As you can see, the average wage of a Foxconn worker would double, while Apple’s profits would barely be affected.
Why would Apple want to do this? Smith argues that when Henry Ford raised wages for Ford’s assembly line workers it led to other manufacturers having to raise wages to keep up. That ended up creating a lot of wealth around the country, which led to more people being able to afford cars.
In theory, Apple could take a very small short term profit hit to accelerate the development of China’s iPad/iPhone buying middle class.
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