One of the many reasons I like local-boy-made-good Chris Hayes, and am glad that he’s on TV:
Mike Daisey is, of all things, a professional monologuist. A former Silicon Alley employee and Apple fanboy—and still enough of a serious user that he’s been blogging at length about problems with OSX Lion—Daisey’s most recent monologue is The Agony and Ecstasy of Steve Jobs; Daisey’s obsession with the company’s elegantly manufactured products led him to China, where he interviewed employees of the massive manufacturing subcontractor Foxconn, and developed a piece around his experience. He’s a very interesting choice for a guest in the wake of Steve Jobs’s resignation as Apple CEO.
It’s worth noting one thing that Daisey’s clear on: Apple isn’t the only company to use questionable labor practices, nor is it anywhere near alone in using Foxconn’s services (HP, Dell, Nokia, etc). They tend to be a target, however, not just because of their tremendous profits and immense, passionate fan base, but because manufacturing is such a significant part of their products’ appeal.
It’s also interesting to hear Daisey’s thoughts in the context of recent developments in Chinese manufacturing, which I went on at some length about yesterday. The price of labor in China is actually on a substantial rise, and combined with the stagnation of American wages, Boston Consulting Group is predicting the competitive wage advantage China has will disappear in short order:
"With Chinese wages rising at about 17% per year and the value of the Yuan continuing to increase, the gap between US and Chinese wages is narrowing rapidly," BCG says. "Meanwhile, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina, and Alabama—increasingly competitive as low-cost bases for supplying the US market."
The Institute for Southern Studies cites many other reasons the U.S. may become more competitive besides a narrowing wage gap: energy costs and the decline of the dollar.
And none other than former Intel head Andy Grove is calling for a rethinking of the belief that offshoring manufacturing is fine as long as the management stays here—not just because of high unemployment, but because the loss of manufacturing represents a loss of information:
A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies did not participate in the first phase and consequently were not in the running for all that followed. I doubt they will ever catch up.
Meanwhile, Foxconn is already doing what so many American and Japanese companies did to reduce labor costs: building robots.
Photograph: Yukana Tsutano (CC by 2.0)