Foxconn, which produces smartphones and tablets for a wide variety of companies, has drawn considerable criticism for its employees' working conditions. Today, the company announced a significant pay raise for its workers.
It is perhaps best known as the manufacturer of Apple's iPhone and iPad, but that's just the tip of the iceberg. Foxconn produces the Amazon Kindle, Sony PlayStation 3, Nintendo Wii, and Microsoft's Xbox 360. It also does work for Samsung, Motorola Mobility, Nokia, Dell, and HP. It is the largest private employer in China, and makes about 40% of the world's consumer electronics.
One of the reasons this company gets so much business is that it has relatively low labor costs, especially when compared to a factory in the U.S. or other first-world country. Three years ago, Foxconn paid its most junior employees just 900 yuan a month ($145). Since that time, however, there have been three across-the-board pay increases, so that these employees are now getting a monthly salary of 1,800 yuan ($290). This can be increased to 2,200 yuan by getting an internal company certification. Still, that's quite low compared to what someone in a Western country would demand.
Working Conditions Are an Issue
In addition to low pay, there have been widespread allegations that Foxconn treats its factory workers very poorly. This includes extremely long hours -- sometimes seven days a week. Child labor is reportedly common, and so is improperly using and disposing of hazardous chemicals. In recent years, a number of employees have been killed in explosions, and a string of suicides made headlines.
International attention, and criticism, has caused this company to make changes, including doubling employee pay over the last few years. But recent reports on the company in the media say that many of its problems are still ongoing.
Plenty of Blame to Go Around
Some of the criticism of Foxconn has spilled over onto Apple, which has become extremely profitable by having its smartphones and tablets produced at a low cost by Foxconn. These complaints are generally coming from human rights groups and the media, rather than Apple's business rivals, as most of them profit from Foxconn's business practices, too.
There have been suggestions that the way to force changes is to boycott Apple products. However, Foxconn's reach is so broad that, to be successful, any boycott would also have to include virtually all companies who offer smartphones and tablets, as well as those who sell gaming consoles and many other consumer electronics.
The string of pay raises shows Foxconn is willing to bend to outside pressure to improve the lives of its employees. If it continues to do so, it is inevitably going to have to increase what it charges companies to produce their products, eventually raising the amount consumers pay for smartphones and similar devices.
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