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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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By atlmann10 on 6/1/2010 2:32:58 PM , Rating: 2
I hate to say it, but if this is true which it seems to be, Apple really just gained some serious respect from me, at least for there aim here. No I don't like the closed proprietary setups schematic they run, but something like this needed to happen. It is horrible for things like the Chinese employee suicides to happen.

However; for "ONE" of the major players here to actually do something like this is what needed to happen. This equalizes (or can have that affect) on societies world wide. The one really big thing here, and this is if it is true which will be seen, is if that money filters down to the actual employee.

I am not talking about the company skimming "which I am sure to some point will also happen", but also do not forget this location also exists in a communist country. In such a country the Government "makes the decisions as well as the actions, for these employee's and there families better treatment", and therefore mentality as far as general behavior is done by this government. This may, and most likely will in many cases mean absolutely nothing for these employee's.

When you make the workers (lower to lower middle end) too strong, or even give them any added power of any form in a communist country, you also strengthen the people, and therefore weaken the government. So at best these money's will be "moderated", by the Chinese government, for there peoples "Well Being".

While this would be good if the employee's actually saw it to any serious degree it would be a good thing. I also believe that if we as American's believe in a capitalist form of governing we should see this. The problem here is as stated earlier the people/workers will see this only to a very small degree I imagine. If we believe in said capitalist market/society, we should also make sure that the people/workers actually see these money's, and therefore improvements in there life.

If we do not we are in most cases just giving the communist government greater control and monetary power. This is where the whole thing gets screwy especially regarding being American and having said inherent beliefs. The only way to actually do anything of this nature is for the companies to insist on doing business with companies which exist not in such a politically structured country.

This is particularly funny with Apple specifically really. This is because to the greater amount the Illusion is that Apple makes products "especially according to there fan boys" for higher minded more cultured computing, and individuals. The truth is most of there products are made in locations where mindsets and political make ups exist. Therefore everything Apple does to the greater percentage oppresses people in real time, and strengthens those who would do so on a wide scale basis.

So is the fact Apple is seemingly caring about these individuals a good thing? The answer is yes it is. Is Apple actually really doing anything about anything other than there own self serving public image? The true answer here is no it is not, and in all reality it is making systems for shallow unseeing individuals. This in many ways keys in to the Gates foundations of the world just as much. Yes Bill and Belinda gates do great things world wide with there money.

The reality though is that to the largest part the money they do it with is just dirty money. They got it from physically oppressing people, and causing the problems they aim to fight. So just as Apple does this for public perception, so does the gates foundation as well as all the BS that goes on in this world with the same end product.

If these companies and people actually wanted to do anything other than make more money, then they would insist on doing business only in countries which in the general consensus had free markets and free people! Which they do not do. So it is basically all just factitious lies done for a companies face value, and means little to nothing in reality for anyone. If all these companies insisted on doing business of any type in free countries, then these forms of ancient government would end, and the world would be a truly better place.

Until that happens it is all only an illusion. The worst part of all this is that we as a country, and a government who does anything in collusion with such individuals are the one's who strengthen these governments and make them a reality. So in the big picture it is not even the companies fault, it is in reality the US governments for allowing products made by an oppressed people to be sold in our country period. The book of America today is only capitalist on the cover. In reality throughout the core of the writing and contained materials of this book that is America it also is nothing but a factitious lie.

By messyunkempt on 6/2/2010 1:01:52 AM , Rating: 1

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