Majority of Foxconn workers only receive meager wages

Feb 23, 2012
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On 18 February, Foxconn Technology Group announced a pay rise for the production workers in China. Hong Kong-based labour group SACOM comments upon this development. The new basic wage at CNY 1800 only applies to the workers in Shenzhen. In inland provinces, where two-third productions workers are based, basic salary remains meager. Given that the inflation in China is high, Foxconn is just following the trend of wage increase in the electronics industry in China.

On 18 February, Foxconn Technology Group announced a pay rise for the production workers in China. Hong Kong-based labour group SACOM comments upon this development.

The new basic wage at CNY 1800 only applies to the workers in Shenzhen. In inland provinces, where two-third productions workers are based, basic salary remains meager. Given that the inflation in China is high, Foxconn is just following the trend of wage increase in the electronics industry in China.
 
Pay rise is a trend in Guangdong Province
According to the Shenzhen research team of the National Bureau of Statistics, the Consumer Price Index (CPI) for food in January 2012 rose 10% over the last year, of which price for pork increased by 30%.[1] Apparently, the low-income migrant workers are disproportionately affected by the inflation. As a result, there is a strong demand from workers to increase the basic salary. Moreover, most of the migrant workers can only visit their family once a year during the Chinese New Year. In the past few years, there are more job opportunities in the inland provinces, more workers prefer to seek jobs in their home provinces. The enterprises in coastal area worry about the shortage of labour. Therefore, many companies tend to increase the basic salary to attract workers. As such, Foxconn is not the only enterprise which raises the basic salary of workers. Other electronics factories, like Huawei is also paying CNY 1800 a month for new workers. In Dongguan, many electronics factories like Flextronics and Wintek are paying CNY 1400 a month to new workers. The amount is about 27% higher than the minimum wage. In other words, Foxconn increases the salary is not out of benevolence, but the needs to maintain stability of the workforce.
 
Wages in most of the Foxconn plants remain low
Foxconn has over 1.2 million workers in China. The workforce in Shenzhen is estimated at 400,000. Workers in inland province receive a much lower salary. For example, Foxconn workers in Chengdu and Zhengzhou who produce iPads and iPhones, their basic salary is CNY 1350-1550 per month. After deducting CNY 110-150 for the dormitory and about CNY 300 for food per month, the disposable income remains meager.
 
Wages of Foxconn workers in Shenzhen, Chengdu and Zhengzhou:
                                                    Shenzhen        Chengdu        Zhengzhou
Minimum Wage                            1'500                1'050              1'080
Basic Salary                                1'800                 1'550              1'350
After a probationary period       2'200-2500         1'750              1'650
 
Since Apple has brought a membership from the Fair Labour Association, it seems that Apple becomes transparent and socially responsible. Apple is the world’s most valuable brand. It can definitely afford a living wage for the workers. Without raising unit price, workers still have to toil long hours in the production lines to earn a living from the overtime premiums. Yet, the FLA will not pressure its members to raise the unit price to provide a living wage for the workers. To fight for a living wage, workers should have the right to form union by democratic elections. At the same time, consumers should keep up the pressure on Apple.
 
Contact Persons
CHAN Sze Wan, Debby, Project Officer
Email: debby@sacom.hk
Tel: +852 2392 5464 or +852 6756 8964
CHENG Yi Yi, Project Officer
Email: yycheng@sacom.hk
Tel: +852 2392 5464 or + 852 6012 0312



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[1] Su Ni, “Shenzhen CPI in January increased by 3.9%, Rise in food price is leading”, southcn.com, 13 February 2012, http://news.southcn.com/d/2012-02/13/content_37785888.htm (in Chinese).

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