What Happened to Apple's 'Nike Moment'?

Article excerpt

Every decade, it seems that a new social issue captures the attention of Catholic progressives, inspiring efforts to work for a more just society. In the late 1950s and early 1960s it was civil rights. In the '80s it was nuclear arms.

In the 1990s, that issue was sweatshops. As new technologies increased international communication, people began hearing firsthand accounts of labor rights abuses that never made it into the mainstream news space. Many companies were shown to use sweatshops. But one company rose to the forefront of the debate: Nike. As a brand, it evoked the best in American culture: commitment, achievement, competitiveness, cool and a sense of fair play. But as tales of its rights abuses spread, Nike became a cultural symbol of everything that was wrong with capitalism and globalization.

Over the years, Nike remained a focal point on college campuses for students learning about the implications of Catholic social teaching. Yet anger over sweatshops in broader American culture has waned. In some quarters, we've even seen the growth of a profoundly un-Catholic hostility to labor rights efforts. Then, in January, news broke of labor issues at the factories of Taiwan-based electronics manufacturer Foxconn: low pay, long hours, dangerous working environment, and cramped living conditions. Public ire was raised. And with it, a question: Would we see resurgence of concern for sweatshop workers? Do we have a Nike for the new millennium?

Among Foxconn's clients, the most likely candidate was Apple Inc. As the creator of the wildly popular iPod, iPhone and iPad, Apple is the dominant player in the world's tech landscape and a symbol of our new connected lifestyle. As with Nike, people love Apple's products and are brand loyal in ways that most companies can only dream of

But Apple is also a massive economic powerhouse, now the world's most valuable company. With more than $500 billion in market capitalization, it is worth more than the gross domestic product of nations like Poland, Belgium, Sweden, Saudi Arabia and Taiwan. An analyst at JPMorgan suggested that Apple generates enough revenue to be its own industrial sector on Standard & Poor's 500 index.

The secret to its financial success: high profit margins. By some estimates, 57 percent of the price of an iPhone is profit. That's 15 percent higher than the closest rival. Those margins are created in large measure by squeezing suppliers who, in turn, squeeze their employees.

Indeed, it sounded like Nike all over again. All that remained was to see whether or not people would agree and begin to pressure Apple the way they did Nike.

Outrage deflected

Two months later, it's clear that this wasn't Apple's "Nike moment." Indeed, with the release of the new iPad--the very machine made by the workers in question--Apple appears to be on track for another record-breaking year. So where was the outrage?

It seems that four things happened.

* Apple looks like it is trying. Apple successfully argued that it has been improving its subcontractors' working conditions. For the past five years, Apple has publicly released compliance reports. These reveal efforts to improve conditions by, for instance, removing unlawful child labor. It has also increased its green profile, expanding its recycling programs and steadily removing toxic chemicals from its products and manufacturing processes. It became the first tech company to join the Fair Labor Association and is working to reduce overtime hours

It certainly doesn't hurt Apple's reputation that the man who recently brought attention to these issues, playwright Mike Daisey, has admitted that some of the worker stories he told in a monologue on a January episode of NPR's "This American Life" were fictitious. His stories closely correspond to reports published by reputable newspapers over the past few years. But in the wake of the disclosure, Apple ends up looking like a well-intentioned company being bullied by questionable critics. …