Print 24 comment(s) - last by jtesoro.. on Jun 22 at 11:07 PM

Workers welfare comes into question

Several weeks ago, reports were rampant about Foxconn, also known as Hon Hai Precision Industry Company, employees being severely underpaid but having to work just as hard as workers in any other parts of the world. In fact, reports said that some of Foxconn's employees that were part of manufacturing Apple products were being paid a $50 per month.

Shortly after the reports began circulating, Foxconn said that its factory in Longhua, China, does not put its workers at harm and does not sacrifice living standards for cheap labor. The company further said that most of its employees are given housing. There was no response from Apple for a few days but the company did issue a statement that it would investigate the matter further.

According to Apple, the company is extremely strict about its manufacturing partners and its code of conduct. Apple said that it will be interviewing workers that work at Foxconn's factories and said that it will not tolerate non-compliance to industry standards. Apple's own policy indicates:

Suppliers must pay wages, benefits, and overtime to workers in accordance with applicable laws, including those related to minimum wages, overtime, hours, and legally mandated benefits. Suppliers may not discriminate based on race, colour, gender, sexual orientation, ethnicity, religion, political affiliation, or marital status. The basis on which workers are being paid must be clearly conveyed to them in a timely manner.

This is not uncommon for Chinese manufacturing facilities.  At most of these factories, workers are required to live "on-campus" and share a dorm with several other employees of the same gender.  Room and board are taken out of the employee's salary and as such, the workers are typically left with $50 to $100 per month.  Whether or not this is substandard to foreign eyes, it is the standard model in China -- every facility operates this way whether the plant manufactures iPods, motherboards, cars or clothes.

Neither Apple nor Foxconn have issued any further statements. The Longhua factory produces products for many manufacturers including Apple, and makes things such as the iPod.

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Glad to hear
By Quiksel on 6/22/06, Rating: 0
RE: Glad to hear
By kibets on 6/22/2006 9:32:35 AM , Rating: 4
Well.. Apple has been making iPods for what 5 years. And just now they get around to investigating - and only after they have been exposed... Please Quiksel you have got to be kidding!

RE: Glad to hear
By kelmon on 6/22/2006 10:09:32 AM , Rating: 3
It's probably worth bearing in mind the source of the allegation: The Mail On Sunday. As exposures go, it's not exactly a credible source so I'm inclinded to go with the "innocent until proven guilty". Emphasis on the proven part there, kids...

There's enough articles debunking the original article kicking around.

RE: Glad to hear
By Quiksel on 6/22/2006 10:48:44 AM , Rating: 1
I will admit that I needed a little more time to parse the article for what motivating factors are in place for Apple to come out and say what they are saying, BUT, this is still an appropriate action to take considering the allegations. I will say again, KUDOS to Apple for taking on an investigation.

Just because this is happening as a result of someone else bringing it out into the open does not mean that Apple is hiding something, nor does their reaction to the mess imply that they are doing this just to save face. Possible, yes, but not always true.

For once, we might have to take into consideration that conspiracy theory might not be the case.

RE: Glad to hear
By Bonrock on 6/22/2006 6:31:38 PM , Rating: 2
Are you for real? Do you honestly think that Apple employees never once visited one of the factories making the iPod? These factories are churning out millions of iPods every year--companies don't hand out contracts of that size without ever inspecting the facilities.

If you really think Apple deserves kudos over this whole situation, you are frighteningly naive.

RE: Glad to hear
By Griswold on 6/22/2006 9:39:44 AM , Rating: 2
You must be kidding.

RE: Glad to hear
By dice1111 on 6/22/2006 9:58:17 AM , Rating: 2
Wow Quiksel, you need to get a grip on reality. The only reason they are investigating this is because they have been publicly exposed. Apple doesn't even seem to be putting a rush on it. And while they are interviewing the employees it will be business as usual until they can find an appropriate PR resolution with minimal cost and change to their manufacturing process or Foxxcon's hiring practices. I'm sure the reason they outsource to Foxxcon is so this type of thing can happen and Apple is not directly to blame when things hit the fan. They can pawn it of on another company who was setup to be a patsy. In my opinion of course...

RE: Glad to hear
By Shoal07 on 6/22/2006 10:45:39 AM , Rating: 2
You are definitely a little deluded. Why do you think these companies manufacture in China and have tech support in India? Because it’s cheap! China will never try to change that, it’s what is funding their industrial revolution.

Complaining about cheap labor in China... Now that’s a good one!

RE: Glad to hear
By TomZ on 6/22/2006 12:21:41 PM , Rating: 2
Complaining about cheap labor in China... Now that’s a good one!

Even better, probably complaining about cheap labor in China, while at the same time having a house full of products are only affordable because of that labor. Pretty hypocritical if you ask me.

Let's face it - most of us all benefit from the Cheap labor in developing countries. Should we feel guilty for it? Should we try to export our values to these countries and to our manufacturers there? Are we doing more harm or more good by buying goods from these countries? These are interesting questions, I think.

Minimum wage is 810 ? per month
By Eug on 6/22/2006 9:47:03 AM , Rating: 2
"Apple Launches Probe into Foxxcon"

Sounds like part of a Star Trek episode. ;)


Foxconn claims they're paying minimum wage (which is double the US$50 a month claimed by the British article). I'm inclined to believe them, but OTOH, even minimum wage seems a bit low, at 810 yuan (US$101) a month. (Perhaps the $50 might make sense after subtracting room and board, but that's par for the course.) I was guessing 1000 ? (US$125) a month for an electronics tech worker, but obviously that's not the case.

RE: Minimum wage is 810 ? per month
By KristopherKubicki on 6/22/2006 9:55:29 AM , Rating: 2
There's actually a really good program on Discovery channel that reflects my own opinions on the subject. A Nokia factory in Shenzhen was under investigation by an ethics committee. The owner of the plant told the investigators that it was cheaper to pay the fine for not filling minimum wage than to actually pay the workers minimum wage.

All in all after looking at the bill of materials for the devices, the worker wages were less than 0.5% of the total cost of manufacture.

Having been to these factories many times, I'd totally agree that the problem is with the whole system, not just these guys. The unfortunate problem is even with an increase of wages, the companies who own these factories will just move them somewhere else where the workers will work for less.

RE: Minimum wage is 810 ? per month
By bnme on 6/22/2006 12:15:00 PM , Rating: 2
The unfortunate problem is even with an increase of wages, the companies who own these factories will just move them somewhere else where the workers will work for less.

There's a limit however. Cheap labor is only one factor.

There is more to consider than the labor costs when people and companies decide to setup shop in another country. Infrastructure is one of them.

Most people would not open a manufacturing plant in a warn-torn country in Africa, just because you could pay, on average, less for a worker there than a worker in China. They have to consider things such as where they will get their electricity, how good the transportation system is (for their employees and how to ship their goods), and local laws.

There's also the technological factor. Production processes are always being improved to become more efficient, to cut costs (i.e. you don't have to move to China to build your car, when robots are assembling most of your car faster and more efficiently than people).

China and India did not sit still to get into the position they are in now. They opened up, improved their infrastructure, invested in education, and made it favorable for people and companies to come into their country and take advantage of the cheaper labor.

They probably will continue not to sit still. They know that this will not last, that they will not always be the shirt-makers or call-centers of the world. Whatever money they are making now through investments, wages, and exports will have to be invested in giving people and companies other reasons to invest even more into their country (i.e. highly-skilled labor).

By Exodus220 on 6/22/2006 2:17:08 PM , Rating: 2
I really think it is great when the AnandTech guys add their two cents or comments to these. It makes me feel like they are real people because they talk to us, I just like it. Thanks for being there and talking back.

RE: Minimum wage is 810 ? per month
By masher2 on 6/22/2006 10:49:20 AM , Rating: 2
> "even minimum wage seems a bit low, at 810 yuan (US$101) a month"

Its considerably more complex than this. Even at this pay level, such jobs in China are in high demand. Why? Because they're better than the alternatives. Trying to enforce western-level pay scales on Chinese manufacturing would simply result in a lot of Chinese workers either unemployed, or working in even worse, lesser-paid local businesses.

By kattanna on 6/22/2006 1:11:46 PM , Rating: 2
yes..i always love how these "news" stories leave out important details such as large numbers of people living in rural areas are flocking to the cities to get these jobs...

why..not because they are being taken advantaged off..because these jobs are far better opportunites then others that present themselves to these people.

You guys socialist or what?
By Dfere on 6/22/2006 3:14:28 PM , Rating: 2
There is a basic point pretty well missed here in the discussion. Either they are forced to work for these wages, or they choose to. If they are forced to work these wages (directly or indirectly by the government)then your issue should be with the chinese government, NOT FOXCONN. If they have the right to choose, then they chose to work there. If your issue is that workers in China are netting $100 disposable income per month- no one here has said what that compares to in purchasing power in the united states, every one is ASSUMING it is too low. This is a COMMUNIST country, not the US. If you can't own a home (as in a COMMUNIST state), and will always have room and board and the standard of living is decent (goods, food, shelter)- how can you fault the company? Fault the government, or even better, fault the chinese people for not reforming their government's practices. To further bash Apple, (and I own NOTHING APPLE), is absurd.

We are responsible for the society in which we live. Not someone else's society. If the argument is political, it is up to China to change its policies. If the argment is economic, lets not guess at what a fragment of information really means and compare it to terms we are familiar with in a democratic, capitalistic society.

IN the long run, the influx of capital and profits will alleviate the situation- labor in China will get relatively more expensive. It already did in Mexico and then in India. Then Africa will be exploited until the standard of earning their becomes more inline with the rest of the world while the chinese workers scream like Mexican workers recently did.

RE: You guys socialist or what?
By lemonadesoda on 6/22/2006 6:09:53 PM , Rating: 2
...unfortunately that's a rather naiive view. The next thing along that line of thought is that child labour is OK as long as the kids weren't forced to do it. And having 15 year old prostitutes is OK as long as they do it of their own choice. And that its ok to let people starve... its their own fault for not working hard enough... since the influx of capital and profits will always alleviate any economic situation situation. And an alternative to letting your family starve is to go to another city and work and sleep in the factory 24hrs a day AND NOT GET PAID the amount you are contractually and legally obliged to receive... sand this is OK since if you don't like the conditions, you can always leave.

I suggest you switch your college major to economics or law. You could use the help.

RE: You guys socialist or what?
By jtesoro on 6/22/2006 11:07:56 PM , Rating: 2
I think its a matter of where we draw the line, and it will be different for each individual (or corporation). I think the child prostitutes thing is easy.

Child labor I actually thought was easy until I started to define in my mind what it was. Having a kid mow the neighbor's lawn for a few bucks is OK. How about helping to gather crops for the neighboring farm for a week? What if a group of kids decide "hey, why don't we go over to Mr. Smith's farm down the road and earn a few bucks"? What if they ask one of their Dads to front for them because he can better convice Mr. Smith? Maybe Dad starts becoming systematic and starts planning the summer schedule for this "group of kids" so they can "earn a few bucks". For kicks, they later call themselves FarmHelp Company, and Dad gets a portion of the earnings so he can "buy himself some coffee"...

At what point does it become child labor? Each of us may define it differently. The law may have its own definition. But Chinese law is different from US law, and so on.

I don't want to say Apple is right or wrong because I think there's too little information. On one hand maybe it's OK because they might be doing regular (or even random) audits and its just that the Chinese company is able to hide things somehow. On the other hand, Apple may have known but chose to do nothing until things leaked out. Its not even clear what the violation is. The article uses the word "mistreatment", but it doesn't say anything else other than lower wages compared to another factory. I don't think that's mistreatment. I don't think that's against the law either.

RE: You guys socialist or what?
By Bonrock on 6/22/2006 6:45:51 PM , Rating: 3
Lots of companies follow these same practices in China; that's not the real issue here. The real issue is that Apple, a company which claims to be very progressive, is doing it--in violation of their own code of conduct, I might add.

People love to think of Microsoft as evil and Apple as angelic, but the fact is, they're both big corporations--and like all big corporations, they both do a lot of crappy things. I really wish people would stop deluding themselves into thinking that Apple and Google are altruistic companies that care more about doing what's right than about making money.

By Felraiser on 6/22/2006 9:49:49 AM , Rating: 2
Sorry to nitpick, but I'm pretty sure that the name of the company in question is "Foxconn." It's even spelled that way in the linked article.

By Exodus220 on 6/22/2006 9:54:53 AM , Rating: 2
Haha, I am pretty sure it isn't Foxcomn as spelled in the first paragraph. But then again I am not a journalist and computers are just a hobby for me, so I could be wrong.

By masterlucas on 6/22/2006 10:08:09 AM , Rating: 2
Companuy - this is the new abbreviation?

RE: Companuy
By ss284 on 6/22/2006 10:14:42 AM , Rating: 2
Maybe the poster's keyboard came from the same factory.

By ksherman on 6/22/2006 9:34:52 AM , Rating: 2
Maybe this sheds some light on Apples recent serious quality issues... The workers are rebelling :-)

Always in the mood for a good uprising :-)

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
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