UnEqual Exchange: Apple Mac Shows the Way!

When Steve Jobs died, he left something like $60 billion, and quite recently, Apple announced that they had about $100 billion lying around. That’s a lot of small change. The question, though, is how did they make all this profit, and that is what I’m going to be looking at. This is an example of a company that has been very successful at the principle of unequal exchange, i.e. profit.

Price of a MacBook
So let’s say that the price of the most junior version is $1200 or thereabouts. Then, let’s take the basic wage of a worker in America and see how much they earn per month. At $8 per hour, and forty hours per week, that would be about $1300 per month. So, I think, we can safely say that it takes the full basic wage of a worker to buy a MacBook.

Now let’s look at what at what it costs to make.

A Rare Look at Apple's Production Line in China

This is a video produced by the BBC of Apple's production line in China. To quote from the BBC Website from February 2012, "... Workers  live in a dorm with seven strangers, performing the same task six days a week. Foxconn company executive Louis Koo was asked about the treatment of employees, including a spate of 18 suicides in the past few years.

Production Cost of a MacBook
Now let’s see what the worker who is putting together the various parts of the computer in China is earning. Foxconn, the factory that produces Apple, is situated in Longhua, Shenzhen. The basic wage in this area is $205 per month. Assuming that they work a 40 hour week (they work a lot longer hours than this), their per hour wage would be $1.25 per hour (I’m being generous). Let’s say that it takes them an hour (again, I’m being generous) to whip together all the different parts into a computer. That means the actual cost of labor for the computer is $1.25. Now let’s take the cost of the materials and robotic conversation of those materials into the required parts. Bearing in mind that various precious metals like gold are sometimes used, and that logic boards, hard drives, ram, etc. are pretty pricey, let’s be really, really extravagant and say the parts, etc. are about $100. Understand that the price being paid for in the United States is nowhere near what they actually cost to manufacture. Most of it is just profit. But more than that, the fact that Apple Mac has such an excessive profit tells me that there is an enormous mark-up on their products.

Also, because these parts are produced by robots, the process is very fast - minutes. So, in actual terms of labor, we’ll be kind and say thirty minutes per computer, counting all the paper work, shipping, etc.

Total Cost of Computer
So maybe the total cost of an Apple MacBook is about $120 total - 10% of what it is being sold for.

A Matter of UnEqual Exchange.

Perhaps my figures are a bit skewered and some will argue that they are. However, Apple pays its management, shareholders, and CEO very well, and they still have this excessive amount of cash over. That’s because the profit mark-up is so large.

But let’s look at this another way - in terms of exchange of labor. It took about an hour’s labor in China to make this computer and this is being exchanged (bought) by someone in America who has had to work 160 hours in order to pay for the computer. This is unequal exchange (profit) working at its best.

So the Big Question is This...
Is it for the greater good of humanity that a small minority of humanity screws two sets of workers for their excessive enrichment?

If your answer is yes, well, I guess you don’t have much respect for humanity. And if your answer is no, the question is what are we going to do about it?