As talk of the iphone controversy heated up, many lamented that our jobs were being offshored to China. This struck me as short sighted as anyone can look at the back of the iphone to see it is 'assembled' in China, and upon opening the thing up, if one dared, a world of Japanese gadgets and technology would be exposed – gadgets and technology manufactured in Japan. In fact there would be no iphone without Japanese technology and manufacturing expertise. This is the same Japan whose wages are higher than those in America, the same Japan who supposedly suffered through a 'lost decade'.
So since no one will, nor should, listen to some schmuck on a talk radio show's message board, I give you Eamonn Fingleton, frequent guest of Thom's, expert and resident of Japan. Fingleton wrote a piece back in January that appeared in the New York Times entitled, The Myth of Japan’s Failure. In it he goes over the signs of Japan's surprisingly vibrant economy. But what struck me was his reaction in his blog to one of his critics after the piece was publish. In it he gets to the heart of the iphone matter:
Quote Eamonn Fingleton:He shows pictures of Japanese consumers lining up to buy the new Apple iPhone. This supposedly is evidence that the United States, not Japan, leads in cellphone technology. He omits to mention — something well known to anyone who follows global competition in that industry — that Apple is an outsourcer. Its manufacturing is done in East Asia, particularly in Japan and to a lesser extent Korea and Taiwan, with final assembly in China. Essentially most of the jobs are East Asian.
More generally Japan is by far the largest manufacturer of the key components in all cellphones. And the real technological magic is in these highly miniaturized components (they are why your cellphone doesn’t look like a walkie-talkie). A survey by Deutsche Bank some years ago identified nine key components in cellphones. Of the 36 manufacturers worldwide of these, 29 were Japanese — and just one was American. Japan indeed monopolizes the world supply of many such components and without them Apple, Motorola, Nokia, and so on would not have a business. An example is capacitors, formerly the size of light-bulbs but now, using tantalum technology, no larger than a grain of salt. They are essential in virtually all electronic devices and a typical cellphone requires half a dozen of them — all made in Japan, mainly by Kyoto-based Murata. According to the Asian Development Bank Institute, Tokyo-based Toshiba Corporation alone contributes 33 percent of the manufacturing content in the iPhone (in particular its superb touch-sensitive screen). Such manufacturing not only requires far greater per-capita capital investment than U.S. corporations can afford these days but vast amounts of secret manufacturing knowhow, typically built up over decades.
This is where the real quality jobs have gone. Corporate America is not inclined to put up the capital to reëstablish the technology to compete with this. Instead that money goes to bonuses and foreign investment. Nor is the federal government willing to take up the slack. Instead, the powers that be seem satisfied that American workers will fight over the scraps of the manufacturing process, demanding the low wage jobs that will never arrive until Americans are willing to accept the lowest wages in the world, and will ignore the capital intensive jobs that lead to livable wages, benefits and job stability. When we demand the jobs that are now being performed in China, what we are saying, whether we realize it or not, is that minimum wage is too good for us. It is time we recognize where our jobs really went, and why they are not coming back. We must change the way business is done in this country, not demand low skill, low wage jobs from less developed countries.