on the latter.

        • Adam McFarland says:

          It’s whether they’d continue buying an iPad if the *only* option was a more expensive, made-in-the-USA version. I think the answer there is a resounding “yes”.

          Definitely agree with you there, for all the reasons you listed. Apples practices sometimes are equally as puzzling to me…although I suspect you’re right for their reasoning. The positive press for the iPad 2 outweighed this negative press 10000:1 even in the tech community.

  2. According to Wikipedia, the overall suicide rate for China in 2008 (most recent data) was 6.6 per 100,000 people. This means the extrapolated rate would be 66 suicides per 1,000,000 per year. This means that a rate 17 workers over five years is significantly lower than the nationwide, yearly rate.

    Now from the article it sounds like they are only counting those suicides that happened in or on the actual buildings owned by the Foxconn company. So we may not really know what the total rate of suicide is to compare with the statistics above.

    Then there is also some sort of causation/correlation analysis that would have to be performed. Has the suicide rate in China increased more significantly in the last 20 years versus countries that large scale manufacturing hasn’t moved to? Is the suicide rate as high as it is (relatively low compared to most western countries) because of the oppression of industry?

    The article certainly brings up valid points, but I think it is largely being dramatized because of the suicide nets. Perhaps the height of the building just provided an excellent method for those that would have committed suicide anyway. If I owned the building, I would put up nets too because I certainly wouldn’t want to contribute to these statistics. But, ominous looking suicide nets don’t necessarily mean that things are as bad as they are portrayed in the article either.

    Just my inner skeptic trying to add perspective…

    • Anthony says:

      I agree, Brad. The skeptic in me certainly finds it hard to believe that the conditions surrounding producing an iPad are dramatically worse than the conditions surround nearly any other type of manual, industrial labor. But let’s assume for argument’s sake that they are worse. Is the answer to simply move to the US? Probably not.

      I think what should be scrutinized is not *where* iPads are being produced, but *why* the suicide rate is what it is. Simply moving a facility does not fix a problem; it just moves the problem to a different geographic location. The only way to fix the problem is to understand the root cause, and if the root cause is something Foxconn can even fix (vs. being something that’s deep-rooted in Chinese culture in the first place), then they can go about fixing it.

  3. Diane Miller says:

    If I saw two iPads where one was priced $599 and said it was made in the United States, and another that was priced $499 and said it was made in China; then I would assume that they are actually both made in China and that person selling the higher priced one was lying to try to make more money. Unfortunately, advertisers can get away with that.

  4. Bernadette says:

    “And another point here — The fact that Apple engages in the practices they do is slightly puzzling to me on the premise that people seem enamored with buying Apple products at nearly any price point. So why not just raise the price tag and produce everything more ethically? After all, a huge part of their marketing draw is that they don’t skimp on quality or principle in the slightest. So why not extend that to the way the products are manufactured? Either Apple is just missing the boat on this one, or Apple has already determined that of all the things Americans care about, how their products are manufactured are at the bottom of the totem pole, and it’s the one area they can squeeze crazy profit out of. My bet’s on the latter.”

    This above paragraph is the crux of the matter for me. And as a footnote: crazy profit=greed. The quality we insist we must have in our products and the effort of ensuring that quality– in the long run is a self defeating effort that won’t and cannot last–in a society that does not adhere to the same principle in regard to the humanity populating it.

  5. Anthony says:

    Steve Jobs told Obama in 2010: ‘You’re headed for a one-term presidency’
    Jobs was critical of the Obama administration for not being business-friendly…
    http://www.wtam.com/cc-common/news/sections/newsarticle.html?feed=104668&article=9287293

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