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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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RE: We're sorry...
By FaceMaster on 6/1/2010 8:39:43 AM , Rating: 2
Yeah, what are they thinking?!?! Apple are an EVIL company and a display like this is obviously just to gain the hearts of those around it. WE CAN SEE PAST IT. It's terrible that they've given sweatworkers a raise, it's like sticking a finger up at them. Apple are evil and this just proves it. They should give money to the poor like Bill Gates does. When will Apple learn?!?!?!

RE: We're sorry...
By EasyC on 6/1/2010 12:17:45 PM , Rating: 2
Or they could NOT use a sweatshop.

RE: We're sorry...
By FaceMaster on 6/1/2010 7:54:38 PM , Rating: 2
Or they could NOT use a sweatshop.

I'm sure that if there were more economicaly viable methods, they would. A lot of companies use sweatshops, and it's not as if they'r actually worse to work in than any other job in that area. In fact, large businesses can benefit communities more than the government, and some house the workers, give them medical aid and fresh water. They even house their families and- oh, why am I trying to reason with unreasonable people. You win, Apple's evil, all other companies doing the same thing are good.

RE: We're sorry...
By glennc on 6/1/2010 10:52:23 PM , Rating: 2
nobody said the other companies are good. they just point out that this is a publicity stunt for the mindless media believing drones of the world until the whole thing blows over. they know exactly what was going on before the media got hold of the topic and only now do they feel the need to save face. they have just released a pretty important product for them, what else are they going to do? fanboy much?

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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