RALPH NADER: Hey Apple, Stop Listening To Carl Icahn And Pay Your Workers Instead
In a letter to Apple CEO Tim Cook, Nader, a multiple-time Presidential candidate, wrote that Apple should stop catering to the demands of activist investors like Carl Icahn, and use its cash to pay workers more instead of buyback its stock.
In his letter, which was first published by The Wall Street Journal, Nader walks through a scenario where Apple halves the hours and doubles the salary of its Foxconn workers, costing the company $5.4 billion annually.
"If instead of buying back stock," Nader wrote, "Apple had used its excess $130 billion to endow a foundation to achieve these reforms, it would have paid out at a conservative five percent interest $6.5 billion annually, enough to double wages and ensure a 40 hour workweek for hundreds of thousands of iPhone workers, while leaving a $1.1 billion surplus as an annual budget for ensuring topnotch health, safety and environmental standards at Apple factories... Finally, some of Apple's Chinese factory workers may become able to buy the iPhones they manufacture."
"'Designed by Apple in California' has a nicer ring to it than 'Assembled by workers paid about a dollar per hour, working 11 hour shifts, and sleeping eight to a room in the Jabil Circuit corporate dormitories in Wuxi, China,'" Nader wrote in his letter. "But, no matter how you spin it on the iPhone packaging, you continue to turn away."
Nader says the "corporatist" argument regarding pay for factory employees is that that's the price of cheaper iPhones. "This could be the case, if Apple was just barely profitable," Nader wrote. "But, as revealed in a recent letter responding to Carl Icahn's call for more stock buyback (you respond to [a] billionaire's pleas much more often than workers' pleas), Apple is planning to have repurchased $130 billion of its own shares by the end of next year. In short, Apple is so profitable that it does not know what to do with $130 billion except buy back stock from its shareholders to maybe boost its share price."
Now, admittedly, Apple spends like, a lot of money buying back stock, but it's also sort of hard to take Nader's math and implementation at face value and say that it would definitely work.
But as we've highlighted before, even some of the big investors that Nader takes aim at know that the aggressive returning of money to shareholders, rather than employees or for investment in their business, is not advisable corporate behavior.
And as Business Insider's Henry Blodget has written before, there is no "law of capitalism" that says a company must pay its employees as little as possible.
In its latest quarter, Apple took in $42 billion in revenue, sold more than 39 million iPhones, and had $155 billion in cash at the end of the quarter.
Which, at the very least, seems like a lot.
You can read Nader's full letter, embedded below.