Dear Parent —
The phone in your child’s hand passed through my hands at a margin of $0.227 per unit. Melugin wrote in National Review this week that parents, not governments, are the answer to whatever the kids are feeling on their screens, and that the market has already built you the tools. She’s correct that the tools exist. She hasn’t yet met the hands the tools are built on. Let me walk you down the line.
Yusuf is a hand on the smartphone refurbishment bench I own in eastern Tennessee. He’s 24. The phone your child is holding right now passed through his — the one you bought to end the argument, the one whose parental controls you haven’t turned on, because you’ve decided, with some relief, that the device is the heavy now. He wiped it, tested it under a microscope for 90 seconds per unit, replaced the screen if the previous owner cracked it, reboxed it, and sent it on. He’s done this for 31 months. His thumbs haven’t stopped cramping since his second year. The microscope work’s had him squinting by lunch. The rosin-core flux he breathes to reseat the charge port has been his afternoon companion since the same month.
Now watch what the margin buys me. The fume extractor I didn’t install at his bench costs $340. The rosin mask he doesn’t have costs $2.60 per shift. The anti-fatigue mat his knees have been asking for since March costs $22. The annual vision exam his squinting has earned costs $80. Add the four items. Add them slowly. $444.60 per refurbishment hand, per year. The hand refurbishes 1,955 phones in that year, before breakage and PTO. Divide. The margin I keep per phone is $0.227.
A unit, by which I mean a 24-year-old whose thumbs won’t close by Friday.
I kept the $340. I kept the $2.60 a shift. I kept the $22. I kept the $80. By their fruits ye shall know them. Mine are dividends.
Here’s the part the op-ed left out, because Melugin writes for parents and the parents fund my margin. The phone your child is holding is not a parenting tool. It’s a supply-chain product in an industry whose margin lives in the gap between what parents pay and what the refurbishment hand is allowed to cost. The KIDS Act doesn’t interrupt this gap. The parental controls Apple sold you don’t interrupt this gap. The market failure Melugin’s asking you to spot isn’t on your child’s screen. It’s between your hand at the register and Yusuf’s hand at the microscope, and the gap is exactly $0.227 per phone that I keep.
Six time zones upstream, the same arithmetic runs. Solange is a sorter at the cobalt washing table I operate through a Kinshasa holding. She’s 19. The cobalt she sorts by hand, with a wooden paddle and a bucket of water, ends up in the battery that ends up in the phone your child is holding. She earns $4.20 a day. The PPE she doesn’t have would cost the operation $0.42 a day. $0.42. I spent $4.75 on a cortado this morning. I’m holding it now. Solange is Yusuf with a passport and a different century of tooling. The phone is the same phone. The chain doesn’t change for you.
Widen the frame with me a moment. James Henry Hammond told the United States Senate in 1858 — and I keep the speech on my office wall, because it is honest history —
“In all social systems there must be a class to do the menial duties, to perform the drudgery of life. That is, a class requiring but a low order of intellect and but little skill. Its requisites are vigor, docility, fidelity. Such a class you must have, or you would not have that other class which leads progress, civilization, and refinement.”
He named them by color. I have named them by class. The class has not changed. The drudgery has not changed. The requisites have not changed. What has changed is which side of the screen the parent is told to be on, and which side the refurbishment hand is on, and which side the cobalt sorter is on, and that all three sides are connected by a margin I keep and you fund. I am not new. I am the oldest arrangement there is, wearing this decade’s vocabulary. The KIDS Act, the parental controls, the public panic about the screens — these are the brief, expensive interruptions. The interruptions are ending.
Yusuf’s thumbs will not close by Friday. Solange’s paddle will not stop tomorrow. The phone in your child’s hand will be in another child’s hand in 18 months, and will pass through another refurbishment bench that I or someone like me will own. The chain does not know your name. I have the margin forecasted through 2031.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.