Chinese Factory Workers Earning Only $8 per iPad?

Apple’s supply chain policies have recently come under fire from critics who maintain that the company is not giving factory workers a fair shake.

The issue is extremely complex, as Apple ($AAPL) operates a sprawling network of suppliers across the globe who manufacture popular products like the iPad and the iPhone.

Recently, a Korean Newspaper did some research and discovered that Chinese factory workers are earning only $8 for each iPad that is produced.  Considering the most inexpensive iPad sells for $500, the relatively cheap labor costs for producing this high-end gadget are somewhat surprising.

When you compare to the cost of labor to other geographic areas, it gets even more interesting. According to their sources, Korean factory workers are earning $34 for each iPad, which is more than 4X the wage of the chinese factory workers.

Apple’s treatment of suppliers and their workers is becoming a relatively “hot button issue” in the technology industry, as most consumers are somewhat blind to the complex supply chain and manufacturing processes involved to create these high gadgets.

The recent developments have cast a spotlight on the “under-the-radar” supply chain that plays a pivotal role in Apple’s dominance and industry-leading profit margins.

Human rights organizations like have staged protests outside Apple stores and have created petitions with the goal of improving working conditions in overseas factories.

Throughout this turmoil, Apple is not standing on the sidelines or trying to shuffle this issue under the rug.  In fact, the company did the total opposite by requesting an audit of the Foxxconn facilities in China where gadgets like the iPad and iPhone are produced.

Apple CEO Tim Cook recently spoke at an investor conference and maintained that the company has a good track record when it comes to establishing good working conditions.

 “No one in our industry is doing more to improve working conditions than Apple”

-Tim Cook, Apple CEO

It’s also worth remarking that other tech heavyweights like Hewlett-Packard ($HPQ), Dell ($DELL), Microsoft ($MSFT), and ($AMZN) are major customers of Foxxconn .  So this isn’t just an issue for Apple, but rather the entire technology industry as a whole.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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