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Apple's Foreign Suppliers Demonstrate Widespread Scamming and Horrific Abuse of Employees

Apple's bombshell report on its suppliers shows anti-employee practices as common as iPods. White collar criminologist William K. Black investigates.

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One supplier was caught dumping wastewater at a nearby farm. Another had a total lack of safety measures, creating “unsafe working conditions,” the report found. Five facilities employed underage workers.

The company in the past had refused to divulge its full supplier list even as it became standard practice for multinational corporations to do so after the public outcry in the 1990s over labor problems at Nike factories in developing countries.

Apple’s change of heart follows a highly publicized string of factory worker suicides in 2010 and deadly explosions in two Chinese factories in 2011.

The WSJ emphasized this chilling finding:

The report also found 24 facilities conducted pregnancy tests and 56 didn't have procedures to prevent discrimination against pregnant workers. Apple said that at its direction, the suppliers have stopped discriminatory screenings for medical conditions or pregnancy.

The article does not make this point explicitly, but these firms conduct these tests in order to unlawfully coerce their pregnant employees to have undesired abortions in order to obtain and keep their jobs.

Foreign Anti-employee Control Fraud harms U.S. Workers

These frauds take place abroad, but they harm employees at home. Mitt Romney explains that Bain had to slash wages and pensions to save firms located in the U.S. who had to meet competition from foreign anti-employee control frauds. The damage from foreign anti-employee control frauds drives the domestic attack on U.S. manufacturing wages. Bad ethics increasingly drive good ethics out of the markets and manufacturing jobs out of the U.S. and into more fraud-friendly nations.

A final caution is in order because each of the major articles on the Apple report failed to mention it. CEOs who are willing to routinely defraud their workers and expose them to grave threats to their health are exceptionally likely to commit other forms of control fraud.


Bill Black is an Associate Professor of Economics and Law at the University of Missouri – Kansas City (UMKC). He is a white-collar criminologist, and he was the Executive Director of the Institute for Fraud Prevention from 2005-2007.

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