Foxconn Promises More Wages, Less HoursBy: Chris Gabbard - March 30, 2012
The changes come after inspections from the Fair Labor Association discovered poor working conditions and numerous violations of Chinese law within the factories. Foxconn was found to have employees working more than 60 hours a week, sometimes more than 11 days in a row. In a survey of over 35,000 workers, the FLA discovered over two-thirds of the workers said their compensation “does not meet their basic needs.” Workers at one plant start out at about $285 a month, with average wages around $426 to $455 a month.
The same survey revealed that 43% had experienced or witnessed an accident, and many said Chinese unions do “not provide true worker representation.” The group found that in the past workers were prepped to give false information when asked questions by auditors. They even discovered a cheat sheet that provided workers false answers to give to fair labor agencies. Workers that did not comply were threatened with cuts in hours or termination.
Apple recently joined the Fair Labor Association and asked the group to conduct the inspections, amid an ongoing outcry over poor labor conditions at their factories. Numerous protests and petitions have been held to call attention to the matter, culminating in a collection of advocacy groups writing an open letter to Apple calling on the company to “ensure decent working conditions at all of its suppliers.”
In response, Apple has released the names of all of its 156 suppliers, information they had previously withheld. They have also begun posting regular reports on the number of hours worked by Foxconn employees. Since there involvement with the FLA, Chinese workers have seen pay increases of up to 25 percent.
Since widespread reports from the media and Apple joining the FLA, Foxconn has vowed to have no employee working more than 49 hours per week by July of next year. They have said pay will not decline, despite hours being cut, meaning pay raises across the board. Foxconn will likely have to hire tens of thousands of new workers and pay increases will likely cost hundreds of millions of dollars annually.
Unless Apple is willing to accept lower profit margins, this will likely translate into higher prices on iPhones and iPads in the future. Foxconn also manufactures for Dell and Amazon, in fact, they hold contracts to supply over 40% of the world’s electronics. A rise in the cost of production at Foxconn could mean a price hike in electronics everywhere.
Promises have been made by Foxconn in the past, and have not been followed through. In 2006, a similar policy was enacted by the company that promised to enforce weekly overtime limits imposed by Chinese law. Only time will tell if the company is still blowing smoke. With a promise to be in compliance in over a years time, they could be just waiting for the added attention to blow over.