How the U.S. Lost Out on iPhone Work

**Shek** · 05 Feb 12,, 01:54

When evaluating "profits," keep in mind that they are really talking about revenues. Start stripping away from that 58% R&D, payroll, marketing, etc.

**JAD_333** · 05 Feb 12,, 06:22

Originally Posted by Shek

When evaluating "profits," keep in mind that they are really talking about revenues. Start stripping away from that 58% R&D, payroll, marketing, etc.

I've made that point ad nauseum.

**JAD_333** · 05 Feb 12,, 06:24

Originally Posted by citanon

I'm trying to figure out whether current labor market conditions in China are sustainable, and for how long, and by corollary what their economy will look like moving forward, and where they will be trying to go. "Ought" has nothing really to do with it. However, I think "need" is most important. What do they need, and are they getting it now? Have they already moved past the point where "need" is going unfulfilled, and if so what kind of moves should we expect from the Chinese government, industry and society in the next few years?

I think it's safe to say that if workers are earning less than a subsistence wage, something will have to give. They'll strike, or move on to better paying jobs if they are available. I don't see how it's good for China's goal of building up a domestic market to have workers (consumers) not earning some disposable income.

I can't agree or disagree with you that Chinese factory workers are already at the point where their needs are being unfulfilled. They complain when interviewed, but then workers everywhere complain. Maybe you could take a different tack. Try finding out what it really costs to live for a factory worker and compare that to their take-home pay.

I'm trying to figure out if that 1.8% figure in the first chart is accurate. Not many other sources to compare against.

You have to know how many units each worker assembles every day. You need to know daily production rate and divide it by the number of workers... We just don't know all the variables.

I had a factory experience while in school. It was piece work. There were 3 of us making wire candle holders and we each made $10 per 100. The factory sold them for about $2 each wholesale. So, I know its labor cost was 15% of the item. I don't know what the full cost was, but I'd say at least 50% of the wholesale price. That would give them a gross return of 100%.

**Doktor** · 05 Feb 12,, 09:38

You can make reverse calculation if that 1,8% is accurate.

IPhone costs $300 in the shop. Someone above mentioned Apple sells it for $188 wholesale price which makes sense.

$188 * 1,8% = $3.384

Assuming daily wage of the Chinese worker is $17, makes one worker in average producing 5 phones/day.

Last year Apple sold 72mn units, with 5 units per day per worker it makes 14,400,000 working days.

Assuming Chinese worked 300 days/year it needed 48,000 workers to enter the factory each day.

Foxconn had 92,000 workers in 2010.

You draw the conclusion if 1,8% is right.

**JAD_333** · 05 Feb 12,, 19:26

This was 2 years ago. If still true it contradicts the idea that Chinese factory workers are not earning disposable income.

China's rural boom Houses with plumbing, electricity, balconies and even Greek columns are rising from China's rice paddies, built with money saved by villagers who worked in coastal factories making Nike sneakers, Columbia Sportswear apparel and other products. Anti-sweatshop activists long criticized Nike and other brands for exploiting workers in dead-end factory jobs. But China's expanding economy has raised wages, improved working conditions and provided more choices for workers, enabling the rural boom.

Chinese factory workers cash in sweat for prosperity | OregonLive.com

Off topic and 7 yrs old, but I couldn't resist. I agree with this guy.

Chinese Factory Worker Can't Believe The Shit He Makes For Americans

Chinese Factory Worker Can't Believe The Shit He Makes For Americans | The Onion - America's Finest News Source

**Doktor** · 05 Feb 12,, 19:32

Originally Posted by JAD_333

Off topic and 7 yrs old, but I couldn't resist. I agree with this guy.

Add the Europeans to the list, too

**Parihaka** · 05 Feb 12,, 20:11

All I know is because my latest Mac is bespoke I ordered it through Shanghai. Within 6 hours of my order being placed it was checked through Shanghai airport, sat for three days in Australian customs then was in my hot little hands within 5 hours of touching down in Auckland. Global economies rock, Australian customs suck and the quality of supposedly oppressed workers is top notch. Somehow I doubt their quality and efficiency would be as good as it is unless the workers had personal investment in their product, a willingness to do their very best. From personal experience quality is a rare commodity when employees are dissatisfied.

**bigross86** · 05 Feb 12,, 20:38

The only problem with that entire scenario, of course, is that you ordered a Mac...

**Doktor** · 05 Feb 12,, 20:39

Like Dell or HP would have been a better option

**Parihaka** · 05 Feb 12,, 21:02

Sorry but a windows based system simply cannot do what I require. For what I need, a windows OS is a model T compared to a DB9. Nothing wrong with them for home use though....

**Doktor** · 05 Feb 12,, 21:04

Originally Posted by Parihaka

Sorry but a windows based system simply cannot do what I require. For what I need, a windows OS is a model T compared to a DB9. Nothing wrong with them for home use though....

You are talking to a guy who needs nothing but Word and Internet

**Parihaka** · 05 Feb 12,, 21:11

Originally Posted by Doktor

You are talking to a guy who needs nothing but Word and Internet

I know

**RollingWave** · 06 Feb 12,, 02:53

Originally Posted by omon

you mean you know better what they should do with their life??

wheather their desision is right or wrong, time will tell, but no one has more right to deside that but them.

Oh I agree that I don't know better either, but then again, neither do their folks, or themself in most case at that point in their life. There must be some better middle ground out there then just say let them pick whatever they want to do... including not going to school after 15 (or even earlier ) and start working etc. Not to meantion there is legitimate issue of demand and supply, if everyone wants to be a doctor we'd also have some serious issue for example.

**Skywatcher** · 06 Feb 12,, 04:00

Originally Posted by RollingWave

Oh I agree that I don't know better either, but then again, neither do their folks, or themself in most case at that point in their life. There must be some better middle ground out there then just say let them pick whatever they want to do... including not going to school after 15 (or even earlier ) and start working etc. Not to meantion there is legitimate issue of demand and supply, if everyone wants to be a doctor we'd also have some serious issue for example.

The Taiwanese obsession of pushing everyone (or at least a lot of people) into professions like medicine and engineering may be way a lot of wages are stagnant there (though I'm drawing off of personal experience and anecdotal evidence, so I could be very wrong).

**RollingWave** · 06 Feb 12,, 09:36

Originally Posted by Skywatcher

The Taiwanese obsession of pushing everyone (or at least a lot of people) into professions like medicine and engineering may be way a lot of wages are stagnant there (though I'm drawing off of personal experience and anecdotal evidence, so I could be very wrong).

That is a mostly correct observation, right now bus drivers make more than about 70-80% of the college grads under 30. and probably a very significant percentage of post-graduate grads as well. part of that is the boom of demand due to an explosive growth in tourism lately, but another part is the underlying problem that there's simply not enough supply of folks willing to drive trucks and buses, despite the fact that it's paying pretty well. and working condition is hardly worse then working for a lot of high tech industries.

For example, substitute teachers are paid like crap, but many lineup to do that, hoping one day to become official teachers (but has a pretty low ration and a ton of competitors).

The rather ironic part (or at least saving grace I guess) is that folks here are usually willing to work for REALLY shitty pay as long as it's in something they deem white collared, so unemployement is still pretty low, but the inefficency of the entire employement structure is pretty damn obvious. No one wants to be a maid / house work helper anymore, despite some folks willing to pay very high wages for any competent worker (inside we important many from SE Asia to do that line of work, where often there are all sorts of cultural and language conflicts).