Last February, Barack Obama had dinner with Silicon Valley’s top names in California. As part of the dinner, each guest had to ask the president a question.

But when it was Steven P. Jobs of Apple’s turn to speak, President Obama interrupted with a question of his own: What would it take to make the iPhone in the United States?

Not long ago, Apple boasted that its products were all “Made in the USA.” Today, very few Apple products are made in the U.S. Last year, Apple sold 70 million iPhones, 30 million iPads and 59 million other products, nearly all of which were made overseas.

Why not take those jobs back? Mr. Obama asked.

Mr. Jobs’ answer was unequivocal. According to another guest on the panel, Mr. Jobs’ response was, “Those jobs are not coming back.”

The president’s question touched on a core belief at Apple. It’s not just that foreign workers are cheaper. More importantly, Apple management believes that the sheer size of foreign factories and the flexibility, diligence, and industrial skills of foreign workers far exceed those of their American counterparts. As a result, for most Apple products, “Made in the USA” is no longer a viable option.

Apple has become one of the world’s best-known, most admired and most imitated companies, in part because of its relentless global operations. Last year, Apple’s average profit per employee exceeded $400,000, dwarfing that of Goldman Sachs, Exxon Mobil and Google.

Yet, to the chagrin of Mr. Obama, economists and policymakers, Apple, like many of its high-tech peers, has been far less enthusiastic than some of the other big names in their heyday when it comes to creating American jobs.

Apple has 43,000 employees in the United States and 20,000 overseas. Apple’s workforce is a fraction of the more than 400,000 American workers employed by General Motors in the 1950s and the hundreds of thousands employed by General Electric in the 1980s. Apple’s contractors are far more numerous: 700,000 people design, build and assemble iPads, iPhones and other Apple products. But almost none of them work in the United States. Instead, their employers are foreign companies in Asia, Europe and elsewhere, and almost all electronics designers rely on the factories they work for to make their products.

“It’s hard to create middle-class jobs in America today, and Apple is showing why,” said Jared Bernstein, who was White House economic adviser until last year. “If Apple represents peak capitalism, we should be worried.”

Apple management claims that going overseas is their only option at this stage. According to a former Apple manager, when the iPhone was only a few weeks away from its scheduled release date, Apple relied on a Chinese factory to complete its production plan. The reason was that Apple temporarily changed the design of the iPhone screen and had to make a comprehensive adjustment to the assembly line. The new screens were not delivered to the assembly factory until nearly midnight.

According to the manager, a factory foreman immediately woke up 8,000 workers in the company dormitory, gave each worker a packet of biscuits and a cup of tea, and ordered them to go to the workshop. In less than half an hour, the 12-hour work shift of installing glass screens on tilted mobile phone shells began. In less than 96 hours, the factory was already producing iPhones at a rate of more than 10,000 units a day.

“The speed and flexibility of that plant is astounding,” the executive said. “No other American plant can match it.”

Almost all electronics companies can tell similar stories, and outsourcing has become a common practice in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

Apple’s case, while far from an isolated one, offers a window into why the success of some prominent companies doesn’t generate a large number of domestic jobs. Beyond that, the company’s decisions raise broader questions about the responsibilities of American business to the American people as the global and domestic economies become increasingly integrated.

“Corporate America once felt it had a responsibility to support American workers, even if it wasn’t the best option financially,” said Betsey Stevenson, who was the Labor Department’s chief economist until last September. “That notion is gone, and profits and efficiency trump generosity.”

Companies and other economists say that is naive. Executives say that while Americans have some of the best-educated workers in the world, the country is no longer training enough mid-skilled workers to fill factories.

Companies argue that to thrive, they can only move jobs to places where profits are high enough to sustain innovation. Otherwise, there is a risk that American jobs will be further lost over time. Case in point: many of the once-mighty American manufacturing giants, including General Motors, have shrunk as nimble competitors have emerged.

The New York Times provided Apple with a detailed outline of the report, but the famously secretive company declined to comment.

This report is based on a large number of interviews, including nearly 40 former or current Apple employees and contractors, many of whom asked to remain anonymous for fear of losing their jobs. In addition, the report also interviewed economists, manufacturing experts, international trade experts, technology analysts, academic researchers, Apple suppliers, competitors, partners and government officials.

Some Apple executives have privately said it’s a mistake to measure the company’s contribution solely by headcount, given how dramatically the world has changed, and they point out that Apple has more workers in the U.S. than ever before.

They say Apple’s success has boosted the U.S. economy by creating business opportunities for entrepreneurs and more jobs at companies like cellphone carriers and those that ship Apple products. They also say that, ultimately, it’s not their job to eliminate unemployment.

“We sell iPhones in more than 100 countries and have no obligation to fix America’s problems,” said a current Apple executive. “Our only obligation is to make the best product possible.”

In 2007, a little more than a month before the iPhone was due to hit stores, Mr. Jobs gathered a small group of his staff into an office. For weeks, he had been carrying a prototype of the device in his pocket.

Mr. Jobs angrily held up the prototype, angling it so that everyone could see the dozens of tiny scratches on the plastic screen, and then he pulled his keys from his jeans pocket, according to one attendee.

He told the audience that people carry their phones in their pockets, and they put their keys in them. “I don’t want to sell a product that scratches,” he said fiercely. The only solution was to replace it with glass that wouldn’t scratch. “I want a glass screen, and it has to be done in six weeks.”

A manager who was present at the meeting walked out of the room and booked a flight to Shenzhen. Since Mr. Jobs had asked for “getting it done,” they had no choice but to go to Shenzhen.

For more than two years, Apple worked on the project, code-named Purple 2, with the same questions recurring at every stage: How do you reinvent the concept of a phone? How do you design a phone that is of the highest quality — with a screen that won’t scratch, for example — while also making it cheap enough to ship by the millions quickly and profitably?

In almost every discussion, the answer lies outside the United States. While the components of an iPhone vary by model, all iPhones contain hundreds of parts, and an estimated 90 percent of them are produced overseas. High-tech semiconductors come from Germany and Taiwan, memory comes from South Korea and Japan, displays and circuit boards come from South Korea and Taiwan, chipsets come from Europe, rare metals come from Africa and Asia, and assembly takes place in China.

In its early days, Apple typically looked for factories in its own backyard. For example, the company launched the Macintosh desktop computer in 1983, and years later, Mr. Jobs boasted that it was “a truly American-made machine.” In 1990, Mr. Jobs was still running NeXT, which Apple later acquired. At the time, he told a reporter, “I’m proud of our computers, and I’m equally proud of our factories.” As late as 2002, Apple executives would occasionally drive two hours northeast of headquarters to Elk Grove, California, to inspect the company’s iMac factory.

Yet by 2004, Apple had already moved much of its manufacturing overseas. The man leading the effort was Timothy D. Cook, Apple’s operations expert, who succeeded Mr. Jobs as chief executive last August, six weeks before Mr. Jobs’s death. In 2004, when most American electronics companies had already moved overseas, Apple, struggling to survive, decided it had to take advantage of every advantage it had.

Asia is alluring in part because semi-skilled labor is cheap there. But that’s not what attracted Apple. For high-tech companies, the bulk of their expenses are sourcing parts and managing a supply chain of components and services from hundreds of companies, making labor costs a small fraction of the cost.

A former Apple executive said that, as Mr. Cook sees it, the decision to focus on Asia “comes down to two reasons.” Factories in Asia “can scale up and down faster,” while “the supply chain in Asia is stronger than in the U.S.” The result, the former executive said, is that “at this stage, we can’t compete.”

The superiority of the above conditions became immediately apparent in 2007, when Mr. Jobs made the request for a glass screen.

For years, mobile phone manufacturers have been reluctant to use glass screens because it requires precise cutting and polishing, which is very difficult to meet standards. Apple has selected Corning Inc. in the United States to produce large sheets of strengthened glass. However, to cut the glass sheets into millions of iPhone screens, it is necessary to find an idle cutting factory, hundreds of experimental glass sheets and a large number of mid-level technicians. The preparation work alone will cost a lot of money.

Just then, a Chinese factory came to bid for the job.

When the Apple inspection team arrived at the Chinese factory, the factory owners had already started building a new plant. A former Apple manager recalled that the factory manager explained, “This is preparation in advance, so that your order will not catch us off guard.” The Chinese government has previously promised to provide cost subsidies for many industries, and the glass cutting factory has also taken a share of it. They have a warehouse full of glass samples and can provide free samples to Apple. The factory owners also promised to provide technicians at almost no cost. They have built dormitories in the factory, and employees can be on call 24 hours a day.

The Chinese factory got the order.

Another former Apple executive said, “The entire supply chain is now in China. Need 1,000 rubber washers? There’s a factory next door. Need a million screws? It’s a block away. Need a little change to a screw? It’s done in three hours.”

An eight-hour drive from the glass factory is a sprawling complex known as Foxconn City, where iPhones are assembled. To Apple executives, Foxconn City is further evidence of China’s ability to provide better workers and a more diligent attitude than its American counterparts.

The reason is that there is nothing like Foxconn City in the United States.

The complex has 230,000 employees, many of whom work six days a week, often for 12 hours a day. More than a quarter of Foxconn employees live in company dormitories, and many workers make less than $17 a day. An Apple manager once entered the factory during a shift change and his car got stuck in the stream of employees. “The scale of this is unimaginable,” he said.

Foxconn hired nearly 300 security guards to direct the flow of people on foot so that workers would not be blocked in the narrow area at the entrance. The main cafeteria of the factory consumes an average of 3 tons of pork and 13 tons of rice every day. Although the factory is spotless, the teahouses nearby are filled with smoke and the stench of tobacco.

Foxconn Technology has dozens of factories in Asia, Eastern Europe, Mexico and Brazil, and assembles an estimated 40% of the world’s consumer electronics for companies like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony.

“They could hire 3,000 people overnight,” said Jennifer Rigoni, who worked as Apple’s global supply and demand manager until 2010 but declined to discuss the details of her job. “What American factory could hire 3,000 people overnight and convince them to live in dormitories?”

In mid-2007, after a month of experimentation, Apple technicians finally perfected a way to cut sheets of tempered glass into the right size for the iPhone. Trucks carrying the first batch of glass screens arrived at Foxconn City in the dead of night, according to a former Apple executive. Foremen immediately woke up thousands of workers, who hurriedly put on their uniforms—black and white shirts for men, red for women—and quickly formed lines to begin assembling the phones by hand. In less than three months, Apple had sold a million iPhones. Since then, Foxconn has assembled more than 200 million iPhones.

In its statement, Foxconn declined to comment on specific customers.

The company said in a written statement that “all employees recruited by the company sign contracts that outline various terms and working conditions and are protected by China’s labor laws.” Foxconn “takes its responsibilities to its employees seriously and strives to provide a safe and beneficial working environment for its more than one million employees.”

Foxconn disputed some of the details given by the former Apple manager, and said in a written statement that the so-called midnight shift did not exist “because we have established strict regulations for the working hours of employees in different shifts. All employees have electronic time cards and it is impossible to work in the factory outside of the specified shift.” The company also said that all shifts start either at 7 a.m. or 7 p.m., and that if there are any changes, the company will notify employees at least 12 hours in advance.

When interviewed, Foxconn employees questioned the company’s claims.

Another crucial advantage for Apple is that China can provide a large number of technicians, which is far beyond the reach of the United States. According to Apple management’s previous estimates, the production of iPhones will eventually require 200,000 assembly line workers, and about 8,700 industrial technicians will be needed to supervise and guide them. Apple analysts estimate that it will take up to nine months to find so many qualified technicians in the United States.

Once we got to China, it only took 15 days.

Martin Schmidt, vice provost at the Massachusetts Institute of Technology, said companies like Apple “claim that the difficulty in building factories in the United States is finding skilled workers.” Specifically, they say they need technicians with more than a high school education, but not necessarily a bachelor’s degree. Executives insist that such skills are hard to find in the United States. “These are very good jobs, and there are not enough people in the United States to fill them,” Mr. Schmidt said.

The iPhone has some uniquely American features, including its software, and its novel marketing is largely American. Apple recently opened a $500 million data center in North Carolina. Key semiconductors for the iPhone 4 and 4S are supplied by Samsung of South Korea and manufactured at a plant in Austin, Texas.

However, these facilities do not offer a large number of jobs. For example, Apple’s North Carolina center has only 100 full-time employees. Samsung’s Austin factory is estimated to have only 2,400 workers.

“Even if you go from selling 1 million phones to 30 million, you don’t need more programmers,” said Jean-Louis Gassée, who ran product development and marketing at Apple until he left in 1990. “All the new companies have learned this, Facebook, Google and Twitter. They’ve grown without hiring as many people.”

It is difficult to estimate how much it would cost to produce iPhones in the United States. However, according to estimates by several scholars and manufacturing analysts, since labor costs are negligible for high-tech manufacturing, paying American standard wages would increase the cost of each iPhone by up to $65. Given that Apple often makes hundreds of dollars in profit from each phone, in theory, Apple can still get quite good returns even if it produces phones in the United States.

Yet such analysis is meaningless in many ways, because making phones in the U.S. requires more than hiring Americans. It requires restructuring the U.S. and global economies. Apple executives argue that the U.S. simply doesn’t have the workers it needs, or factories that are fast and flexible enough. Apple partners like Corning also say they must go overseas.

Apple’s glass order gave new life to a Corning plant in Kentucky, where much of the glass used in the iPhone is still made today. After the iPhone’s success, Corning was flooded with orders from companies eager to copy Apple’s designs. Its annual sales of strengthened glass grew to more than $700 million. To meet the new demand, the company hired or retained about 1,000 U.S. employees.

However, as the market expands, Corning has transferred most of its tempered glass production to factories in Japan and Taiwan.

“We have customers in Taiwan, South Korea, Japan and China,” said James B. Flaws, Corning’s vice chairman and chief financial officer. “We could make the glass in the United States and ship it there by ship, but that takes 35 days. We could also ship it by air, but that costs 10 times as much. So we built our glass plants next door to assembly plants that are located overseas.”

Corning was founded in the United States 161 years ago and is still headquartered in upstate New York. In theory, the company could make all its glass domestically. But that, Mr. Frost said, “would require a complete restructuring of the industry. Consumer electronics has become an Asian business. As an American, I’m concerned about this, but I can’t stop it. Asia has taken over the United States for the past 40 years.”

When Eric Saragoza first stepped into the Apple factory in Elk Grove, California, he felt like he had entered an engineering wonderland.

It was 1995, and the factory near Sacramento employed more than 1,500 workers. The plant was a kaleidoscope of robotic arms, conveyor belts carrying circuit boards, and finally colorful Apple computers in various assembly processes. Mr. Zaragoza, a technician, quickly rose through the ranks and soon joined an elite team responsible for diagnosing product problems, with his salary increased to $50,000. He and his wife had three children and bought a house with a swimming pool.

He said, “At that time, I felt that my education was not in vain. I knew long ago that the world needs people who can make things.”

Meanwhile, the electronics industry was changing. Apple was struggling to reinvent itself as sales of its products waned. A few years into Mr. Zaragoza’s tenure, his boss talked about the disadvantages of the California factory relative to those overseas: It cost $22 to make a $1,500 computer in Elk Grove, excluding raw materials, compared with $6 in Singapore and $4.85 in Taiwan. The difference was not primarily due to wages but to costs like warehousing and the speed at which workers could complete tasks.

“Our boss told us we had to work 12 hours a day and Saturdays too,” Mr. Zaragoza said. “But I have a family and I want to see my kids play football.”

The process of modernization always causes some jobs to change or disappear. The U.S. economy first transformed from agriculture to manufacturing, and then to other industries. During this period, farmers became steel workers, and then became salesmen or middle-level managers. Such transformations have brought many economic benefits. Generally speaking, even unskilled workers can get higher wages and greater opportunities for advancement through each transformation.

Yet economists say something more fundamental has changed over the past two decades. Middle-income jobs have begun to disappear. Today’s new jobs are disproportionately concentrated in service jobs such as restaurant clerks, telephone operators, hospital nurses and temporary handymen, which offer few opportunities to move up to the middle class. This is especially true for Americans without college degrees.

Even Mr. Zaragoza, who has a college degree, couldn’t resist the momentum. At first, Mr. Zaragoza didn’t mind shipping some of the routine work at Elk Grove overseas. Then artificial intelligence devices turned Apple into a futuristic playground, giving management the opportunity to replace workers with machines. The company sent some of the problem diagnosis work to Singapore. The middle managers who managed the factory’s inventory were laid off because the company suddenly realized that a few people connected to the Internet were enough.

Mr. Zaragoza was too expensive to be assigned unskilled work. At the same time, he was not qualified for a top job. After a night shift in 2002, his bosses called him into a small office, fired him, and sent him out of the factory. He taught high school for a while, then tried to get back into the tech industry. By then, however, Apple, which had helped the region earn the nickname “Silicon Valley of the North,” had converted much of the Elk Grove plant into a customer service call center, where new employees were typically paid just $12 an hour.

There are job opportunities in Silicon Valley, but they haven’t materialized. “What they really want is someone in their 30s with no kids,” said Mr. Zaragoza, 48, who has five children.

After months of job hunting, he felt desperate. Even teaching jobs were no longer available. So he took a job at an electronics temp agency that Apple hired to repair returned iPhones and iPads before returning them to customers. Every day, Mr. Zaragoza drove to the building where he worked as a technician, where he scrubbed thousands of glass screens and plugged in headphones to test audio ports for $10 an hour with no benefits.

As Apple’s overseas business and sales have expanded, company executives have also made a fortune. In the last fiscal year, Apple’s revenue reached $108 billion, more than the combined budgets of Michigan, New Jersey and Massachusetts. After the stock split in 2005, Apple’s stock price has risen from about $45 to more than $427.

Some of that wealth has gone to shareholders. Apple stock is one of the most widely held stocks, and the high share price has benefited millions of individual investors, 401(k) funds and pension funds, and has also enriched Apple workers. In the last fiscal year, Apple employees and managers received more than $2 billion in stock in addition to their salaries, and the total value of stock and options that were cashed in or effective reached $1.4 billion.

However, the biggest beneficiaries are usually Apple’s top executives. Last year, Apple CEO Mr. Cook received a large number of stock grants that will be gradually effective within 10 years. Based on the current stock price, these stocks are worth $427 million. In addition, his salary has also increased to $1.4 million. Apple’s securities disclosure materials show that in 2010, Mr. Cook’s total compensation package was worth $59 million.

A person close to Apple said that Apple employees are paid fairly, in part because the company creates so much value for the U.S. and the world. As its business has grown, the company has expanded its domestic workforce, including in manufacturing. Last year, Apple added 8,000 employees in the U.S.

While other companies have moved their call centers overseas, Apple has kept its call centers in the United States. One source estimates that sales of Apple products have led to the hiring of tens of thousands of Americans by other companies. FedEx and UPS, for example, claim that they have created more American jobs because of the volume of shipments of Apple products. However, neither company would provide specific numbers, saying that they would need Apple’s permission, which Apple has refused to provide.

A current Apple executive said, “We are not to blame for hiring Chinese workers because the United States can no longer provide the talent we need.”

Beyond that, Apple sources say the company has created a large number of good jobs for Americans, both in its retail stores and in businesses that sell iPhone and iPad apps.

After two months of testing iPads, Mr. Zaragoza quit. He figured that rather than put up with such low pay, he could spend his time looking for another job. On a recent October evening, Mr. Zaragoza sat down at his Apple laptop and posted another round of resumes online. Meanwhile, halfway around the world, a woman walked into his office. Lin Lina was a project manager at the Shenzhen branch of PCH International, a company that had contracts with Apple and other electronics companies to coordinate the production of accessories, such as protective covers for iPad glass screens. Ms. Lin was not an Apple employee, but she played an integral role in Apple’s production capabilities.

Ms. Lin’s salary is slightly less than Mr. Zaragoza’s when he was employed by Apple. She learned to speak fluent English through watching TV and education at a Chinese university. Every month, she and her husband put a quarter of their salary into the bank. The couple lives in a 108-square-meter apartment with their son and in-laws.

“There are so many job opportunities,” Ms. Lin said, “especially in Shenzhen.”

At the end of Mr. Obama’s dinner with Mr. Jobs and other Silicon Valley executives last year, as everyone stood up to leave, a group of people gathered around the president, and a smaller group gathered around Mr. Jobs. Rumors had spread that he was getting sicker, and some wanted to take a picture with him, perhaps for the last time.

In the end, the two men came together. “I’m not worried about the long-term future of this country,” Mr. Jobs told Mr. Obama, according to one observer. “This country is great. I’m just worried that we’re not talking thoroughly enough about solutions.”

At one point, for example, executives suggested that the government change visa policies to make it easier for companies to hire foreign technicians. Some urged the president to give companies a “tax holiday” so they could bring back foreign profits, saying they would use them to create jobs. Mr. Jobs even suggested that Apple might one day move some of its high-skilled manufacturing operations back to the United States if the government would help train American technicians.

Economists debate the effectiveness of these and other measures, noting that sometimes unexpected developments can turn a struggling economy around. The last time analysts worried about high unemployment in the U.S., for example, was in the early 1980s, when the Internet barely existed. Few could have imagined that a degree in graphic design would quickly become a savvy bet, while telephone repair would become a dead-end profession.

However, it remains unknown whether the United States can turn future technological innovations into millions of jobs.

Over the past decade, technological leaps in solar power, wind power, semiconductor manufacturing, and display technology have created thousands of jobs. Many of these industries originated in the United States, but most of the jobs have gone abroad. Companies are closing large facilities in the United States in order to reopen in China. The company management says they are doing this to compete with Apple for investors. If they can’t keep up with Apple’s growth and profit margins, they won’t survive.

“New middle-class jobs will eventually emerge,” said Lawrence Katz, an economist at Harvard University. “But do people in their 40s have the skills to win them? Will they be scooped up by recent college graduates and never make it back into the middle class?”

Executives from a variety of industries say that businessmen like Mr. Jobs have accelerated the pace of innovation. In the past, General Motors would wait as long as five years before making major changes to its models. Apple, on the other hand, has introduced five iPhones in four years, doubling the speed and memory of the phones while lowering the price for some users.

Before saying goodbye to Mr. Obama, Mr. Jobs pulled an iPhone from his pocket to show off an incredibly detailed app: a driving game. The phone reflected the soft light in the room as other executives, worth a combined total of more than $69 billion, scrambled to see the game over his shoulder. All of them said it was amazing.

There is no scratch on the phone screen.