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Foxconn Raises Wages and Cuts Overtime Thanks to International Concern
Last Monday Apple announced that they were enlisting the Fair Labor Association to do independent audits of their manufacturing facilities in China at the Foxconn factory in Shenzhen where human rights issues have been a hot topic recently. Over the weekend Foxconn announced they’d be raising workers’ wages by 16%-25% to about $400 per month before overtime as well as cutting overtime hours. In January 2010 eighteen workers jumped to their deaths off of the roof of the Foxconn factory where Apple products are manufactured and the company has been accused of forcing workers to endure extensive overtime and poor living and working conditions.
Over the past few years, international scorn has descended not only on Foxconn — and other Chinese factories — but also on Apple for enlisting factories with poor conditions to manufacture their products. The world’s most successful company has been accused of sins like polluting the environment and child labor among other things. Foxconn, who has been involved in most of Apple’s manufacturing hiccups, employs 1.2 million workers and creates an estimated 40% of smartphones, computers and other electronics sold worldwide. A pleasant working environment isn’t made through better wages and less overtime, though this move is surely a step in the right direction.
The international concern over working conditions at these Chinese factories seems to have finally sunken in but the raising of wages and cutting overtime will have distinct effects on the markets in the rest of the world that consumers must learn to get used to. Higher wages mean more expensive products — Foxconn manufactures devices for Hewlett-Packard, Dell and Apple — and less overtime means a slower delivery of products to our shelves and doorsteps. Raising wages means price hikes which could initiate an even greater change, the move to bring those manufacturing jobs back to the United States. If Chinese-made products become more expensive, it may become less cost effective to make things overseas which could bring that manufacturing work back to America’s once-humming factories. Domestic-made products have less of a carbon footprint thanks to the elimination of that oily, emissions heavy steamship ride from China.
Second photo by dno1967b on Flickr
Third photo by Boolean Split on Flickr
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