Apple contractor Foxconn raised wages by 25 per cent in response to recent allegations of worker abuse in their factory in China. Apple is now facing a ‘Nike moment’ when it was revealed that Nike used cheap labour in its factories in the Far East in 1990s. Nike received a lot of negative publicity for it although it was not the worst case at that time. The same is now happening to Apple.
Foxconn makes iPads and iPhones under contract to Apple in giant factories that employ and house over a million Chinese workers. They are run with very strict, almost military, discipline demanding employees to work six or seven days a week for up to 14 hours a day for very low wages. Workers also assemble Xbox 360 video game consoles for Microsoft, and computers for Dell and Hewlett-Packard. However Apple, as the main user of Foxconn’s facilities remains primary focus of negative media coverage. Other companies, like Hewlett-Packard, Microsoft and Dell, have not yet commented on their assembly activities.
The claims of bad working conditions date back to 2010, when thirteen workers at a factory run by Foxconn committed suicide. Last year another scandal was revealed when four people were killed in a fire in one of the factories in southwest China. Another Apple supplier has reported several workers being injured after using a toxic chemical to clean iPhone screens at a factory in Jiangsu.
Following these incidents and spate of suicides caused by distress and long working hours the salaries were increased by 25 per cent. This has been the second rise, which more than doubled basic salaries, since working conditions in the factory came under intense control from the Fair Labour Association. Apple's chief executive, Tim Cook, said last week that the company took working conditions very seriously and it was committed to creating fair and safe work environment. After the pay rises Foxconn’s staff now receive 1,800-2,500 yuan a month which is between £180 and £250. Foxconn claims it is now co-operating with the FLA inspectors to improve working environment in the factories. Workers welcomed the pay rises. Many agreed that if it was not for the deaths that forced the company to rethink how it treated its workers, the changes would not have been made.
Despite the scandal Apple’s popularity and sales seem to be unaffected. Problem of cheap labour and poor working conditions however will not change immediately. Consumers need to be prepared to bear some of the cost, instead of looking for the lowest possible prices.
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