Introduction

How many countries and workers does it take for you to be able to buy a cup of coffee? How many does it take to make your smartphone? Do the companies that produce these products treat workers well? Do their products harm the environment?

Let’s try to answer those questions. Thus far, you learned how the world has become more interconnected. Today, many goods are no longer made in one place. The work is divided among people in many different countries. Each country does its own part. This is true of something as complicated as your smartphone. It is also true of something as simple as a cup of coffee. There are now hundreds to even thousands of people who are part of making and delivering the products you use.

Today, Asia is the world’s center of production and distribution. More goods are produced there than anywhere else. This was not always the case. During the early years of the Industrial Revolution, Britain and the North Atlantic zone were the main centers of manufacturing. But since the late 1900s, this role has moved to Asia, and in particular to China.

This change has hurt some nations. At the same time, it has helped others. Companies moved factories to countries where workers are paid less. As a result, the United States has lost many manufacturing jobs. Yet, other kinds of jobs have developed here like those in the service industry. These have replaced many of the manufacturing jobs that were lost.

Apple’s iPhone

The Apple iPhone is one of the world’s most desired items. Apple has sold more than 1 billion phones worldwide. So, it makes sense to look at how the iPhone is produced and distributed.

Apple is an American company. However, it makes about half of its phones in Zhengzhou, China. The parts for the phone come from more than 700 different suppliers and about 30 different countries. The Apple factory in Zhengzhou is run by a Taiwanese company called Foxconn. It has around 350,000 workers. Most of them make only about $300 a month.

Being able to pay workers less is not the only reason Apple makes its phones in China. One of the main reasons is that few U.S. workers have the necessary skills. China has focused on training people to work in factories. That kind of training is now rare in the United States. Most Americans are looking for other kinds of work.

“There’s a confusion about China…the popular conception is that companies come to China because of low labor costs… China stopped being the low labor-cost country many years ago and that is not the reason to come to China from a supply point of view…the reason is because of the skill…and the quantity of skill in one location…The products we do require really advanced tooling. And the precision that you have to have in tooling and working with the materials that we do are state-of-the-art. And the tooling skill is very deep here. In the U.S. you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China you could fill multiple football fields” (Tim Cook, Apple CEO).

Apple says it makes sure all workers who help to produce its phones are paid a living wage.¹ It also says it makes sure workers have a safe workplace. Still, the company has not always lived up to its promises. There have been problems at some of its factories. There have also been problems at some of the mines that supply the metals needed for iPhones. Some minerals from Africa are considered conflict minerals. That means they come from areas where they may be used to fund civil wars.

There are about 400 steps in the production of the iPhone at its factory in Zhengzhou. Each day, about 500,000 phones leave the factory and move around the world into the hands of consumers. A city has formed around the factory to provide housing and necessities for workers. This has increased the number of people who depend on Apple for their livelihoods.

Starbucks coffee

Starbucks is enormously popular. The company has 28,209 locations in 76 countries. But its business practices have been challenged. Critics say Starbucks needs to be more ethical. In other words, it needs to be more fair and responsible. Its critics say Starbucks must make sure the farmworkers who harvest its coffee beans are not mistreated. They also want the company to do more to prevent harm to the environment.

Starbucks has listened to these concerns. The company has tried to make sure that all of its coffee is ethically sourced. This includes the source of the beans and production and distribution.

Starbucks gets its coffee beans from coffee growers in Latin America, Asia, and Africa. It says it has tried to make sure these farms treat their workers well. But how much does Starbucks really know about what happens on local farms? Some bad cases have come to light. For example, in 2018, some suppliers in Brazil were found to be using forced labor. These same farms also had young children working in the fields.

Starbucks says 99 percent of its beans are ethically sourced. Some of its coffee beans are Fairtrade, which means the farms it uses have been certified by experts. This means they have been examined and given a thumbs-up. But there are different levels of certification. Some are not very strict. They only ask that coffee farmers be 30 percent compliant.² This allows some coffee farmers to get away with mistreating their workers.

Starbucks has had other problems too. In 2018, a Starbucks store manager called the police on two African American men at one of its stores in Philadelphia. The men had done nothing wrong.
They were simply waiting for a business partner to arrive. After the incident, Starbucks closed 8,000 of its stores to provide retraining for employees. Supporters say this shows the company is serious about fighting racism. Critics claim it was all for show. They claim the company only acted to prevent its profits from taking a hit.³

Starbucks has responded to critics by creating programs that promote ethical sourcing, labor reforms, and diversity. It supports equal pay for men and women. They have also committed to hiring more veterans and refugees.

Starbucks has also promised to make its stores less harmful to the environment. It is now doing more recycling. Starbucks is also making its coffee cups more recyclable. But these efforts are small. The company and its customers still throw away huge amounts of plastic and paper every day.

Both Starbucks and Apple charge a lot for their products. However, people are still willing to pay those high prices. Until sales begin to drop, these companies will continue to produce goods in the same way. But customers have the power to push for change.

1 A living wage is pay that is high enough for a worker to buy what they need to live comfortably.

2 Being compliant means making the necessary changes to meet certain standards.

3 “Taking a hit” refers to companies losing money.