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Foxconn raises employee pay by 30 percent

updated 03:45 pm EDT, Wed June 2, 2010

No word on working hours

As of June 1st, Foxconn has raised the pay for all of its Chinese production workers by 30 percent, according to parent company Hon Hai. Foxconn last week said that it would be raising pay by an average of 20 percent, but this drew fire from labor activists, who argued that it would not have much impact. The company is a major manufacturer, with clients including Apple, Dell, Sony, Motorola and HP; it has drawn fire for harsh working conditions however, believed to be a factor in 10 suicides that have occurred in a matter of months.

While low pay has been one of the biggest criticisms directed at Foxconn, the company has so far announced no changes to working hours. Employees in Shenzhen are said to regularly operate on the assembly lines almost non-stop, getting little to no time for themselves beyond eating and sleeping.

Hon Hai warns that it may decide to pass some of the raise's cost on to client businesses. It also notes though that it may take months to determine the net impact, in part because it expects to become more efficient as a result of less staff turnover.

Apple, moreover, is believed to be actively contributing to the higher wages, sacrificing a small portion of its device profits in order to improve its public image. CEO Steve Jobs has personally tried to defend his company, calling rate of suicides below Chinese and American averages. He also insists that Foxconn is "not a sweatshop," but a company that even provides amenities such as restaurants and movie theaters.


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By Electronista Staff
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  1. IxOsX

    Fresh-Faced Recruit

    Joined: Feb 2009

    +2

    Just use the right word. Slavery!

    Fact: "Employees in Shenzhen are said to regularly operate on the assembly lines almost non-stop, getting little to no time for themselves beyond eating and sleeping."

    Aside the fact that they are poorly payed, what is this different from true old slavery?

    This is bad for everybody, except for the few ones who get more richer every day with that modern slavery.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: slavery

    This is bad for everybody, except for the few ones who get more richer every day with that modern slavery.


    Yep, including all us Apple stockholders!

  1. herojig

    Fresh-Faced Recruit

    Joined: Jul 2009

    -2

    for those that know nothing...

    Foxconn is not a sweatshop when compared to US standards for such. It's a respected Chinese company with good pay and benefits (according to Chinese standards). What's really strange is how much sway the US media machine has over private industry in China...30% raise over the articles on suicide, which is common all over Asia, for whatever reason. The focus should be on the small suppliers that feed Foxconn and others, where the abuse is real instead of perceived.

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +1

    $130 a month goes to $170 a month

    First of all, 30% increase sounds like a lot, because WOW, what could we do with a 30% increase?

    But, lets remember the average Foxconn worker makes $130 a month, so this is a bump to $170 a month.

    It might actually be fair to put the suicide issue aside. The reason is, Foxconn employes 500,000 people, and their suicide rate is actually lower than China as a whole - furthermore the rapid industrialization of China has actually coincided with a drop in the suicide rates - not an increase.

    However, does it change the fact that working conditions are deplorable? No, they are deplorable, and the fact that more people haven't killed themselves is beside the point - its still horrible, deplorable, despicable working conditions.

    The raise should have been at least double, if not triple the current amount. I realize that China can't move to western standards overnight, but there is no particular reason for a mere 30% raise.



  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +1

    More math for those who care

    Foxconn's profits of 565 million per quarter, if averaged out per employee (just for the sake of argument) would be about $1130 of profit earned per employee, per 3 months or $376 of profit, per employee.

    They start wages at $130, now $170 per month in labor....but the free in clear profit, after paying all expenses, taxes, wages, r&d, etc, is $376 per employee.

    No way am I suggesting that all profits should be distributed equally, irregardless of market forces, supply and demand, talent or performance....

    no its just an intellectual exercise to demonstrate that FoxConn themselves, have the money to easily double starting wages....easy, and make windfall profits on top.

    Now, wages aren't everything, but if they now pay 30% above market, they could easily attract more employees, and use some of the money to reduce the length of shifts for existing employees.

    They have the options, just not the will.




  1. 11211

    Fresh-Faced Recruit

    Joined: Apr 2008

    0

    what abt shareholder value

    As a proud appl fanboy and shareholder, I don't care abt working conditions for these azns. I care abt shareholder value and cool ipads for my enjoyment.

    Appl, please continue making cool disposable idevices to make my life more pleasurable & profitable (via shares) and don't worry bout these people in some poor country.

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