Apple:
The relationship between unemployment rates and outsourcing
By: Casey R. Miller
Apple Inc. is an
American company that creates and sells electronic devices. Apple is famous for
their various MP3 player products like the iPod, iPhone, iPad and iPod shuffle.
In the computer market, Apple is known for their best selling computer, the Mac.
When Apple Inc. comes out with a new product, the company puts out a limited
supply of the gadget in order to keep the demand for the products high. This
acts as a way for people to buy the device not only as soon as it is released,
but also so the customer will purchase it at a high price that would still seem
reasonable. The loyalty that Apple has with their customers is endless.
But Apple Inc. has
been going through some criticism lately due to their decision to outsource the
product to have cheaper wages. In Samuelson, P. A., & Nordhaus, W. D. (2010)
outsourcing is defined as “locating services or production processes abroad”
(p. 344). With the outsourcing component in Apple’s business plan, one would
think that the company would lose business. On the contrary, the company
performed even better. According to the New
York Times by Duhigg, C., & Bradsher, K. ,“(l)ast
year, it earned over $400,000 in profit per employee” and later on in the
article says that Apple “employs forty-three thousand people in the United
States and twenty thousand overseas…Many more people work for Apple’s
contractors: an additional seven hundred thousand people…But almost none of
them work in the United States (2012, January 21).” With the unemployment rate
at 8.3 percent at the time, the United States saw a desperate need to create
more jobs for citizens (BLS 2013). Jared Bernstein, a former economic advisor
for the White House, is quoted saying that “Apple’s an example of why it’s so
hard to create middle-class jobs in the U.S. now (Duhigg, C., & Bradsher,
K. 2012).” Creating these jobs is just one way to decrease the unemployment
rate. If Apple would bring more jobs over to the United States, the country
would thrive more. But there are other ways to bring down the unemployment rate.
However with this outsourcing, Apple is able to still bring to the table
results. According to the New York Times article, “Apple, by comparison, has
released five iPhones in four years, doubling the devices’ speed and memory
while dropping the price that some consumers pay (Duhigg, C., & Bradsher,
K. 2012).” So even though outsourcing has cost some middle-class citizens their
jobs, the company was able to drop the prices of their product. But the issue
about the jobs is crucial to American unemployment rate issues. But some people
do stay positive. Economist at Harvard Lawrence Katz says “New middle-class
jobs will eventually emerge (Duhigg, C., & Bradsher, K. 2012).”
No
one is saying that Apple Inc. is responsible for the unemployment rate being so
high, however a couple unanswered questions arise. Will outsourcing raise the
United States’ unemployment rate? Will American middle-class be able to stay
afloat if companies all over the country outsourced so their production costs
would be cheaper? Will America be solely reliant on other countries to create
our goods for business? These questions may not be answered for years and it
may be too late when the U.S. realizes this. It may not. This will be something
that will be left for the future economist to decide.
Works Cited
Bureau
of Labor Statistics. (2013). Databases, Tables & Calculators by Subject. Bureau
of Labor Statistics. Retrieved April 17, 2013, from
http://data.bls.gov/timeseries/LNS14000000
Duhigg,
C., & Bradsher, K. (2012, January 21). How the U.S. Lost Out on iPhone
Work. The New York Times - Breaking News, World News & Multimedia.
Retrieved April 17, 2013, from New York Times. (2012, January 21). Apple,
America and a Squeezed Middle Class - NYTimes.com. The New York Times -
Breaking News, World News & Multimedia. Retrieved April 17, 2013, from
http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?pagewanted=all
Samuelson, P. A., & Nordhaus, W.
D. (2010). Economics (19th ed.). New York: McGraw-Hill.
Casey, this article is very interesting. I was not aware that a company like Apple, who people take such pride in as being an American company, relies on such a big part of its manufacturing from other countries. I feel like in general Americans usually gravitate more towards companies that sell products that are made in the United States. I think this is because there is a belief that if things are made on our own soil that they are made better with more time taken for attention to detail because the employees are not mainly focused on producing as much as they can as fast as they can to ship out to other countries. I feel because Apple once advertised that their products were made in America, people assume that they still are and this is why they are so successful in America and their products are always in such high demand. It would seem that such a successful company that was established in America, even though it is extremely successful around the world, would want to stay based in their home country and keep the majority if not all of their manufacturing there, especially during this time of very high unemployment. It is really shocking to me as you go through the article that the head people at Apple seem to have no concerns about the unemployment problem in America and what they could do to help since they are such a big company. The former White House economic advisor has a very good point when he said how Apple is a prime example as to why it is hard for people to get jobs in America today. If large companies that produce and sell massive amounts of products each year are not willing to keep any of their plants and manufacturing in America and insists on shipping it all over seas just to cut down on costs, the unemployment in American will skyrocket and be a bigger problem than it already is. I do agree with the article in that big companies outsourcing their manufacturing to other countries is not the only thing that contributes to unemployment but I feel like turning that around could be a huge help in reducing unemployment. In all I believe this was a great article to kind of bring out of the dark some of the things that are going on that are affecting our economy. I hope that the United States better figures out things to do to turn around the unemployment and I hope that America’s large companies like Apple come together to help as well.
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