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Tuesday, January 24, 2012

Millions of iPhones and not many job opportunities for U.S. workers

I was reading an interesting article the other day about American technology and how it has NOT translated into American jobs.

President Obama asked Steven Jobs what would it take to make iPhones in the United States?  In a nutshell, Jobs informed the President that that wasn’t going to happen.  And the thing that really surprised me was that the central issue wasn’t cheap labor.  Rather, it’s the ability of overseas factories to ramp up at a moment’s notice, provide the sort of flexibility, attention to detail and skill level that is unheard of in America.

According to this article Apple earned over $400,000 in profits per employee last year. Back in the day, when American companies were in their heyday they traditionally hired tons of U.S. workers. That doesn’t seem to be the case these days. Profits and efficiency are top patriotism and loyalty to the homeland.

This story explains why the U.S. economy (and its’ corporations) can grow and enjoy huge profits without any substantive gains in employment.

Some of these factories house thousands of workers inside company’s dormitories.  They can get them up in the middle of the night and work them around the clock in 12-hour shifts.

How can the U.S. compete with that?           

Not that long ago, Apple products were made in America. Today, not so much.

Just imagine, 70 million iPods, 30 million iPads and 59 million other Apple products that are being manufactured overseas instead of in the U.S.A.

What happened?

For starters, innovation, leadership and a massive technologically skilled workforce.

Apparently, the cost of labor isn’t a major stumbling block.  The cost of labor is actually dwarfed when compared with the cost of buying parts and managing supply chains from hundreds of companies.  One company, Foxconn Technology, has many facilities in Asia, Eastern Europe, Mexico and Brazil.  It assembles approximately 40% of the world’s consumer electronics. 

Are you beginning to see a pattern here? Products manufactured abroad but sold in massive quantities in the good ol’ U.S. of A.

Has the manufacturing industry here completely missed the boat or is this just an unavoidable turn of events? After all, every empire has its’ rise and fall.

If we can’t compete in America what does this mean for our middle class employment options?

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