Wednesday, December 26, 2007

Cost of the high tech industry

Seattle's famous for its software and internet industry. People are given all they need to be creative, to expand their ability to come up with new ideas that can earn lots of money. Millionaires, both here and in Silicon Valley, are made through successful innovation. But while workers here are pampered with every extravagance, from flex time on down, the people who make the chips and assemble the components that their prosperity is based on don't do quite as well.

According to the Bureau of Labor Statistics(1), the mean wage of semiconductor workers across the U.S. is $16.70 an hour, with the mean wage in California being $18.35. But according to an article in the "Global Workforce Report" (2), a Human Resources publication, coming from November 19th of this year, there was an 80% "wage differential" between Chinese workers and U.S. workers. What this means is that the Chinese workers made 20% of what the U.S. workers made, or $3.34 an hour when compared to the national mean wage.

A recent article in "The Mail", a very mainstream English newspaper, reported(3) that the workers assembling Apple products including IPods, which is less of an elite job than manufacturing the chips themselves, made $53 a month at one plant for 15 hour days and $107 a month at another plant.

Flex time and compensation for creativity is at its heart made possible by slave labor wages, where the most skilled laborers are paid less than the U.S. minimum wage.

The relationship between the costs of chips and the wages of programmers is simple: the more expensive computer equipment and by extension the internet is to acquire and run the more computers remain a specialty item with less of a market, and the more of an upscale item they are the less programming companies can hope to make by selling their software, and the less they can then afford to pay their programmers. But because of a crash in the cost of computer equipment through offshoring the manufacturing process computers are available for everyone, able to do more than ever, are replacing CD players, are being used for more and more in upscale workplaces.
Computers are cheap as hell, with amounts of memory and processing power that were unthinkable just a few years ago, gigabytes of internal memory, hundreds of gigabytes of external storage. High technology, for sure, but doesn't high technology eventually price itself out through increasing the cost of making it to a point where it isn't feasible? That doesn't seem to be happening, and there you may have the result of globalization and the race to the bottom.

If computer manufacturers had to pay a decent price for the costs of their products the tech industry would be less inclined to grant extravagant indulgences for a privileged few workers.

1 comment:

Renegade Eye said...

There have been attempts inside China to make laws for fairer wages. The US sabotaged those efforts.

We both know the obvious solutions.