The White House is insisting that Donald Trump’s vision of Apple’s flagship iPhones being manufactured in the US will come to fruition, despite assertions from analysts and the company itself that it would not be possible.
The press secretary, Karoline Leavitt, told reporters during Tuesday’s briefing that the president believed Apple’s recently announced $500bn investment, as well as increasing import costs sparked by his trade tariffs, would encourage the company to ramp up manufacturing in the US.
“He believes we have the labor, we have the workforce, we have the resources to do it. If Apple didn’t think the US could do it, they probably wouldn’t have put up that big chunk of change,” she said.
dont know where people are getting the idea that this would make the iphone outrageously more expensive. iphones are already pretty much the phone with the highest profit margin, 54% on the iphone 14max. adding to that, the pay for the average foxconn worker in china isnt as low compared to the minimum wage in most us states as one might imagine, with around 2.80$ compared to 7.25$ minimum wage. its pretty bad, but they arent paid cents per hour. lastly, labor isnt exactly whats expensive about the iphone anyway.
looking at all these numbers, it seems entirely plausible for apple to manufacture iphones in the us while barely raising the price.
besides that, these comments also come off as a defense of sweatshop work. im sure thats not the intent, but you gotta ask yourself what it sounds like when you mock the idea of work being done by (more) reasonably paid people, because it would make your already overpriced toy more expensive. i get that dunking on trump is fun, but this a really weird angle.
You raise good points, but even if Apple was able to take some hit on the profit margin, and was able to find cheap-ish labor in the US (minimum wage likely higher than $7.25/hr though), the biggest issue in my opinion is that all the component the iPhone is made of are still imported and affected by tariffs, and making them in the US might be outright impossible for some, based on current manufacturing capabilities, or very expensive for the ones that can be made in US.
Last I saw it was reported around 17 hours per phone on labor. They won’t get away with less than $20/hr plus benefits here. So that’s around $22.50/hr. ~$380 of labor per phone just on construction. Every individual part/material will have to pay a tariff coming into the country as well unless you are going to make those here as well at the higher costs. 100% of their profit margins would be eaten up. So there are 2 options, raise the price by 50% to keep their profits, or exploit cheap labor elsewhere. They made their choice to move to India previously and India faces a 27% tariff. They keep their profits higher and prices lower by not moving manufacturing of the phone here.
Even then, they moved some of their iPhone operations to India, and they had to scale back plans because the Indian workforce doesn’t have the skills needed to perform the work, and getting a made in India iPhone is pretty much a marker of getting a lemon. Significantly lower quality control, significantly higher tolerance for defects.
I’m not sure how much of their profit margin Apple would give up. It depends on how much phone sales slow down when prices go up. Is the cell phone market elastic or inelastic?
The labor is 2.5x more expensive than minimum wage. Do you think Apple will have minimum wage workers doing relatively skilled labor like soldering and assembling electronics? I’ll likely be more in the $15-$20/hour range before even looking at benefits. I don’t know how many person hours go into assembling a phone, but it’s not just a few. That alone would probably add a few hundred to every phone.
Like you said, the most expensive portion is not the labor, it’s the parts that are mostly sourced from China and Taiwan… which have huge tariffs in the scenario Trump is talking about.
Regarding the labor costs, consider that you can go work in an Amazon warehouse and make ~$22 an hour for essentially unskilled labor.
Maybe working on an American Foxconn plant would be more desirable (I have my doubts) but I still couldn’t see the labor cost being less than $25/hr at a bare minimum
You mean children. There are already children working in meat packing plants, also in automotive assembly, and elsewhere. We only hear about the companies that got caught and paid the little fine to go back to doing it.
America’s future to do the jobs that left long ago will be to have children, prisoners, any of the downtrodden handling the manufacture. Similar to how crop harvesting will be handled in the more-near future as all the immigrants are sent away to a hole. Labor shortage? Well, a new random crime just surfaced to resupply the work camps. Perhaps people with “gang” tattoos.
If it were to happen, it’s not going to be some magic utopia with Joe High School grad walking into the assembly plant post-WWII and buying 2 houses, a boat, and providing for a family of four. It will be just as bad as China, or worse, and “at home.” America’s Golden Shower Age isn’t coming back.
No matter who makes it, it’s still going to suck for them, until these processes are fully automated and no human is making them.
Is any of it right? No. Can we solve it? Sure, stop buying iPhones, stop being a consumer, buy the bare minimum, stop buying into retail culture. Vote people into office that care about fair labor practices across the country. There are shitty jobs that pay handsomely, oil rig work, industrial fishing, people make a lot of money doing very life-threatening work. It is completely possible these jobs could exist and pay well, but the consumer masses will balk at the cost.
More so, in the lens of right now, not gonna happen. America will be lucky to be a Democracy in a year’s time.
Yeah this whole defending cheap foreign labor thing feels kind of weird to me. I might just be showing my ignorance here, but isn’t the end-game for globalization about raising living standards around the world? By trading with developing countries, the investment develops their middle class and eventually their wages should catch up with ours.
It feels weird to see people saying that so much of the American economy is suddenly unviable when we have to pay livable wages. If that’s the case, that’s a bad thing, and it should change. Not that I think these tariffs are the solution.
As I understand it, these sweatshop jobs do resist the standard of living in the areas they are in. The people there don’t have the option to work a job that we would consider good. They work the job we consider terrible, and they get paid more than they would doing other jobs.
To make a moral judgement, we must balance between “terrible working conditions, no protections, maximum wealth extraction,” on the one hand, and “no infrastructure, no job, no money” on the other. Sadly, there is no profit in making the world better for everyone.