Apple Inc: Outsourcing Of Manufacturing To China

FINAL INDIVIDUAL PAPER Name: Institution: Course Code: Date: Literature Review According to (Duhigg & Bradsher, 2012), ‘the nation has stopped training enough people in the mid-level skills that factories need.’ The labor pool in the United States is relatively more skilled than in most east Pacific countries. Thus, the cost of labor in the US is higher relative to Chinese labor pool. Compelling Apple to assemble its products on American soil will significantly increase their productions costs which are transferred to the consumers through setting their prices higher. Chinese workers are cheaper and have the skills necessary to deliver quality products to the American tech giant, Apple. Their salary is unsustainable in the United States. In economics, a company has to minimize its cost of production to maximize its profit. Apple’s decision to outsource manufacturing labor in Asian Pacific countries is in line with this principle. According to (Kraemer, Linden, & Dedrick, 2011), ‘bringing high-volume electronics assembly back to the U.S. is not the path to “good jobs” or economic growth.’ Pegging hope to solve unemployment issues in the US by compelling Apple to assemble its products in the United States is impractical. The number of jobs it can bring are also limited and to replicate Chinese working conditions in the United States will attract numerous labor-related lawsuits according to labor laws in the US. Simply moving the manufacturing jobs back to the United States does not solve the unemployment problem. The company will have to grapple with higher wages and costlier supply chain to get the raw materials for the assembly of its devices. Apple will also lose the symbiotic relationship manufacturing companies have in China and the shorter supply chain of materials for assembly. Additionally, most Americans are not even interested in the manufacturing jobs since their expertise allows them to work on another level where they can earn more. To move the manufacturing jobs back to the United States either the American workers agree to the working terms of Chinese labor market or the company to agree to possibly make losses and employ workers on American labor terms. All these scenarios are impractical, and therefore Apple will have to continue outsourcing labor from China to assemble its devices. Critical Analysis Apple Inc. Has been outsourcing its manufacturing to China and the company has claimed that the price of their products would be more expensive if they based their manufacturing in America. To ensure competitive prices in the market, the company has to ensure per unit cost of one product is as low as possible. The market forces determine the ideal location and production cost of each unit and Apple settled for China. In its early years, the company assembled its products in America but slowly turned East due to the availability of cheap semi-skilled labor. Politicizing company policies and compelling them to move jobs to their home country is not a sustainable strategy to solve unemployment. The current president of the United States pegged his campaign on making companies to move jobs they have outsourced overseas back to the United States. It is far from the reality because these companies hav...