Apple manufacturing jobs are not coming back and that's OK
These days, everyone wants to invoke Apple to score some political points—and for good reason.
Apple has become the standard bearer for American-style capitalism, becoming the most valuable company of all time. The iPhone has become the symbol of America’s dominance as an innovator. And the late Steve Jobs has become a true legend: a college-school dropout who started a company in his parents’ garage and became one of history’s greatest CEOs.
But the political discourse around Apple is about more than celebrating a great American company. Apple has become a microcosm, a roadmap for competing in the new global economy where skilled workers, entrepreneurs and innovators can prosper, but unskilled American labor faces tough times ahead.
Apple rose to lofty heights during the worst economic climate since the Great Depression and has become a beacon of hope and recovery. It’s no wonder President Barrack Obama and Governor Mitt Romney mention Apple at nearly every major event as they vie for the presidency.
August 27, 2012: Republican National Convention: Governor Romney pointed to Steve Jobs as a heroic risk taker who achieves the big payoff: “Business and growing jobs is about taking risk, sometimes failing, sometimes succeeding, but always striving… It is about dreams. Usually, it doesn’t work out exactly as you might have imagined. Steve Jobs was fired at Apple and then he came back and changed the world.”
September 6, 2012: Democratic National Convention: President Obama cited Steve Jobs as someone who embodies the American Dream: “We believe the little girl who’s offered an escape from poverty by a great teacher or a grant for college could become the next Steve Jobs or the scientist who cures cancer or the President of the United States, and it is in our power to give her that chance.”
All the Apple cheering, though, took a more serious tone this week during the second Presidential debate, raising important questions about America’s future.
October 16, 2012: Second Presidential Debate: Moderator Candy Crowley asked: “iPad, the Macs, the iPhones, they are all manufactured in China. One of the major reasons is labor is so much cheaper [there]. How do you convince a great American company to bring that manufacturing back here?”
Governor Romney responded: “The answer is very straightforward. We can compete with anyone in the world as long as the playing field is level. China’s been cheating over the years. One by holding down the value of their currency. Number two, by stealing our intellectual property; our designs, our patents our technology.”
President Obama responded: “Candy, there are some jobs that are not going to come back. Because they are low wage, low skill jobs. I want high wage, high skill jobs. That’s why we have to emphasize manufacturing. That’s why we have to invest in advanced manufacturing. That’s why we’ve got to make sure that we’ve got the best science and research in the world.”
It’s true that Apple and virtually every other tech gadget maker sends manufacturing to China, where Chinese laborers are paid very little to put iPhones and iPads together. Saturday Night Live did a funny skit recently on this.
It seems Governor Romney’s call to pressure China would be part of a larger plan to take away the financial incentive for U.S. companies to outsource manufacturing overseas, thus hopefully bringing back manufacturing jobs. President Obama, on the other hand, doesn’t even want those jobs back.
What’s missing is the other side of the Apple equation: The iPhone and iPad, along with the iOS app and hardware peripheral ecosystems, have spawned many high-paying jobs for skilled workers.
In a landmark study, researchers at the University of California, Berkeley, found that Apple keeps most of its high-wage functions, such as product design, software development and product management in the U.S. All tallied, Chinese workers add $10 or less to the value of an iPad compared to American workers who add $160 worth of value.
“In America, when we talk about manufacturing, we should be talking about advanced manufacturing jobs for highly skilled workers that require a solid education and pay wages on which you can support a family,” writes Arik Hesseldahl at AllThingsD. “And the fact is, there’s a lot of American work that goes into an iPad or an iPhone or a Mac.”
Too much has been made about Chinese workers who work on only the final stage of a complex product. Apple is an American icon because it creates jobs for highly-skilled Americans and showcases American ingenuity to the world, as well as makes a boatload of money.
Whether or not there are enough high-skilled jobs to go around or highly skilled Americans to do them is another issue, but one thing is certain: Apple has laid down the blueprint for the next-generation economy in America, and low-skill assembly jobs are not part of the equation.