Before Apple became the world's first private sector company to be worth $1 trillion earlier this month, CEO Tim Cook announced $100 billion worth of stock buybacks.
The move concerned consumer advocate Ralph Nader, who earlier this year, wrote Cook an open letter raising questions about the company's buyback strategy — questions such as who was consulted for the decision, and who stood to profit most.
In an interview with NPR's Scott Simon on Weekend Edition Saturday, Nader voiced his concerns once again, expressing disapproval of how Apple is spending its excess billions.
"It could have been used to increase [the number of] employees. It could have been used to shore up the pension fund," Nader says of the money Apple spent on stock buybacks.
Additionally, Nader says, the money could have been used to improve recycling practices for old phones and computers, productive investment, research and development, or even given back to shareholders in the form of cash dividends.
While Nader does concede that Apple has worked to improve working conditions and create programs for recycling, he says the tech giant could be doing much more.
"The kind of income that the Chinese workers are making, under tremendous pressure by their contractor, is really not a living wage, even in China," Nader says.
When Apple announced earlier this year that it would bring an additional 20,000 jobs to the U.S., it also said it would bring back billions of dollars. Still, Nader says, "While they know how to make enormous money with their overpriced iPhones, they don't know how to productively use it."
As Nader continues to offer suggestions for how Apple can use its profits, he admits that he is not an Apple user — no iPhone, no computer, just his Underwood typewriter.
SCOTT SIMON, HOST:
Companies and corporations are in business to make money for themselves, their workers, their stockholders. But can they make too much? Ralph Nader thinks Apple hit that limit earlier this month when it became the first trillion-dollar publicly traded company in the United States. Mr. Nader wrote a blistering blog post about what Apple is and isn't doing with that money. He joins us now from Connecticut. Mr. Nader, thanks for being back with us.
RALPH NADER: You're welcome, Scott.
SIMON: What's wrong with Apple sitting on all that money?
NADER: Well, they just announced earlier this year - a $100 billion stock buyback adding to previous stock buyback without asking the shareholders, institutional and individual, their opinion or even their approval. So the point I was making is it could've been used to increase employees. It could've been used to shore up the pension fund. It could've been used - 2 percent of it, Scott, to double the income of the serf laborers - 1.3 million Chinese laborers in the contractor that builds the iPhones. It could have had 2 percent of 100 billion to improve the recycling of used computers and phones, which are endangering both the environment and the workers. It could've been put in productive investment. It could've been put in research and development. It could've been sent to cash dividends back to the shareholder, but no.
SIMON: Just follow up on a couple of points. Apple, I think, would say that, in fact, they have worked strenuously to greatly improve worker conditions in their Asian factories. And they have some pretty ambitious programs about green technology and recycling. Do you accept that?
NADER: Well, they have said that, and they've done a little of that. But they're starting from a very low base. The kind of income that the Chinese workers are making under tremendous pressure by their contractor is really not a living wage, even in China. And certainly, you know, NPR has reported on how the corporations demanded the tax cuts from Trump and the Republican Congress last year. Why did they demand it? So they could have more capital to engage in productive investment and jobs.
Well, what they didn't admit is if they wanted all this capital, why have they spent $7 trillion - these companies in stock buybacks since 2005 - which is double the federal government's current entire budget if they needed capital for productive investment? Stock buybacks do not create any jobs. They don't create any productive investment. And they're a signal to corporate observers that, while people like Tim Cook know how to make a lot of money for the company, they don't know really what to do with it other than to enhance their own executive compensation package.
SIMON: Still, it's a remarkable turnaround for Apple, isn't it? I mean, just a couple of decades ago, I think they were on the brink of extinction.
NADER: There's no doubt. It was a great turnaround. But under Steve Jobs, stock buybacks were prohibited. He paid himself very little. When Tim Cook came over, everything changed. And while they know how to make enormous money with their overpriced iPhones, they don't know how to productively use it. And Marxists of many decades ago would never have dreamed that corporations would pile up all this capital and not know how to use it productively.
SIMON: Mr. Nader, do you own an iPhone?
SIMON: Apple laptop?
SIMON: On principle or just because you prefer other products?
NADER: One, I want to get a day's work done, so I'm not involved in email and all the nonsense. I'm very available by phone - our office never has voicemail. Human beings answer the phone (laughter). And I use an Underwood typewriter. When the electricity goes out with a thunderstorm, I'm still working, Scott.
SIMON: Ralph Nader, consumer advocate and author of many books, including now the paperback "Breaking Through Power: It's Easier Than We Think". Mr. Nader, thanks so much.
NADER: It is easier than we think. Thank you, Scott. Transcript provided by NPR, Copyright NPR.