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Low wages and lots of overtime make for one sour Apple

Last week DailyTech reported that Apple had launched a probe into Foxconn, also known as Hon Hai Precision, the manufacturer that produces Apple's iPods. The reason for the probe is that Foxconn was recently in the public eye for apparently over-working its employees and paying them obscenely low wages. In fact, it was reported that many of Foxconn's employees that are located in its Longhua facility receive a mere $50 a month even after putting in 80 hour work weeks.

Apple responded to the reports and said that it does not condone and accept any form of employee mistreatment from any of its suppliers. Apple then launched a probe into Foxconn's manufacturing facilities, with Foxconn today admitting to reporters that it makes some of its employees work over time and pay them just minimum salary. According to Foxconn, employees were being asked to work up to 80 hours above their regular amounts on a monthly basis, which is against local government rules. By Chinese law, employees can only request a total of 36 hours a month extra from an employer.

Li Zong, a representative for Foxconn stated that while it was violating government rules, it had paid the necessary minimum wages to its employees. Zong also said that prior to all of this, Apple had inspected Foxconn's facility and gave it a green light for production. While the details of Apple's actual inspection remain unclear, Foxconn says that all employees are being paid according to local laws and many employees actually live at the factory location in housing provided by the company.

Apple has not responded to Foxconn's statements yet.

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Apple users aren't immune to hypocrisy...
By jskirwin on 6/26/2006 4:31:07 PM , Rating: 2
Will the average Ipod user donate it to charity? Will she wash off the stench of the sweatshop by contributing more to charity?

Being a cynical Gen-Xer I have to say, yeah right...




RE: Apple users aren't immune to hypocrisy...
By masher2 (blog) on 6/26/2006 5:16:47 PM , Rating: 2
If these workers actually are getting food, housing, AND an extra $50/month, that's actually quite a decent salary for the Shanghai region of China.

Self-righteous Westerners need to realize that the average employee there probably VASTLY prefers this job to any reasonable alternative they're going to have elsewhere.


RE: Apple users aren't immune to hypocrisy...
By noxipoo on 6/26/2006 7:08:20 PM , Rating: 2
have you been to shanghai lately? you realize its ranked #20 on the list of most expensive cities in the world. working 16 hour days for $50/month more doesn't seem like a great deal, even in china. just because the alternatives suck doesn't make it right.


By KristopherKubicki (blog) on 6/26/2006 8:17:51 PM , Rating: 2
The facility is in a work district of Shanghai, not the "downtown" part. It should also be mentioned that the people who work in these factories are not urbanites -- they are exclusively rural transplants that return to rural china after their work contracts end. There is a very large disparity of wealth between urban and suburban people in China.

I sort of doubt Shanghai is in the top 20 most expensive cities for Asia, let alone world cities either.


By masher2 (blog) on 6/26/2006 10:28:21 PM , Rating: 1
> "I sort of doubt Shanghai is in the top 20 most expensive cities for Asia, let alone world cities either. "

It is #20 in the world...according to a study published just this week. However, what our previous poster fails to realize is those ranking are determined for the expat market, not the "average citizen" in such a city. Which explains why Moscow is ranked #1 in the world...yet many people live there quite comfortably on a few hundred dollars per month.

I haven't been to Shanghai in quite some time, but anywhere in China, if you have your food and lodging assured *and* an extra $50 a month, you're doing far better than average. It doesn't sound exploitative to me in the least. I'm sure the Foxconn factory has no shortage of applicants either.


RE: Apple users aren't immune to hypocrisy...
By mindless1 on 6/28/2006 1:39:06 AM , Rating: 2
So you really feel that being compelled to LIVE there, and being paid so little you can't afford a place of your own is a GOOD thing?

I invite you to do this if it's so great. Exploitation is a better word for it and I won't buy Foxconn or Apple products. I have more respect for others than greed for product or price.


By masher2 (blog) on 6/28/2006 9:36:01 AM , Rating: 3
> "So you really feel that being compelled to LIVE there, and being paid so little you can't afford a place of your own is a GOOD thing? invite you to do this if it's so great..."

Cut the absurd histrionics, will you? Good is a relative term. It's certainly better than working 16-hour days in a rice field for even less money, or living in scrap tin-and-cardboard shantytown shack, and using the toilet in the river of raw sewage flowing through your backyard. Which explains why so many workers are flooding into the booming city of Shanghai to take jobs like this. Because its far better than the alternatives they're facing.

No one is being "compelled to do anything". They're accepting a job with certain requirements. Quite a few jobs in the US have a requirements about where you live-- the US Navy, for instance, or a ML Baseball Player during active season. And-- unlike the Navy-- no one was ever forcibly drafted into working for Foxconn.

I've seen the results of these 'exposes' before. Indigignant westerners-- self righteously blind to the fact that the lives of these people are being improved-- force a pullout of the businesses responsible. The workers wind up unemployed, homeless, and starving...and the Westerners turn their attention elsewhere, smiling smugly at having "improved the world".



another one sided story
By QueBert on 6/26/2006 5:02:34 PM , Rating: 1
what they fail to mention is, how these Foxconn employees get a generous 15% discount on any Ipod. Work your ass off for 5 months and you can have a shiny new video ipod. Of couse nobody there has a PC so getting music on it will be really hard.




RE: another one sided story
By brystmar on 6/26/2006 5:11:59 PM , Rating: 2
Too bad your hungry family can't eat their shiny new iPod...


RE: another one sided story
By noxipoo on 6/27/2006 7:51:56 AM , Rating: 2
whos going to buy an ipod when it costs 3 months salary


RE: another one sided story
By masher2 (blog) on 6/27/2006 8:25:27 AM , Rating: 2
> "whos going to buy an ipod when it costs 3 months salary "

No one, of course. And so the factory shuts down...and the "exploited" workers go back to the fields and farms, where they wind up earning far less than they did before.

Such is the danger of self-righteous ignorance.


RE: another one sided story
By noxipoo on 6/28/2006 12:32:54 PM , Rating: 2
did you even read the op? i was talking about the the workers in the factories buying ipods.


RE: another one sided story
By TTowntom2 on 6/28/2006 12:37:45 PM , Rating: 2
> " i was talking about the the workers in the factories buying ipods..."

So was I...which would have been clear, had you read my post. Their chances of buying an iPod may be microscopic in their current situation...but they're nonexistent without that job.


Public displays of affection...
By Pythias on 6/26/2006 4:33:31 PM , Rating: 2
Is apple going to make it up to these employees? Or are they simply going to wag their finger and tsk tsk simply because of the publicity this is getting? In what way is apple going to reprimand Foxconn for this behavior?




By brystmar on 6/26/2006 4:40:30 PM , Rating: 2
They're going to issue a reprimanding press release, of course


RE: Public displays of affection...
By TomZ on 6/26/2006 4:42:29 PM , Rating: 3
I doubt Apple will do much about this, except wait until folks forget about this. After all, this isn't so much an "Apple" issue as it is a "China" issue. From reading more about the subject, it sounds like this type of situation is actually quite common in China, although I do not claim to be any expert.

As I've said in previous posts, we consumers benefit from this type of cheap Chinese labor. The question is, by consumers choosing to purchase these items, are we doing more harm than good to workers in China?

If nothing else, we are clearly funding China's ascent to being a future economic superpower.


By mindless1 on 6/28/2006 1:42:24 AM , Rating: 2
yes it is common, too common, but that doesn't make it right.

Do we really benefit or is it just a conceptualization of greed? I don't really think we "need" that next new motherboard or MP3 player as much as we need to tread other fellow human beings fairly, equally. It is an injustice to simple concede "that's the way it is", and if that was the attitude everyone took, your standard of living would not have been any better.


OK something doesn't make sense here.
By Eug on 6/26/2006 5:04:04 PM , Rating: 2
From the article:

"Li Zong, a spokesperson from Foxconn, says Foxconn's complicated salary structure has caused misunderstanding among the media, and the company has paid the workers according to the minimum salary standards of the Shenzhen local government.

Li also says Apple has sent a special team to investigate, but has found no problem with Foxconn."




By KristopherKubicki (blog) on 6/26/2006 5:12:20 PM , Rating: 2
Hi Eug,

There is a bit of a misunderstand with some media, but I would not say that Foxconn is really in the clear either. For example, the $50 / month is net on the employee wages. Like other facilities in China, the workers are required to live "on campus" in dormitories. In order to do this, workers have to pay the company to live in these dorms, as well as pay for food, etc. This is actually a fairly common practice in China, so even though the workers are paid the minimum or even a little above it, their net income is actually very small. I am sure it's not an oversight by Apple and others, but it is an easy way of saying "we pay the mininum," when in fact there is more to the story.

Kristopher


RE: OK something doesn't make sense here.
By Eug on 6/26/2006 6:02:13 PM , Rating: 2
Yeah, but that's the norm. That's basically how it works in China, and we shouldn't be surprised at that at all. In other words, that part is not new information, and in itself it doesn't break any laws.

The bottom line is whether or not Foxconn/Hon Hai is breaking the law, which is the focus of the article. The article is claiming that Foxconn admitted it is breaking the rules, but in the very same article it quotes Foxconn as saying it isn't. So which is the truth?

I wouldn't be surprised if Foxconn were breaking the law, but like I said, the article makes no sense.


By KristopherKubicki (blog) on 6/26/2006 6:11:50 PM , Rating: 2
Another point I should add is that it is fairly common to break the law, as with the 36 hour mandate quoted, but then to pay the fine. To many companies in China (and the US for that matter), if the company pays the fine business continues as usual. There was a very good program on Discovery Times channel about a year ago detailing how a Nokia factory found it cheaper to pay the fine than to pay workers minium wages. Since the factory paid the fine, the government can't do anything and technically the facility is operating legally, though certainly unethically in my opinion.

I wouldn't be too surprised if that is the case here, but since Foxconn reps have not returned any of my calls I cannot say for sure either way.


Another proof
By defter on 6/26/2006 5:22:13 PM , Rating: 2
That Apple isn't some kind of "saviour of the world" as some folks like to portray it.

It's just another selfish, greedy company that will abuse employees and customers given the chance.




RE: Another proof
By TomZ on 6/26/2006 5:39:48 PM , Rating: 2
quote:
That Apple isn't some kind of "saviour of the world" as some folks like to portray it.

QFT.

Anyone who believes that such-and-such a company are "good guys" out to give you a helping hand are just fooling themselves. I see this attitude especially regarding Apple and often AMD. Companies focus on earning profits, and they care about you and I just enough to get you to help contribute to their bottom line.


RE: Another proof
By brystmar on 6/26/2006 5:57:51 PM , Rating: 2
As well they should. I'd never want to invest in (or work for) a company that didn't care about its own profitability. Obviously this shouldn't come at the exploitation of others, so I hope you realize that the vast majority of companies in this world are keen to ensure their corporate practices do not negatively impact their supportive local economies.


Those Chinese sure treat their workers bad.
By Plester on 6/27/2006 10:26:53 AM , Rating: 2
Geez some Chinese companies have a lot of nerve - how could they exploit workers like that? I sure am glad I live here in the good old USA where that kind of thing is unimaginable. I mean think if we had ever had company towns that only paid a pittance and forced workers to live in company housing and buy at the company store.

Where do you think they got the idea? Probably by studying US history.

We are much more civilized here, corporate leaders let workers bust their humps for decades, encourage them to buy company stock for their pension plans then run the 60 billion dollar fantasy into the ground, and the 6000 employees... well, at least they didn't have to live in a dorm.




By jskirwin on 6/27/2006 1:40:20 PM , Rating: 2
You're talking about Microsoft, right?


By Larrymon2000 on 6/26/2006 4:21:44 PM , Rating: 3
In other news, iPod video sales reach an all time high. Plus, the latest survey finds that 99% of iPod users do not know that FoxConn produces iPods.




Well done Daily Tech Readers!
By dice1111 on 6/26/2006 5:05:57 PM , Rating: 2
Looking back on that previous posts, we totally called this. It will be interested to see what Apple will do. IMHO I don't think it's going to be very much.




Mistake
By peternelson on 6/26/2006 8:30:12 PM , Rating: 2
"By Chinese law, EMPLOYEES can only request a total of 36 hours a month extra from an EMPLOYEE. "

OK, what are you saying, this either means:-

the EMPLOYER can be asking the employee to do more hours,

OR the Employee wants more hours so is asking the Employer to give them more work (and thus more income at the same rate per hour).

SO, WHICH IS IT? (Employees would not be asking each other)

Either way, we have to realise the cost of living, food etc in China is well below western levels.




By vailr on 6/27/2006 9:07:14 AM , Rating: 2
Not mentioned, in regards to Foxconn, is the fact that all of Hewlett-Packard buisiness PC's are also made from Foxconn motherboards, cases, PSU's, and several other components.
Final assembly occurs in HP's Indianapolis, Indiana facility.
About 1/3 of the employees there are "officially" Foxconn employees.
Shouldn't Foxconn be considered part of the Chinese People's Liberation Army? And Foxconn's "employee housing" as being "Army barracks"?




By mindless1 on 6/28/2006 1:45:29 AM , Rating: 2
Apple had the resources to fully investige this for years, but waiting until they had secured contracts. Too late apple, you did it because of the price you were quoted, to try to turn screws now is both condoning the environment that resulted in your lower costs and then trying to eat your cake too by pretending to take the high road after benefitting from these employees exploitation.




Financial GREED knows no boundaries !
By cornfedone on 6/27/06, Rating: -1
RE: Financial GREED knows no boundaries !
By masher2 (blog) on 6/27/2006 9:20:32 AM , Rating: 3
Absolutely right. They should just shut down those sweatshops, and put those employees back into the rice fields. They'll have to work harder, and earn a lot less...but at least they won't feel "exploited".


RE: Financial GREED knows no boundaries !
By aos007 on 6/27/2006 2:05:55 PM , Rating: 2
Riight. Work harder than 80 hours a week. And earn less than minimum wage minus mandatory dorm accomodation/food. These guys basically work every waking hour and after paying mandatory expenses back to the company, make just enough to buy new clothes once in a 6 months or so. They also can't have families as they must live in a dorm(not that they'd have time to interact with them anyway). This is working "less hard" and making "much more"? I'd rather live in a forest and hunt rabbits with my bare hands. Where do you get your sense of right and wrong anyway? The same place you use for comparison of what is more and what is less, apparently.


By masher2 (blog) on 6/28/2006 9:51:59 AM , Rating: 3
> "I'd rather live in a forest and hunt rabbits with my bare hands..."

Ah the voice ignorant melodrama chimes in. Try actually living in a forest sometime....a real forest, not a public park, and doing it without thousands of dollars of fancy camping gear. Do it when its snowing outside, or flooding, or just a strong electric storm. Get used to no electrical power...forever. Clothing consisting of discarded rags. No showers or baths...ever. Rivers of raw sewage. Malnutrition and disease...and, above all else, the constant threat of starvation.

These people HAVE done just that. And they chose- gladly chose-- to live in a clean, warm, dry, and safe dorm in Shanghai, and draw a salary that, while microscopic by Western Standards, is pretty decent by Chinese ones.

If you ever step outside your own First-world boundaries, and see how people actually live in some of these nations, you'll quickly change your tune. I've seen a families of 9 children "living" in noting but a sheet of cardboard, held up by four sticks. Their water supply and toilet consisting of two large jugs in front, side-by-side. Their diet consisting of grubbed up roots...period. (you think wild animals are plentiful in an area where thousands of starving people are trying to catch them?) And this was in a nation whose per-capita income was HIGHER than China.

If you want to do something to *help* these people, do it. I certainly have. But a lot of indignant, misinformed moaning about how they're being "exploited" is going to hurt them, not help.



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