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Comment by freedomben | Hacker News Reader

I don't know about Jensen specifically, and I can't remember the guy at the moment, but there have been a few tipped hands including one where the guy on national TV said something about "Americans should be gluing the iPhones together in the factory, not Chinese" and it really made a lot of this stuff click for me: they want to provide low-paying American jobs in American factories. That's probably not the whole vision, but it is a big part of it IMHO. I'll try and find the quote or video but if someone else remembers this, please share a link

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That was Howard Lutnick. He's said a lot of, let's say "out-of-touch", things. He's not living in the real world, though.

Motorola tried that not too long ago. Didn't go well. If you want to decimate American wages, you could do it, but if you at the same time deport people who were the most ready to work for a pittance, it's going to be hard to do this without riots. Then again, Stephen Miller wants those riots, so maybe you're right.

The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.

The old chestnut that Henry Ford didn't actually say comes to mind though: "I wanted to pay my workers enough so they could afford the cars they were building." If they were making them in the US, Tim Cook could pay them enough to afford an iPhone on a payment plan with Verizon or AT&T. Even if he didn't want to, there's a federal minimum wage US workers employers are required to pay. What's frustrating is the investment Apple made in China is double the size of the Marshall plan the US invested in rebuilding Europe after WWII. That money could have been spent on America, but Steve Jobs spent it on China instead.

> That money could have been spent on America

This is wishful thinking, and similar to how how video game producers think if they stop N people from pirating a game, there will be N more copies of the game sold.

No, instead of that the game will be played less. And analogously, less iPhones would be produced.

You could argue that less iPhones would be good for the world, but that’s orthogonal to the topic.

You're overestimating the proportion of the price attributed to labor that goes into an iPhone. The reason that production is offshored is to shave off a few percentage points. The price difference is almost nothing to the buyer, but a lot to the owners of Apple.

iPhones have nothing to do with videogames. They are material objects, not zero marginal cost copies.

edit: and the point is that, across the economy, it is very good for labor. While the iPhone's cost would rise a little bit nominally, it wouldn't rise as a portion of income, which is the only important number. The retail price would probably rise a bit more than that, but that's because it is a luxury good and its price would rise as incomes rose.

> price attributed to labor that goes into an iPhone

Oh, that was not my point at all.

It's that we simply do not have the scale and manpower to do it. Maybe in ten years with more automation sure, but definitely not in the Steve Jobs era.

IPhone production cost in China is between $10 and $30 per item. I believe a factory with US-level wages would not increase its price but it would definitely decrease Apple's profit margin.

Interesting take. I would happily give up my iPhone if, instead, the US Department of Education got an extra $55 billion/year and US would pay people to go to college.

US pays people to go to college, but just the outliers.

It's an interesting tradeoff, make the outliers the best in the world at what they do, or make the average person slightly more competent.

I think it's difficult to design a system that makes both outcomes true at the same time. The countries that have succeeded in doing it so far have a tiny population compared to the hundred millions of students US/China/India has now.

China seems to be slowly moving to a system comparable to the US one where outliers are prioritized. India has avoided it so far, which is why we see so many generic software engineers from India. I wonder if that stance will change with that category of jobs rapidly shrinking.

Howard Lutnick is "in charge," real or not it's his world we're living in. ;-)

Despite their belief to the contrary the executive branch is in charge of very little in this country. They are harassing and extorting in legally dubious and often outright illegal ways, but companies and institutions and individuals are getting wise to the fact there’s very little power these guys really have because the law is structured to prevent executive abuse of power. All you have to do is get your suit filed and get a stay, and sooner or later the governments case likely falls apart. It’s frictionful for everyone involved and will sooner or later cause serious damage to the economy, but increasing as the initial shock fades, everyone is realizing the president is fairly weak and his antics and his hand picked but of loonies undermine any power they might have. It’s not Howard Lutnicks world, and as time goes on it becomes less and less so as they squander the reputation of the presidency tilting at windmills.

> The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.

Of course they will, Americans banks and “tech” companies are always coming up with creative ways to extend shady lines of credit to the poorest Americans.

You have one of 3 choices here:

1. Low paid American workers glue iphones together in sweatshops

2. Low paid Chinese workers glue iphones together in sweatshops

3. Well paid American workers glue iphones together in sweatshops, and to make this possible we have a massive tariffs regime that makes consumer goods massively more expensive and massively increases the price of all manufactured goods.

Pick your poison. They call economics the "dismal science" for a reason.

Chinese workers are not "low paid" relative to prices of goods in China though. A Chinese worker gluing an iPhone together can afford a decent middle class lifestyle, the Chinese version of the "American dream".

What America really needs is massive deflation in the cost of everything, curbing income inequality (which is driving inflation) and moving to renewables (cost of oil/gas also drives inflation).

Deflation is never going to be allowed to happen even if economic conditions allow it. The reason that the Federal Reserve wants inflation at ~2% is so that nobody hoards cash in their home and instead spends it before it loses value or puts it in a bank to lend to the economy or invests it. Deflation would mean that you could hoard cash and it would grow in value, leading to less money available for economic growth.

>> Chinese workers are not "low paid" relative to prices of goods in China though. A Chinese worker gluing an iPhone together can afford a decent middle class lifestyle, the Chinese version of the "American dream

I'm pretty sure this is what Apple wants you to believe, while Chinese company offers minimal wage for workers who assemble phones. One could never afford a decent lifestyle on a minimal wage.

Yes, and a big part of the reason labor costs are so high is that living costs are high. The US worker is saturated with debt, fees, payments, rents of every stripe.

If the US minimum wage is what we have agreed is the minimum amount someone should be paid to have a reasonable quality of life (and it can be argued that it is still too low), then number 3 is the only ethical choice.

>and it really made a lot of this stuff click for me: they want to provide low-paying American jobs in American factories.

This isn't a fair characterization. The people on reddit who complain that the coffee place is only scheduling them for 10 hours a week and that people are being stingy with the tips might actually prefer the factory job with a regular 40 hours, occasionally mandatory overtime, and $5/hr more than what Starbucks offers. If you disagree, then I suspect that there's no universe possible where you're satisfied without the population of the United States being cut by three quarters.

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