patrick.net

I'm pretty sure that the 1% will hoard as long as they can, even though it is hurting their bottom line long term.

Apple took a beating in the press about working conditions in China. They have somehow convinced a bunch of lower skilled employees in the US to work for them for much less pay than their counterparts at Verizon or Best buy. They are likely giving raises to avoid bad press and avoid losing workers as the apple worker bees realize that they could make much more money elsewhere.

I guess the cult of Apple gets employees to work for less AND customers to pay more. Sweet.

BoomAndBustCycle says

25% increase is a pretty hefty pay increase

How different is that from a Macy's and Nordstroms sales person ? A Nord's sales person certainly has a higher pay to Apple.. Apple kids work in Jeans and company provided t-shirt.. Compare that to a Nord's sales person in a $500 suite.

http://www.forbes.com/sites/elainewong/2011/03/17/the-highest-paying-retail-sales-jobs/

BoomAndBustCycle says

But is this a one time thing or are more companies that are HOARDING cash starting to realize they have to give back some of that money, so people have money to spend on their products?

No they are not hoarding Cash.. the media spews out that Apple has $100B or so "Cash in Bank".. like so many companies, a fraction is actual cash in bank, while the rest was used to buy US Govt Treasury Securities. Apple has only $9B in Cash and Over $90B used to purchase US Treasuries and other securities.

Apple did not take a beating, and they don't care.
Having been to China (have you?) I know that Foxconn is like many places where they work their asses off because they need work. There are over 1 billion people in China with nothing to do almost and who make almost nothing.
Apple is going to continue to kick ass and take names. You can buy a mouse by microsoft and it was also made by foxconn. Etc.
Everything is made in those factories, check out Nike.

If we can make Chop Sticks in the US and export them to China cheaper..

there is no reason we cant build Apple products or MS mouse in the US. I havent been inside of Foxcomm, but have seen the inside or Sun Micro, Apples, and AMD facilities when they actual had mfg in Silicon Valley.

http://www.dailymail.co.uk/news/article-2022211/US-exports-chopsticks-China-Georgia-producing-utensils-wood-shortage-grows.html

U.S. exporting millions of chopsticks to China as wood shortage grows in Far East

Poplar and sweet gum trees ideal for chopsticks
Georgia Chopsticks producing two million sets a day
Founder Jae Lee says people thought he was crazy
UPDATED: 21:57 EST, 3 August 2011

More than 60 billion sets of chopsticks are produced every year in China, so you’d have thought they would be making enough.
But a chopstick shortage is growing in the Far East, prompting a U.S. company in Georgia to start exporting millions to the country.
Georgia Chopsticks is producing an incredible two million sets of the utensils every day, reported the Daily Telegraph.

Don't conclude wage inflation from one data point. The average hourly wage for an Apple sales person is $11.91. The main reason for the increase is due to the fact that Microsoft (and other companies) are following in the footsteps of Apple. They have been poaching Apple employees as well.

Manufacturing an iPhone in the United States would cost about $65 more than manufacturing it in China. That's not so bad, given that Apple's profit margin is about $250 per phone. But those jobs simply aren't coming back... we've lost the comparative advantage.

BoomAndBustCycle says

25% increase is a pretty hefty pay increase

When you think about it, 28% at Apple store wages really isn't that much.

tdeloco says

That's not so bad, given that Apple's profit margin is about $250 per phone. But those jobs simply aren't coming back... we've lost the comparative advantage.

No so fast... actually, the Chinese workers are not that great when it comes to productivity.. specifically im referring to spoilage of materials .. chinese mfg waste too much material vs their US counterpart.

You can ask the Apple Cost Analyst covering Cost Variances production over the past several years. They will tell you the same...
The $65 isnt at real Factory Labor, Material, and Overhead costs, but also includes...FoxComm/Asus profit margin, and is using full retail prices. Actual labor material and OH isnt disclosed anywhere by FoxComm. You would have to break into their Chinese books to see that.. and thats not going to happen.

Logistic isnt a problem US mfg companies has been a spear head in creating the best supply chain across any facilities. Components and finally assembly need to be moved back to the US.

Outbound shipping, thats a smoke screen, not a product cost issue, that cost is picked up by the retailer from the shipping company.

We have as many 'nimble' factory space in the US as they have in China. Frankly if you can mfg goods in dinky Santa Clara County back in the 70s and 80s it certainly can be done in any state here. We created that with JIT and Supply Chain - PLM solutions.

Finally, just home many engineers does it take to screw in a light bulb.

It doesnt take that many engineers to create a toy like an ipod or Ipad.. thats just a bad joke! If it took a max. of hundred engineers back in the 80s to work on a next generation of Sun Sparc Stations.. far more complex .. then you certainly dont need 1000 engineers to make an Ipod.. The whole idea of needing 10,000 engineers is way overblown... Most US companies in the past use a handful, and its worked well. In china and india, most managers, hire 100 of their close and distant relatives. And even worse use some family business as a vendor for goods and services. Thats how bad the corruption is in China/India. YEA thats what is happening out there.

Google will be manufacturing their recently announced social streaming media hub, the Nexus Q, in Silicon Valley.

The average Apple worker in the U.S makes $30,000 a year. A 25% boost puts them at $37k. That's still $23,000 less than the average Verizon worker.

EBGuy says

Google will be manufacturing their recently announced social streaming media hub, the Nexus Q, in Silicon Valley.

more like in USA, and more like in Texas, Arizona, or Ohio...
not Silicon Valley.. but its good news anyway..

hopefully the State of California and other mfg will learn something over it..

Im all for it!

It already is manufactured in silicon valley, thomas.

Whether or not they move it afterwards is another story. I read the Nexus article, and all in all is sounds like pretty good news with regards to manufacturing in the US.

It already is manufactured in silicon valley, thomas.
CM, that was my initial reaction. Maybe the that point that TW is trying to make is that its ASSEMBLED in Silicon Valley; the manufacturing if most of the components takes place outside of SV.

Good on Apple. Likely they can afford to do this next year too. Then at least their low-level workers will be rewarded for their dedication. The few times I've been in a Apple retail location or on the phone with AppleCare they have been top-notch.

EBGuy says

Maybe the that point that TW is trying to make is that its ASSEMBLED in Silicon Valley; the manufacturing if most of the components takes place outside of SV.

ah, yes, fair point. He's probably correct too. From the linked article:

In fact Google hasn’t revealed the actual Silicon Valley manufacturer nor is it saying where the Q’s components are made.