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Redefining Shareholder Value
Apple's announcement about improving working conditions in its factories could introduce a new era of fair trade electronics.
Earlier this year, Apple made an announcement that has potentially significant ramifications for the technology marketplace.
No, I am not referring to the iBooks 2/iBooks Author news. I'm talking instead about Apple's decision to enlist the Fair Labor Association (FLA) to inspect the foreign factories where its products are made, specifically the Foxconn factories in Shenzhen, China, that have been the focus of much criticism (including my editorial in December).
Not that the FLA decision didn't meet with its own criticism. Almost as soon as Apple made the announcement, there were new voices of concern about the impartiality of FLA's president, Auret van Heerden. According to several news reports, including The New York Times, van Heerden said Foxconn's "facilities are first-class" and "Foxconn is really not a sweatshop." As Scott Nova, executive director of the Worker Rights Consortium, said in the same Times article, "Generally, in a labor rights investigation, the findings come after the evidence is gathered, not the other way around."
In spite of--or maybe because of--van Heerden's remarks, Foxconn soon announced that it was raising worker wages between 16 and 25 percent.
Do I think that these events are promising? Actually, yes. Even though Apple is by no means the only company that uses factories with working conditions that we would find unconscionable in this country, it is the only company, to my mind, that can lead the way toward some measure of justice for the people who build our electronics products. And even though the criticisms leveled against Apple and the FLA may be correct (and caution is definitely warranted), I think we are moving in the right direction.
To me, we are heading toward an expanded definition of "shareholder value" that goes beyond dollars and cents to include other elements of value, such as the health and welfare of workers, protection of the environment, and strong communities with good schools. I think Apple shareholders--who are enjoying huge profit margins--could certainly agree to a small bite out of the company's bank account in exchange for these other investments.
But we, as consumers, have our part to play as well, because we are going to be asked to pay more for our products--as well we should. I'm mindful that not everyone can afford top-tier prices. But I believe there are people and institutions--especially mission-driven institutions like schools, colleges, and universities--for whom price is not the only concern when they consider a product's true value.
After all, many of us pay more for fair trade coffee because we don't think a cheap cup in the morning is more important than the welfare of the people who grow the beans. Likewise for the people who build our computing devices: Isn't the world ready for a Fair Trade Electronics organization?
Note: The Worker Rights Consortium is a university-backed group that monitors apparel and other factories worldwide. You can find out about them and even get involved at Worker Rights Consortium.