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Robert Reich and the $1,100 iPad

November 30th, 2011 · No Comments · Economics

Jwj logo largeRobert Reich laments that workers can no longer purchase the goods they manufacture.

“For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.”

Seems to me like the iPad is a poster child for this issue. Sadly, those Foxconn workers are not making the kind of money that provides an iPad compatible lifestyle.

Given this, I wondered what would happen if we just did the right thing and:

  • 1) Repatriated manufacturing from China back to the USA
  • 2) Paid the people who built them a fair wage

How would this work out? Luckily someone has already done most of the math. If we paid Americans the current $32.53 an hour wage (Average U.S. manufacturing/mining/construction compensation) for producing an iPad, Apple would need to charge $1,144.02 in order to keep their margins the same.

Problem is, Reich apparently doesn’t like the current prevailing wage. Wonder what an iPad would cost if we bumped that hourly up to a reasonable rate? Maybe $2,000?

Hey, works for me. All ya gotta do is make sure that sales don’t drop due to the price increase, and that all potential competitors worldwide agree not to be unscrupulous and take their manufacturing overseas as well. Could be a problem is somebody else comes up with a decent tablet that undercuts them significantly.

PS: This post made me nostalgic for the good old days. I remember when my dad worked at Boeing way back when. Still have those happy memories of picking up that shiny new 737 back in ’67 when it came out. Loved flying that classic around the block. Good times. Too bad those days are now likely lost forever thanks to the greed of Airbus.


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