Dark Cloud Looms Over Amazon’s Innovation Challenge

Amazon’s web services hold the company back, despite its attempts to promote the innovations of others.

BalticServers_data_center_WikiMedia
A row of servers in a data center.

By Kegan Gerard

Amazon Web Services (AWS) announced its second City on a Cloud Innovation Challenge today, but key changes must be made within the company before it can truly lead the innovation charge.

The City on a Cloud program, designed to recognize local and regional governments for technological developments that greatly contributed to their communities, comes at a time when its influential business clients are pressuring the tech giant to be more transparent in its energy portfolio.

“The cloud can be a powerful force to help our companies and our customers reach their greatest potential,” noted AWS clients, including The Huffington Post and tumblr in a letter to Amazon’s Senior VP of Web Services, Andrew Jassy. “But given the threat of climate change and the significant amount of electricity needed to power the cloud, we are increasingly concerned about our responsibility as companies who value sustainability and share concerns about climate change.”

By powering its data centers with unsustainable fuel sources, Amazon is missing out on key innovations in the field of renewable energy–innovations that have the potential to create thousands of new jobs, reduce healthcare costs, and improve the health of our environment.

Kegan flyering at GovCloud event
Handing out information on AWS’ energy use at it’s GovCloud conference in Washington, DC.

As a part of Green America’s Amazon: Build a Cleaner Cloud campaign, we teamed up with representatives from Greenpeace to talk to attendees of AWS’ June 25th GovCloud conference in Washington, DC.

Representing governmental, educational, and nonprofit fields, these GovCloud clients have the perfect opportunity to demand greater transparency in Amazon’s renewable commitment. In refusing to be transparent about its energy usage and plans, AWS deprives these influential groups of the ability to make responsible, informed decisions about where to invest public money.

Merely committing to using 100% renewable energy, as AWS has done, is meaningless without a clear plan to achieve this goal. We’re calling on AWS customers to reach out to their AWS representatives to demand greater transparency in Amazon’s energy future and cease the construction of new data centers that rely on non-renewable energy.

Companies like Google and Apple, whose data centers are powered by renewables, have demonstrated that such a business model is profitable, and Amazon must keep up in order to remain competitive.

Help encourage AWS to deliver on its responsibility to build a cloud that works for both our communities and our environment. Take action with us by signing our petition at buildacleanercloud.com.

Victory for Bangladesh Garment Workers

Rana PlazaWhile no court ruling or monetary sum could undo the hardships faced by thousands of garment workers and their families after the 2013 building collapse in Dhaka, Bangladesh, two recent events help to bring some justice to victims.

First, on June 1, 2015, Police in Bangladesh charged 41 people with murder over the collapse of the Rana Plaza garment factory complex, including several owners of the factories inside. The trial is set to begin June 28.

Then, on June 10, the Rana Plaza Trust Fund reached its goal of $30 million to compensate injured workers and the children of workers who died in the garment factory collapse more than two years ago. In all, 1,138 people lost their lives, and more than 2,500 were injured.

The Rana Plaza Trust Fund was established by the International Labor Organization (ILO) to collect money to cover loss of income and medical expenses for Rana Plaza victims and their families, some 5,000 claimants.

Brands who manufactured in Rana Plaza, as well as brands who manufactured elsewhere in Bangladesh, were asked to contribute to the fund, based on their size, and involvement in Bangladesh. This was not the first building catastrophe in the Bangladeshi garment sector, and Rana Plaza was far from unique in the way that it was run.

As the two year anniversary of the collapse—and fund deadline—approached, consumer pressure on brands that were slow to contribute mounted.

Green America worked with allies like the International Labor Rights Forum and The Clean Clothes Campaign to pressure Walmart ($482 billion in annual sales), Inditex (owner of Zara) ($18.9 billion), JCPenney ($11.9 billion), Mango ($4.5 billion), The Children’s Place ($1.8 billion), and United Colors of Benetton ($1.6 billion) to contribute, or increase their contribution, to the fund.

In response to pressure, both The Children’s Place and Inditex increased their contributions to compensate victims. The Clean Clothes Campaign maintains a list of which brands contributed what.

After reaching this goal, Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, shared with The Guardian,  “In comparison to the loss of families and victims, compensation doesn’t really alter anything,” Akter says. “But it will still help at least to send these kids to school and to put food on the table for these families. I want to thank every single person who was involved in this campaign, everyone who sent even one sentence to a brand and asked for compensation for these families.”

Thank you to all Green Americans who joined us in putting pressure on clothing brands.

Enough is Enough: It’s time we knew the True Cost of our clothes

Will 2015 be the year when we say enough is enough? The year we hit the tipping point and start to see change in the global garment industry?

The makers of the film The True Cost certainly hopes so. And so do I.

The film, screening in cities around the world starting May 29, exposes the problems that exist, and still too often remain hidden, in the world of fast fashion.

2014, the year after Rana Plaza collapsed taking the lives of 1,134 garment workers, was the most profitable year on record for the fashion industry, estimated at roughly $3 trillion USD.

And why is this so? Consumers around the world are fed messages that if only they purchase a certain garment to look a certain way, their lives will be better. And why not? It’s so cheap. If your life isn’t remarkably better after you buy said-garment, you can just buy another one. This trend is confirmed by the fact that we are consuming 500% more clothing than we were 2 decades ago. (Two decades ago was only 1995!) And we are throwing out more clothing too—on average 68 pounds of clothes per US consumer per year. This vicious cycle needs to stop, because it is workers and communities at the start of the supply chain that are paying the price for ever-more and ever-cheaper clothing.

The price on the hangtag of a Zara blazer or Gap dress is not at all indicative of the true cost of that garment. It does not reflect all the corners that are cut to get the garment on the shelf: the brand squeezing the factory to make the garment for less and less. The factory in turn squeezing workers, asking them to work long hours to meet quotas, for very little pay, often in unsafe conditions. Nor does it include the environmental costs—clothing factories require massive amounts of energy and water to operate and then discharge chemicals into the air and water surrounding the factory. These chemicals end up in the drinking water of the surrounding communities causing life-threatening diseases like cancer or serious mental and physical disabilities.

The True Cost is not just gloom and doom though. It follows fair trade companies like People Tree, which maintains direct and long-term relationships with producers all around the world.  People Tree is no small operation, it works with more than 4,000 artisans and produces garments as beautiful as anything you see in the windows of 5th avenue. People Tree is a model for other brands, proving a better way is possible.

The film is powerful and empowering. It asks us to question our consumption habits and to think about the people involved in making all the clothing we wear. It acknowledges that we live on a planet overwhelmed by problems that sometimes feel totally depressing and paralyzing.

But it also invites us to tackle these problems one at a time. What if we started with a problem we are all involved with—the clothes we choose to wear—and started to choose differently. These choices collectively will make a huge impact on the clothing sector. We can come together now and say enough is enough.

The True Cost will be screening in select cities starting May 29, and will also be available online and on DVD for $10-$15. 

World Fair Trade Day is May 9. Celebrate by Taking Action!

farmersThe fair trade movement in the US is growing, and that’s good news! But even as demand for fair trade products increases,  there are still millions of individuals working in agriculture around the world living in extreme poverty.

World Fair Trade Day aims to bring more awareness to the fair trade cause. This year, more than awareness, we’re trying to increase sales of fair trade products so that more money can get back to the farmers working in fair trade. We hope that as demand grows, so will supply, and that means that more farmers will join the fair trade system and more money will be transferred out of the conventional economy into one that is fair and sustainable.

Green America and Fair Trade Campaigns want to bring sustainable livelihoods to all this World Fair Trade Day. Here are three crucial actions to deepen your involvement in the Fair Trade Movement:

dear manager 1.) Request fair trade produce at your local supermarket.  

You already know that purchasing fair trade products empowers workers around the world to lift themselves out of poverty and grow their communities. But how many of us stop to think about the countless farmers and artisans behind the non-fair trade products that line supermarket shelves? These individuals often face substandard living conditions, low wages, even starvation.

In order to help these farmers and artisans we have to continue to increase the demand for fair trade products.  Click here to print a Product Request Card. Then, submit it to your supermarket chain.

Rogelia Serna Cruz and husband Luis Angel Juarez Morales of Tapachula, Chiapa smile as they harvest Fair Trade cucumbers.
Rogelia Serna Cruz and husband Luis Angel Juarez Morales of Tapachula, Chiapa smile as they harvest Fair Trade cucumbers.

2.) Educate yourself about the reality of many fruit and vegetable farmworkers. 

Last December the L.A. Times investigation “Product of Mexico exposed the poverty, hunger and unsafe working conditions that non-Fair Trade farmers confront on a daily basis.  The prospect of being fired forces many farmers and workers to endure these abuses silently.

Getting even one new fair trade product into your local supermarket has a tremendous impact in the lives of hundreds of farmers and artisans throughout the world. It can mean having a satisfying dinner instead of going to bed hungry, getting life-saving medical care instead of slowly succumbing to treatable illnesses, and creating an education system for one’s children that will prevent them from falling into poverty.

3.) Start or join a Fair Trade Campaign.  Click here to see our Fair Trade Campaign Map.

Will you help your community increase fair trade product availability this World Fair Trade Day? Show your concern for others by demanding food that feeds the people who grow and pick it. Make your voice count!

Hershey’s Kisses Will Get A Makeover By 2016

2016 hershey barsHershey announced yesterday it will source enough certified and sustainable cocoa in 2016 to surpass the amount of cocoa required for the global production of four of its most popular chocolate brands including:

  • Hershey’s Bars
  • Kisses
  • Kit Kat(United States only)
  • Brookside

This announcement comes a little more than a month after Hershey announced it would transition to “simpler ingredients” in its products, including switching the sugar used in two of its flagship products (Hershey’s Bars and Kisses) from genetically modified sugar beets to sugar cane, which is non-GMO.

That means that by 2016, some of Hershey’s most iconic products, perhaps even Hershey Bars and Kisses, will not only be non-GMO, but also ethically certified as being made without child labor.

This is a huge win for consumers. For years, conscious “deep green” consumers have been pushing Hershey and other major food companies to make their products more responsibly, with a particular focus on farmers and the environment. In fact, Green America and our allies led the “Raise the Bar Hershey!” campaign and organized tens of thousands of consumers to come together and pressure Hershey to address the worst forms of child labor in its supply chain.

In October 2012, Hershey announced it would ethically certify all of its cocoa by 2020, following in the steps of other chocolate companies like Mars and Ferrero. Hershey also committed to reaching 50% by 2016, and announced in January 2015 that the company is ahead of schedule to meet this goal. Hershey’s recent announcement is another sign that Hershey is following through on its commitment to source 100% ethical chocolate by 2020.

On the non-GMO side of things, Hershey is now the leader amongst big candy companies. While Nestlé announced recently it would remove artificial flavors and dyes, it has not committed go non-GMO for any of its products or ingredients. Additionally Mars has yet to announce any non-GMO candy options.

Hershey and its competitors would be wise to continue the trend toward simpler ingredients across their offerings. According to Forbes and the Wall Street Journal, consumer food preferences are shifting quickly towards healthier options; and more than ever before, consumers are actively searching for organic and fair trade options that align with their values.

Check out our Chocolate Scorecard to find fair trade and organic chocolate options for your chocolate fix>>

For just $12.38 per iPhone, Apple could pay its workers a livable wage. 

Today Apple’s shareowners will vote to approve the compensation packages of its top executives at its Annual Shareowner meeting in Cupertino, CA. The company broke records last quarter selling 74.5 million iPhones and earning $18 billion in profits.

Executives will be rewarded lavishly:
Tim Cook, CEO: $1.7 million salary, $9.2 million total compensation
Other senior VPs: $947,596 salary, $28 million average total compensation

What won’t be discussed at the meeting is the ongoing struggle of the workers who make Apple’s highly profitable products. While executives earn millions, workers make a little over $3/hour. In order to earn enough to cover living expenses workers rely on overtime, sometimes working as many as 64 hours per week at one Apple supplier, according to China Labor Watch.[1]

We’ve estimated that Apple could pay its 1.5 million workers a decent wage for only $12.38 more per device. That’s just 7% of its profits last quarter.[2]

Our latest infographic breaks this down.

Would you pay $12.38 more per iPhone to ensure workers are earning decent wages?

Apple could, and Apple should.

Apple Wages Infographic

Download infographic as PDF (for printing).

 

 


[1] Analyzing Labor Conditions of Pegatron and Foxconn: Apple’s Low-Cost Reality, China Labor Watch

[2] Explanation of calculations:

This calculation is conservative and rough, as there are many variables in production. It is meant to show how much workers in the supply chain are squeezed.
China Labor Watch estimates Apple’s quarterly labor costs at $3.4 billion per quarter (20RMB/hour for 1.5 million workers for a 55-hour work week). Average overtime hours per week at one major Apple supplier during Q1 2015 was 24 hours. Including overtime pay, Apple’s quarterly labor costs increase to $4 billion. CLW estimates it would cost Apple $5.3 billion per quarter to bring worker base wages up to a level that would cover basic living costs for an urban resident in China at 55 hours per week. This is  $1.3 billion more. Apple sold 105 million devices in Q1 2015. This is just $12.38 per device. This is also 7% of last quarter’s profits. 

 

Apple soars. Workers suffer.

The world’s most popular product relies on poverty wages, as low at $0.27 per iPhone.

Apple made headlines last week when it announced record-setting profits from its most recent business quarter (Oct-Dec 2014, Apple’s fiscal Q1).

$74.6 billion revenue

$18 billion in pure profit

$142 billion net cash reserves

74.5 million iPhones sold
Apple fiscal Q1 numbers, as reported by BBC

These figures blew past many analysts’ predictions and Apple’s previous records for the same quarter last year.

On the micro level, there are also some important numbers to pay attention to:

Number of workers in “final assembly” plants: 500,000

Hours worked per week: 72 – 105
Hours are higher during peak production seasons. The following calculations are based on 84 hour work weeks. (12 hour days, 7 days per week).

Monthly base wage: $244 (1530 yuan)

Overall monthly wage (including overtime): $582 (3650 yuan)
Hourly wage: $1.62 per hour (10.13 yuan/hour)

Labor cost per iPhone assembled: $0.27

Recommended living wage: $725 (4537 yuan)
Calculated by Asia Floor Wage for a 48 hour work week.
Recommended Hourly Wage: $3.77 (23.6 yuan)

Recommended labor cost per iPhone assembled: $0.63

Cost difference for assembly labor per iPhone: $0.36
Exchange rate used: $1 = 6.26 yuan

Explanation of Calculations:

iphone-assembly-lines sacom
Young workers assembling iPhones. Credit: SACOM

According to Apple, 1.5 million people work in their supply chain, a third of which work in “final assembly” mega-factories. This means that during the same three months Apple set these financial records, 1 million Apple workers made the parts for these phones and 500,000 put them together.

Workers at one assembly factory make base wages of 1530 yuan ($244) per month (This is the minimum wage in Suzhou, China). With lots overtime, workers can increase these earnings to roughly 3650 yuan ($582) per month, according to a 2014 investigation by Students and Scholars Against Corporate Misbehaviour (SACOM). This was at Pegatron, one of Apple’s main suppliers in China, which handles the final assembly of Apple’s iPhones. Other final assembly plants include Foxconn and Quanta.[1]

The living wage in China, as calculated by the Asia Floor Wage in 2013, is approximately 4537 yuan ($725 USD, PPP). This is based on working 48 hours per week at a rate of about $3.77 per hour.

However, workers in Apple’s supplier factories, do not work 48 hours per week, especially during peak production times.  SACOM’s investigation found that some workers at Pegatron worked for 10 weeks without a rest day and often for 12-15 hours a day, sometimes up to 17-18 hours a day. This means that during peak production time, workers at Pegatron were working between 84 and 105 hours per week. This is more than double a typical workweek around the world.

Taking a conservative estimate of (12 hours/day, 30 days per month) workers earn approximately 10.13 yuan/hour, or roughly $1.62 per hour. This is less than half the recommended living wage of about 3.77 per hour.

According to a 2008 study published by MIT’s Sloan school of Business, which looked at the value chain of iPods, the assembly time required for one device was 10 minutes, or six iPods per hour. Which means, if comparable, the cost of labor per iPhone assembled is roughly 27 cents.[2]

Apple’s profit margin, or the money in pure profit it makes on every iPhone sold, is 39.9%, according to BBC. The industry average for consumer electronics is below 10%, according to Standard & Poor’s. The iPhone 6 costs between $199 and $749 at Apple’s online store, which means that depending on which phone you buy and the amount of storage you elect, Apple could be pocketing somewhere between $79 and $299 in profit. Apple’s margins are high for any sector, let alone a sector that requires the work of millions of human beings to make a product.  The per piece labor of just $0.27 (for assembly) helps explain how Apple is able to achieve these remarkable margins.

Labor is one of the highest costs that any business will incur in any sector. One of the reasons, and usually the primary reason, a business may choose to manufacture in one particular country is the relative “cheapness” of labor costs there—meaning low wages. But at what point does the pursuit of lower wages move from a “savvy business scheme” to full-on exploitation?

In China, where Apple’s iPhones are made, wages are relatively low. So low in fact that workers must rely on overtime pay to get by. Electronics brands argue that workers like to work overtime so they can save for their future, but if workers base wages were raised to provide a living wage to begin with, would they elect to work such exhausting hours?

In these mega-electronics factories, there are typically 2 shifts, day and night. Workers either work 12 hours during the day, or 12 hours straight through the night. This often does not include time that workers may need to dress/undress, pass through security, or attend pre- or post-shift meetings. With either shift, little time is left over for recreation, personal development, or even rest.

bbc sleeping workers 2
Exhausted from long shift, many workers fall asleep on the job. Credit: BBC Panorama

In fact, in a recent BBC expose of Pegatron, one of the most apparent problems was the amount of workers falling asleep on the job, some while operating or working near dangerous equipment.

A recent letter written by nine non-profit and workers organizations called on brands to address the poverty wages in the manufacturing sector by paying “living wages, according to a credible benchmark, throughout their operations and supply chains… and structur[ing] their business relationships with suppliers, both in terms of price and volume, in such a way that living wages can feasibly be paid.” For electronics in China, this would mean paying the living wage for 48 hours of work–not poverty wages that rely on excessive overtime to get even close to this figure.

$1.62 per hour, or less, is just too little to compensate someone who works six+ days a week, for 12+ hours a day, in exhausting and often dangerous conditions. As documented by Green America and allies, toxins are prevalent in Apple supplier factories (many of which are suppliers for Apple’s competitors as well), and workers are developing cancer and other devastating diseases as a result.  Apple announced in 2014 that it would ban two harmful chemicals in its final assembly plants to protect workers, however, there are hundreds of hazardous chemicals used in electronics manufacturing, particularly at parts and semiconductor manufacturers.

36 cents
36 cents, the amount it would cost Apple per iPhone to pay final assembly workers a living wage

The trade-off workers in these factories must make for these meager wages is one that arguably no worker in the United States would willingly accept.

So when does the pursuit of lower wages move from a “savvy business scheme” to full-on exploitation? In the case of Apple, who made $18 billion in profit last quarter and who could spend just 36 cents more per iPhone to ensure living wages, it’s painfully clear it has crossed this line. And what better company to fix this error than the most profitable company in the history of the world?

[1] In 2012, the New York Times did a thorough job analyzing workers hourly wages at Foxconn, another final assembly factory.

[2] This estimation is imperfect. It does not include the cost of labor further down the supply chain, at parts manufacturing plants. (Though the MIT study estimates these workers earn even less than assembly workers, due to greater competition among parts manufacturers). It also bases the assembly time required on iPods, not iPhones. Finally, it relies on exchanging yuan to US dollars, a rate that is not constant. ($1=6.26 yuan was the exchange rate at the time of writing.)