How the U.S. Lost Out on iPhone Work

    

     I currently read an article from the NY Times titled "How the U.S. Lost Out on iPhone Work." In the article, the author discussed the reasons as to why majority of the jobs in Apple are now overseas. He mentions a conversation between President Obama and Steve Jobs about bringing those jobs back to the U.S., in which Jobs replies simply "Those jobs aren't coming back." The flexibility, diligence and industrial skills of American workers have been outpaced by foreign workers, based on the opinion of Apple executives. Apple employs 43,000 people in the U.S. and 20,000 overseas. However, Apple's contractors hire 700,000 people to engineer, build and assemble iPads, iPhones and other products by Apple; almost none of these jobs are within the country. Jared Bernstein, the former economic adviser of the White House, stated "Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now." Bernstein also stated "If it’s the pinnacle of capitalism, we should be worried."

     It is ironic that the President interrupted Jobs to ask the question he did because our country is losing many potential jobs to oversea competitors during modern times. Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Also, it earned over $400,000 in profit per employee last year, which was more than Goldman Sachs, Exxon Mobil or Google. At Apple there are so many jobs and potential profits that are given away by the U.S. that the opportunity cost of giving them away is high for us. Bringing back some of those 700,000 jobs would help our country greatly in these harsh economic times.

     While the opportunity cost of shipping Apple manufacturing jobs overseas is high and we lose potential profits, Americans do not have the relative advantage in this industry. Many of the current manufacturing plants for Apple are now in Europe, Asia and other places across the globe. Their they work in vast numbers and work longer hours than most Americans could "legally" work. Also, they have many people with the necessary skills for this type of labor. Based on the article "Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.” In conclusion, the foreign countries are now relatively sufficient in the manufacturing industry compared to the U.S. Therefore, those jobs should be kept overseas where the profits and production levels will be at their highest to satisfy the large world demand for Apple products.

Source: http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html