Apple Ends (Sort Of) Ends Indentured Servitude — In 2015

It is the 21st century, and the world’s most valuable company has finally ended a practice akin to slavery, up to a point. As the Washington Post reported:

The process works like this: Employment agencies recruit workers. They then charge them placement fees for jobs, often in foreign countries. Those fees end up putting workers in debt to the agency. If that wasn’t bad enough, according to Apple’s own audits, some agencies held the passports of bonded workers in safes until their debts were paid off.

That’s right, no passports. That probably means no form of identification, and it certainly means that they can’t go home.

It’s pretty close to what some might call indentured servitude. And that’s what Apple — the tech company that has taken a lot of heat and also offers the most information about its factory conditions — has only just stopped. (It did previously ban factories from using employment agencies that charged more than a month’s wages in fees.)

This is where we are in 2015.

And before any back-patting commences, it’s worth noting that even this step is just a small one, said Scott Nova of the Economic Policy Institute, who co-authored a paper raising questions about Apple’s auditing process. Nova noted that the policy only applies to those who travel across borders to work at Apple supplier factories —  not to the Chinese workers at Chinese suppliers, many of whom also use recruiting agencies.

As the article notes, Apple is hardly unique in this and other abusive practices, as labor exploitation is pretty much the norm among tech company (and for that matter in just about every industry). Even if this one company policy was fully eradicated, many other problems remain:

While Apple has made inroads in some areas, it actually saw compliance with overtime rules fall from the previous year. Last year, 92 percent of workers of factories that the company audited kept to a 60-hour work week, a decline from 2013 when it was 95 percent. That’s not nearly as bad as levels in 2007, when it was roughly 70 or 80 percent, but it is a dip. Not to mention the 60-hour work week, which many of us would balk at, is also 10 hours more than China’s poorly-enforced law limiting the work week to 50 hours. (Technically, Apples contracts with companies such as Foxconn to manufacture its electronics and does not directly employ those workers).

Recall that most of this data come from self-reporting on Apple’s part: the picture would no doubt be just as grim among every other major manufacturer in the world. When this sort of thing is so normal and acceptable that a minor tweak in policy is considered a new-worthy step, something is certainly amiss. Consider this proposed solution to speeding up reform:

So what could Apple, or any tech company, do to speed things up? Nova suggests a model recently struck with garment workers in Bangladesh, following the horrific factory fires in 2012. In that country, he said, 200 brands and retailers fashioned an agreement with groups that directly represent workers. The deal calls for independent audits of factory conditions and promises by the retailers to put up the money to renovate dangerous facilities.

That will cost money, of course, which would eat into the relatively high profit margins that tech companies — and Apple in particular — enjoy. Improving worker conditions would also likely mean that consumers would have to be okay with slower delivery rates, Nova said. Getting swamped with orders for the new iPhone 6 and iPhone 6 Plus, for example, could have been a reason that Apple’s overtime hours went up this past year.

Currently valued at over $700 billion — larger than most countries’ GDP — Apple’s total revenue for 2014 was $182 billion. Taiwan-based supplier Foxconn, the world’s largest electronics contractor, ended 2013 with total revenue of $131.8 billion (data for 2014 remain unavailable). I am pretty sure that a mere fraction of either company’s revenue would be enough to give workers descent treatment and pay.

I will never understand how highly profitable companies — whose executives and shareholders enjoy billions in compensation and dividends, respectively — can claim that customers must pay more in exchange for treating workers like human beings. The average corporate investor or upper manager could still remain fabulously wealthy — if heaven forbid slightly less so — while giving consumers and producers alike a better and more ethical deal.

Even if consumers should pay — and lets grant that in some cases — most of the time it will cost no more than a few cents or dollars per item, a literally small price to pay for our fellow humans to live better lives. (This applies as much to major domestic employers like Walmart and McDonalds as it does to manufacturers with global supply chains.)

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