MCLC: Foxconn lifts wages

[Denton, Kirk]

MCLC LIST
From: kirk (denton.2 at osu.edu)
Subject: Foxconn lifts wages
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Source: The Guardian
(2/20/12):http://www.guardian.co.uk/technology/2012/feb/20/foxconn-apple-ch
ina-wages

Foxconn lifts wages for workers 25% as Apple lets ABC News into plants
Pay rise for staff comes as company says it will limit workers' hours at
huge plants where products are assembled for Apple, Microsoft, Dell and
Hewlett-Packard
By Charles Arthur

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 Labor Association, 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
<http://www.fairlabor.org/fla/go.asp?u=/pub/mp&Page=ParticipatingCompany>
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
<http://www.macrumors.com/2012/02/14/apple-ceo-tim-cook-speaks-at-goldman-s
achs-technology-conference/> 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 program 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 1,800-2,500 yuan
(£180-£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 
<http://www.nytimes.com/2012/02/20/technology/pressures-drive-change-at-chi
nas-electronics-giant-foxconn.html>. "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."

Foxconn is also taking measures to limit workers' total work hours. The
raises come as a compensation for their reduced overtime, company
spokesman 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 rumors 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.