The Ailing U.S. Economy: If Only Apple's iPhone, iPad Were Made in America

Strangely, some might suggest, Apple has emerged in bits and pieces in the U.S. economic story. There was the story during the debt ceiling debate that the Cupertino, Calif.-based company has more cash on hand with $76 billion on its books than the federal government.

Then there was talk that Apple's wildly popular iPhone is the reason America's wireless spectrum is stuffed full, potentially letting the federal government raise money to reduce its deficit by auctioning the government-owned wireless spectrum to cell phone companies.

But as the dust settles after the debt ceiling debate and the great downgrade debacle that has shaken U.S. and global markets, the focus returns to America's ailing economy, and what can be done about it.

The problem facing the American economy is clear. The nation's unemployment rate, still above 9 percent two years after the official end to the recession, needs to improve so that growth returns.

Some will make a chicken or egg type of argument, suggesting, like legendary investor Warren Buffet, that a housing recovery can jump-start employment, but the reality is that if people can get back to work America's economy will grow again, and all will be well.

How that happens is where things get interesting. The issue facing America and its unemployment rate isn't so much the Great Recession, as some will have you believe. The recession ended, but jobs haven't come back because the issue involves the changing dynamics of labor in the U.S.

In the 20th century, America's industrial revolution spawned higher-wage jobs in industries like automotive manufacturing and steel. We made big, great products, like nobody else -- and people went to work, earning higher wages that bolstered middle-class spending power, fueling years of overall strong economic growth.

Apple Briefly Passed Exxon

But in the 21st century, America is at the forefront of the technology revolution. On Tuesday, we saw Apple back in the news for briefly passing Exxon in market value to become the world's largest company. Not so many years ago, Apple was nearly bankrupt.

That was before the smartphone and tablet revolution that Apple has so effectively conquered, if not created, with its iPhone and iPad products. Apple is something America can and should be proud of, because it represents how America remains a global business leader in the new era.

Right now, nobody is doing it better than Apple, as its global smartphone and tablet dominance shows signs of reaching levels most of us wouldn't have thought possible. Consumers want the iPhone and iPad in China. They want the products in Brazil. And they want the products in Russia, and most everywhere else.

Just as Ford and General Motors emerged as powerhouse companies at the dawn of the industrial age, Apple has done the very same thing at the dawn of the consumer technology age. But there's one big difference.

In the industrial age, leading American companies manufactured their products on American soil, for the most part. Apple, for the most part, manufactures its products aboard -- in China, specifically.

If only the iPhone and iPad were made in America.

As the market fluctuates, Apple is either the largest or second-largest U.S. corporation in terms of market value but the company employes fewer than 50,000 directly. Foxconn, the Taiwanese company that makes the iPhone and iPad, primarily at plants in China, and products for other technology companies including HP, employs more than 1 million workers.

Apple Relies Upon Low-Cost Labor Overseas

We could use about half a million manufacturing jobs in America.

If Apple's iPhone, which has sold more than 110 million units since introduction in 2007, and iPad, the most popular tablet after being launched in 2010, were made in the U.S., the hundreds of thousands of manufacturing jobs created would almost single-handedly solve America's unemployment problem, getting the nation's economy back on track in one big swoop.

Consider only that most economists agree that the creation of an additional 100,000 or more jobs per month in America above what's occurring now would change the nation's fortunes.

If only it were so easy.

A key to successful consumer technology involves pricing, and Foxconn has a decided advantage with factories located in China. The company has battled controversy, including a spell of worker suicides last year, but the company has also grown incredibly fast, mostly due to its contracts with Apple.

While the iPhone and iPad are priced higher than competitive products because of their marketplace preeminence, manufacturing in the U.S. would require the price tags to soar since workers here would not stand for the pay or conditions they face in China.

But even though it's understandable why we have a great American company like Apple soaring while so many Americans can't find work, it doesn't make it easier to swallow. Because the fact is a fact.

If Apple's iPhone and iPad were manufactured in America, the nation's unemployment problem would evaporate and the U.S. economy would get moving again.