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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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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.

"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki
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