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Apple Hoards Cash Offshore; Makes Products Abroad in Abusive Conditions

Stash That International Cash, Baby! (Photo: blatant world, flickr)

Stash That International Cash, Baby! (Photo: blatant world, flickr)

Go to any gathering, and you’ll find nearly every person carrying an iPhone or an iPad, despite the Apple Computer’s dismal record on labor practices. Apple executives must be laughing all the way to the bank — their Swiss bank, that is.

In its fourth quarter earnings report released last week, Apple Computer revealed that 2/3 of its on-hand cash — some $54 billion — is squirreled away outside the boundaries of the United States, presumably to avoid paying its fair share of taxes. In the meantime, reports Students and Scholars Against Corporate Misbehavior (SACOM), a Hong Kong-based group, Apple’s major manufacturing contractors routinely subject employees to forced overtime, wage theft and no breaks — and even unprotected exposure to toxins.

Apple, together with rival tech firm Google, has been lobbying for a “tax holiday” that would allow them to bring some of those billions into the U.S. at a lower tax rate, promising that to do so would create jobs. But, as we reported, a similar measure tried in 2004 created few jobs, and instead rewarded companies that had kept their money overseas. Where Apple has created jobs is in China, where the workers who make its slick products are made to work in deplorable conditions.

A new SACOM report, “The iSlave Behind the iPhone: Foxconn Workers in Central China,” examines conditions at the Apple Computer contractor’s plant since the suicides of nine workers last year made big news. One thing that has changed: workers were given a raise — to all of $1.18 an hour. But workers are often shorted overtime pay, SACOM reports, and Foxconn even illegally withheld, during the Chinese New Year, payment for overtime already worked in order to prevent workers from taking the traditional holiday to visit their families.

Most workers in these factories are migrants; the corporations deliberately build facilities in lower-populated areas where wages are lower. Not that labor costs account for much of the cost of an Apple product. According to Sophia Cheng, writing at the SACOM Web site:

Take the iPad, for example, which is the sole item produced at Foxconn’s 100,000-worker factory in Chengdu. Industry analyst iSuppli estimates that Apple spends only $9 on labor for every $499 iPad.

In SACOM’s latest report — whose release was timed to coincide with the opening of the first Apple Store in opulent Hong Kong — workers complain of deplorable dormitory conditions, where access to electricity and water is routinely cut, and of the exploitative fees they are made to pay to Foxconn for their room and board.

Workers say they are also made to stand for 10 hours at a time without taking breaks, and subjected to abusive behavior by supervisors, including being made to sign confessional letters when accused of making a mistake or infraction. In China, labor unions are run by the state, so when workers act on their own to strike, as they did at United Win, another Apple contractor, in 2010, they risk legal sanction.

Download the full report, “The iSlave Behind the iPhone: Foxconn Workers in Central China,” here in a PDF file.

This is a crosspost from AFL-CIO Now.

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Adele M. Stan

Adele M. Stan