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Apple will lose 0.7 percent of its iPad profits to give the workers that assemble its device a 20 percent raise. Workers at Foxconn are currently struggling after a string of suicides and enduring reportedly poor working conditions.  (Source: Kin Cheung/AP)
A small cut to Apple's profit margin may make a big difference in workers' lives

It took a string of suicides to spur it to action, but Apple is finally taking a big step towards trying to ensure that the workers who build its bestselling iPads, iPods, and iPhones enjoy a decent standard of living.

Apple's products are almost entirely manufactured by Foxconn, a China-based unit of Taiwan's Hon Hai Precision Industry.  Foxconn builds the sleek devices at its Shenzhen plant in Southern China.  While many companies (Microsoft, HP, Dell, Nintendo, Sony, etc.) utilize Foxconn's manufacturing services, the Shenzhen facility primarily serves Apple -- and it's also the site of all of the recent suicides.

The suicides were perhaps foreshadowed by an internal probe by Apple that revealed that several of its international manufacturing partners were committing abusive employment practices, such as using child labor or demanding unpaid overtime.  According to reports, the latter was particularly common-place at the Shenzhen facility.

According to a report by Chinese news organization Sina, Apple has now quietly committed a dramatic gesture, offering to finance the majority of the 20 percent raise in pay to the Shenzhen workers.  The raise was long promised to workers, but had remained undelivered for some time now.

The 20 percent raise will cost Apple a little, but not very much.  It is estimated to raise the costs of labor for the iPad from 2.3 percent of the cost to 3.0 percent of the cost.  Apple still looks to make hundreds in profit off of each unit sold (breakdowns estimated Apple makes at least $200 per iPad sold).

For the Foxconn workers living in the factory city of Shenzhen, though, the raise will make a world of difference.  While some will question why Apple didn't push for higher wages in the first place, it's important to appreciate that it is at least taking action now.  One can only hope that HP, Dell, Microsoft, and others step up to the plate and offer to subsidize similar raises at their manufacturing locations -- even if they haven't been struck by the spate of suicides that occurred at Apple's plant.

Apple has not yet officially acknowledge the report, though it has previously stated that it was concerned about the working conditions at Shenzhen and that it was evaluating its options.

In other news, a fire broke out at the Shenzhen plant this week.  It reportedly was unrelated to the suicides.  The fire did not do any major damage to equipment, according to reports, and is not expected to impact Apple's production schedule.

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Apple has saved and created lives.
By reader1 on 5/31/2010 9:52:52 PM , Rating: -1
By creating products that sell very well, Apple has created thousands of jobs. That has allowed many people to survive and have families. That number is far higher than the number of deaths at these factories.

RE: Apple has saved and created lives.
By christo90210 on 5/31/2010 10:04:30 PM , Rating: 3
Yeah who really cares? Just as long as Apple wipes the blood and misery off the products they sell its all ok.

By atlmann10 on 6/1/2010 2:43:35 PM , Rating: 2
This shows how snowed you are Reader1. As many fan boys such as you the image is taken as a reality. This action by Apple or anyone else who uses Foxconn is nothing but shallow and dim witted reaction. You do not see the big picture nor does most of the public in general. You take the cover image of the issue and try to make it mean something, although in all reality it means nothing. This action was I guarantee you nothing but a publicity stunt. They also paid more money out to there publicity machine to do this than they will to the workers who produce the products they make. You as a dim witted and blind sheep following the herd make idiotic statements of how great they are. When in all actuality they have done nothing but dust of there image with this, and there followers eat it up like candy. You are blind Reader1 as are 90% of all fan boys to anything which exists in reality.

RE: Apple has saved and created lives.
By gunzac21 on 5/31/2010 10:04:51 PM , Rating: 2
Why is your first statement structured in this argumentative way as if someone has already attacked your view. Also why are you praising apple for something all business entities do and minimizing the deaths of these people which is something many other businesses are able to avoid.

RE: Apple has saved and created lives.
By mckinney on 5/31/10, Rating: -1
By leuNam on 6/1/2010 9:49:51 AM , Rating: 1
eww....dirty thoughts!

By Jeffk464 on 5/31/2010 10:49:53 PM , Rating: 1
Hey who knew, foxconn management watches these tech sites. :)

RE: Apple has saved and created lives.
By NovaCain820 on 5/31/2010 10:59:10 PM , Rating: 1
Kinda being a tool if you're baiting as a first response. However I won't get into a discussion about Apple with you, because your discussions cause visible human de-evolution, so just as a courtesy to the other readers; followed up your post to let everyone else know that, you're doing what you do best..

RE: Apple has saved and created lives.
By piroroadkill on 6/1/2010 4:05:40 AM , Rating: 2
It's reader1. If he wasn't trolling, something is wrong. Disregard.

RE: Apple has saved and created lives.
By chick0n on 6/1/10, Rating: 0
By rpip on 6/1/2010 10:56:33 AM , Rating: 2
Do you honestly think the working conditions are any better at any Foxcon (or other Chinese) plant used by HP, Dell, MS or any other tech firm? Maybe there is more pressure at this particular Foxcon plant because people WANT Apple products and the demand outstrips the ability to manufacture.

Do you believe there is any less blood and sweat on laptops, smart phones or other products made by other companies? Fact is many of you just hate Apple and don't really give a rip about Chinese or any other workers...


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