Why aren't iPhones assembled in the U.S.? It's not due to labor costs

The iPhone is manufactured in China and in a very detailed and well-researched report the New York Times explains how it is not primarily due to the higher cost of labor in the U.S.

If you have an iPhone you have likely noted the small text on the back that states, "Designed by Apple in California. Assembled in China." In the past Apple made all their products in the USA, but that is no longer possible today due to several factors detailed in an excellent New York Times article published on Saturday.

The New York Times article is based on interviews with more than three dozen current and former Apple employees and contractors, economists, manufacturing experts, international trade specialists, technology analysts, academic researchers, employees at Apple’s suppliers, competitors and corporate partners, and government officials.

In typical government fashion, statements are made without understanding the real problem when they see companies actually making a healthy profit. Betsey Stevenson, the chief economist at the Labor Department until last September stated, "Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice. That’s disappeared. Profits and efficiency have trumped generosity.” Seriously? Does the Labor Department really think making statements like this will help encourage companies to try to find ways to bring jobs back to the U.S.? Maybe the U.S. government should take a leadership role in encouraging more people to embrace engineering as a major or to increase the skills for manufacturing workers.

Your first thought may be that Apple can't manufacture iPhones in the U.S. due to the labor costs, but as the article points out the major costs are associated with parts and supply chains. It was also interesting to read that China can provide engineers at a scale that the US simply cannot support in a timely fashion. About 8,700 engineers were needed for the iPhone and it took just 15 days to get those engineers in China while it would take as long as nine months for that to happen in the U.S.

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