There’s an excellent New York Times article that’s been making the rounds over the last few days.
Titled “How the U.S. Lost Out on iPhone Work,” the article explains one of the reasons manufacturing jobs – particularly high-tech manufacturing – has been entirely outsourced to China. White the NYT piece makes a strong case that this is due to the entire supply chain for consumer electronics being located in Asia, the root cause is something a little more basic: it’s because the U.S. no longer produces the volume of semi-skilled workers and mid-level engineers to make manufacturing here cost-competitive.
Here’s two particularly interesting takeaways:
Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.
In China, it took 15 days.
Companies like Apple “say the challenge in setting up U.S. plants is finding a technical work force,” said Martin Schmidt, associate provost at the Massachusetts Institute of Technology. In particular, companies say they need engineers with more than high school, but not necessarily a bachelor’s degree. Americans at that skill level are hard to find, executives contend. “They’re good jobs, but the country doesn’t have enough to feed the demand,” Mr. Schmidt said.
And this:
It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.
Good read, for anyone interested. More here.
