Foxconn, one of Apple's main contractors, has raised wages for the second time after a spate of suicides last year put the company under scrutiny.
Foxconn, the Taiwan-owned manufacturer with giant assembly facilities in mainland China which is one of Apple’s main contractors, says it has raised wages by up to 25% in the second major salary hike in less than two years.
As the world’s largest electronics contract manufacturer, it has come under intensive scrutiny after a spate of suicides last year and reports of long hours for the hundreds of thousands of staff. Its facilities are scheduled for inspection by a team from the US Fair Labour Association (FLA), at the prompting of Apple.
The continuing reports of deaths and distress at Foxconn have created a PR problem for Apple, which is seen as the principal user of the company’s facilities. So far Hewlett-Packard, Microsoft and Dell have not commented on their use of Foxconn.
None is presently a member of the FLA, whose membership is principally made of clothing companies with suppliers in the Far East.
Tim Cook, Apple’s chief executive, said last week that Apple took working conditions very seriously and that every worker had the right to a fair and safe work environment.
Apple has also given ABC News’s Nightline TV programme special access to the Foxconn plants, in a segment due to air on Tuesday.
Foxconn employs about 1.2-million workers at a handful of massive plants in China which are run with almost military discipline, in which staff work for six or seven days a week and up to 14 hours per day.
The workers assemble iPhones and iPads for Apple, Xbox 360 video game consoles for Microsoft, and computers for Dell and Hewlett-Packard. Foxconn is one of China’s largest single private employers.
Chinese workers at Foxconn now receive between 1 800 yuan and 2 500 yuan (£180 to £250) per month following the raises that became effective from 1 February, the company said.
“This is the way capitalism is supposed to work,” David Autor, an economist at the Massachusetts Institute of Technology, told the New York Times. “As nations develop, wages rise and life theoretically gets better for everyone.”
“But in China, for that change to be permanent, consumers have to be willing to bear the consequences. When people read about bad Chinese factories in the paper, they might have a moment of outrage. But then they go to Amazon and are as ruthless as ever about paying the lowest prices,” he added.
Foxconn is also taking measures to limit workers’ total work hours. The raises come as a compensation for their reduced overtime, company spokesperson Simon Hsing said in a statement.
Foxconn said it is cooperating with the FLA inspectors, pledging again to provide a safe and fair work environment.
In 2010, a spate of worker suicides at an enormous Foxconn complex in the southern boomtown of Shenzhen drew attention to the stress many young workers faced working in some factories.
The company denied allegations that it ran excessively fast assembly lines and demanded too much overtime, but it soon announced two pay hikes that more than doubled basic worker salaries to up to 2 000 yuan per month.
Last month, dozens of workers assembling video game consoles climbed to a Foxconn factory dormitory roof in the central Chinese city of Wuhan and some threatened to jump to their deaths amid a dispute over job transfers that was later defused.
The New York Times reported that workers welcomed the announced raises and overtime limits, though some were unsure they would cause much real change.
“When I was in Foxconn, there were rumours about pay raises every now and then, but I’ve never seen that day happen until I left,” said Gan Lunqun (23), a former Foxconn worker. “This time it sounds more credible.”
“China can’t guarantee the low wages and costs they once did,” Ron Turi of Element 3 Battery Venture, a consulting firm in the battery industry, told the paper.
“And companies like Foxconn have developed international profiles, and so they have to worry about how they’re seen by people living in places with very different standards.”
Foxconn has also announced plans to invest in millions of robots and automate aspects of production.—