Apple in China: Shades of the 19th century?

I love Apple products, and am fascinated by the near-mythical company behind them.  So for personal as well as professional reasons, I was eager to read the New York Times' front-page story Sunday by Charles Duhigg and Keith Bradsher: How the U.S. Lost Out on iPhone Work.

A dozen paragraphs in, I was stopped - and astounded - by this:

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

The ex-Apple exec went on to describe the plant's "speed and flexibility" as breathtaking. But something else took my breath away: imagining what it would be like to work at that plant. I'm not the only person who thought those paragraphs described something close to slavery. (Another is Yves Smith (a.k.a. Susan Webber of Aurora Advisors Inc) in the Naked Capitalism blog, where she also points out that this turn-on-a-dime mentality makes great theater but poor management.)

If the Times' description is accurate - it comes from an unidentified former Apple executive, and was partly disputed later in the article by Foxconn, the contractor - what does it say about the state of labor in China, and the prospects for countries whose workers have more rights to ever recapture jobs?  I put those questions to Lonnie Golden, professor of economics and labor studies at Penn State's Abington campus.

Golden resists using the "s" word but says the Times described something that's "very close to forced labor."  Above all, he says, it harks back to the working conditions that existed for some Americans in the 19th century, before Progressive Era reforms such as wage-and-hour laws and limits on forced overtime in collective-bargaining contracts. "It’s foreign to our workers from the 20th century onward. It wouldn't be foreign to a lot of our workers from the 19th century," he says.

Even today, overtime can be required of most American workers, outside tightly regulated sectors such as health care and transportation, Golden says. And stagnant or declining wages often mean that workers welcome the extra hours, though some may say. "'Yes, I want to work overtime, but not this week,'" he says. A key protection comes from the law requiring time-and-a-half overtime pay for hourly workers, which at least assigns a cost to working your employees to the bone.

Like other labor economists, Golden says the race to the bottom is a basic fact of globalization.  "If workers object to being on call like that, the company can move its operations to some remote part of China, or to Thailand," Golden says. "There’s always some part of the world where that kind of work may be better than working on a farm."

China's leaders have made a bargain with their massive population that has worked efficiently since the brutal 1989 crackdown on protests in Tiananmen Square:  Its people won a semblance of economic freedom and opportunity, but without key political freedoms and worker protections to accompany them.

Did every single one of those workers take their biscuit and tea and go willingly to work that night in 2007, so that Apple could quickly redesign the iPhone? Or are they the 21st-century version of wage slaves?

Apple declined to talk to the Times, as did Foxconn regarding specific clients. But the Times did quote this Foxconn response:

"Any worker recruited by our firm is covered by a clear contract outlining terms and conditions and by Chinese government law that protects their rights,” the company wrote. Foxconn “takes our responsibility to our employees very seriously and we work hard to give our more than one million employees a safe and positive environment.”

The company disputed some details of the former Apple executive’s account, and wrote that a midnight shift, such as the one described, was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours’ notice of any schedule changes.

Until something significant changes in China - or perhaps at the many U.S. companies that also benefit from this grand bargain - it will remain hard to get clear answers. But there's good reason to keep asking.