Did Apple Supplier Foxconn Raise Wages in China Because of International Pressure?

 by Paul Garver

It was gratifying to read in the New York Times article of 18 February that Apple supplier Foxconn had sharply increased salaries at its plants in China in response to pressures from workers, international markets and concerns among Western consumers about working conditions.  According to MIT economist David Autor, capitalism is supposed to work that way: “As nations develop, wages rise and life theoretically gets better for everyone.”   Autor points out that Western consumers will have to bear the consequences of higher prices for their iPhones and iPads.  (In reality tripling wages for workers assembling Apple products in China, now constituting about 1% of the retail price of an iPad, would barely nudge Apple’s swollen profit margin).

This detailed article by NYT reporters David Barboza and Charles Duhigg is worth reading and mostly gets it right.  They do note that manufacturers in Chinese coastal cities like Shenzhen are desperately trying to recruit new workers, and having to provide higher wages and bonuses as inducements.  They also note that Foxconn is responding to the challenge by moving their factories deeper into inland China, and is talking about installing more robots.

Unfortunately the article exaggerates the extent to which the announced salary increase is a response to international pressure on Apple and Foxconn.  The announced 25% increase applies to only the 400,000 Foxconn workers at its older facilities in coastal Shenzhen, and is mainly in response to an increase in the municipal minimum wage and to soaring inflation in living costs there.  At its new mammoth inland facilities in Chengdu (iPads) and Zhengzhou (iPhones), salaries for an equivalent number of  assembly workers remain much lower. 

In addition, many of the assembly workers in Chengdu and Zhengzhou are so-called “student interns” from local vocational schools, conscripted involuntarily through deals between Foxconn and their school administrations.  Regardless of their field of study (whether it be foreign languages or pharmaceuticals or whatever) the students have been told that they cannot their school certifications unless they go through “internships” that have them working endless hours in Foxconn mega-factories.  Although on a much more massive scale, it is reminiscent of the scandalous treatment of foreign student visitors at the Hershey warehouse in Pennsylvania.

The highly publicized audits of Apple suppliers in China by the Fair Labor Association (FLA) has gotten off to a bad start, when after a one day visit conducted by the Foxconn CEO Terry Guo, FLA  President Aurel van Heerden publicly praised its iPad plant in Shenzhen as “way, way above average.”   Labor rights groups in Hong Kong and the USA have no confidence that FLA audits will change anything on the ground in China.  That is, unless Western consumers in fact begin to effectively demand that their iPads and iPhones not be soaked in the sweat and blood of young Chinese workers.

These comments are based mainly on reports from Students & Scholars against Corporate Misbehavior (SACOM) and from Scott Nova of the Worker Rights Consortium.