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How Donald Trump Got Everything Wrong About Apple in One Sentence

Donald Trump, the billionaire and leading Republican candidate for president of the United States, says he wants Apple, the biggest technology company in the world by market valuation, to make its computers and other products in America. It made for a good sound bite, but it betrayed a deep ignorance of how the tech economy actually works and the role of American workers in it.

Speaking at Liberty University, the Christian institution founded by the Baptist TV evangelist Jerry Falwell in Lynchburg, Va., (see the full video at c-span.org) Trump cited Apple in one of the blunt, sweeping statements for which he has become known on the campaign trail:

I was saying make America great again, and I actually think we can say now, and I really believe this, we're gonna get things coming … we're gonna get Apple to start building their damn computers and things in this country, instead of in other countries.


Donald Trump
Brian Snyder | Reuters
Donald Trump

It's hard to quantify exactly how much Trump gets wrong with that one statement, and how little power he will have, if elected, to do what he says. If he means what he says, he is ignorant about how many American workers, both at Apple and other companies, participate in the creation of "Apple's computers and things," including its Mac line of personal computers as well as the iPhone, iPad and Apple Watch. The company's products are, if anything, an example of the engine of American technical supremacy chugging along at a job-creating pace that is the envy of the world.

Trump's aim, he says, is to get Apple to "make" its products in America again. Let's start there: Trump is correct that Apple's products, for the most part, aren't assembled in American factories, and haven't been for years. His wish to change that hearkens back to visions of blue-collared American workers doing the sort of assembly-line work that the American consumer electronics industry abandoned decades ago, first for plants in Mexico and then in Taiwan and China. Under current conditions, which are highly unlikely to change no matter who is president, the job of assembling iPhones and iPads and other consumer electronics is now done mostly in China.

There's one big exception that I know about: Apple's high-end desktop machine, the Mac Pro, is assembled in Austin, Texas. Apple CEO Tim Cook tweeted about it while on a visit there in 2014:

Any honest presidential candidate regardless of party should say clearly and indeed proudly that America doesn't want these jobs to come back. Final assembly jobs are low-skilled, low-paying occupations; no American would wish to support a family on what the jobs would pay. Workers at China's Foxconn, which manufacturers the iPhone, make about $402 per month after three months of on-the-job probation. Even at the lowest minimum wage in the U.S. — $5.15 an hour in Wyoming — American workers can't beat that.

In addition, no American consumer would want to pay the resulting price for the iPhone or iPad. This is equally true of Apple as it is of other U.S.-based computer companies like Dell and HP.

China, on the other hand, has spent decades building much of its economy around attracting these jobs because of the massive size of its labor force, and a massive multi-billion dollar, multi-country supply chain has sprung up in Asia to support it. No American president can ever or will ever change this, nor should we want them to.

In 2011, researchers at the University of California at Berkeley found that for every iPad or iPhone manufactured, workers in China added $10 or less to the value of that device. On an iPad, they found that American workers add $162 worth of value, and on an iPhone it was more than twice that much. (Here's a PDF of their paper.)

Let's start with semiconductor manufacturing. Many American workers have jobs building chips that go into Apple's many products. For instance, Intel, at the close of its 2014 fiscal year, had nearly 107,000 employees, more than half of which were located in the U.S. It sold nearly $35 billion worth of chips that are the primary computing engine in Apple's computers and another $14 billion worth of chips that went into servers used to run Internet services like Apple's iCloud and Google's Gmail, and — while we're at it — Facebook and Twitter, too.

Intel's chips are arguably the most complex piece of technology ever devised by the human mind, and manufacturing them is a hugely expensive and complex process. The majority of its manufacturing footprint — about 70 percent of it — is at plants in Arizona, New Mexico, Oregon and Massachusetts.* One factory is in Israel, and some of Intel's less-sophisticated chips are turned out by plants in China, but for the most part, Intel chips are American-made.

Now let's turn to the iPhone and iPad. The primary chips in each are the Apple A9. Designed by Apple's own internal engineers, the chips are manufactured not by Apple, but by Samsung of South Korea. But where are the chips built? Some in Korea, yes, but a significant portion — we don't know the precise mix — are built by American workers at a huge Samsung plant in Austin, Texas, while more may come from a GlobalFoundries factory in East Fishkill, New York.

Don't confuse chipmaking with phone-assembling, either. Both are done on an assembly line, but chipmaking is one of the most complicated and specialized jobs human beings can do. Final assembly is mind-numbing and requires no skills other than having working fingers.

The outsides of the iPhone and iPad are American-made too. The shatter-resistant glass that you touch every time you use one is a product called Gorilla Glass. It was invented in America and is made by American workers at a company called Corning with plants in Kentucky and New York.

All in, Apple directly employs about 76,000 people in the U.S., and its demand for components and other things needed to build its products supports another 361,000 U.S. jobs. Then there's software: By Apple's own reckoning, as of 2014 there were 627,000 people working in jobs related to the ecosystem around iPhone and iPad apps that have generated more than $8 billion in revenue. And let's not forget that the first iPhone debuted in 2007. That means that, as recently as 10 years ago, these jobs didn't exist.

And why is Trump singling out Apple anyway? If he's going to obsess about where personal computers are built, shouldn't he be equally concerned about where American outfits Dell and HP build theirs? Chances are, they're built by a mix of Taiwanese suppliers with names like Foxconn, Compal, Wistron, Quanta and Inventec. And in most cases they're built using American-made chips from Intel and running American-made software from Microsoft.

So the next time Donald Trump or any other presidential candidate points to the tech industry as the reason for the decline of American manufacturing, don't believe it. When it comes to understanding technology, as he has proven time and again, Trump doesn't know what he's talking about.

*Update: Since this piece was first published I've since learned that Intel shut down a plant in Hudson, Mass. last year and after failing to find a buyer decided to tear it down.

By Arik Hesseldahl, Re/code.net.

CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.