IT WAS not the first time Foxconn, China’s largest private employer with 1.2 million workers and manufacturer of 40 per cent of the world’s electronics, had promised to improve its workers’ pay and conditions. But on Friday, in the wake of a critical report commissioned by major client Apple, the company again pledged to eliminate extensive illegal overtime working and to raise earnings, making a commitment, not least because it is to Apple, it will find difficult to ignore. In doing so it is writing an industrial relations story of global significance. A raising of the bar by Foxconn is likely to set new benchmarks for labour standards other Chinese employers in this vast market will find difficult to ignore.
Apple, recently the first tech company to join the independent monitoring group the Fair Labour Association, had asked it to investigate plants manufacturing iPhones, iPads and other devices. Its growing concern has been prompted perhaps less by worries about the welfare of workers and more by the increasing political toxicity of reports of sweatshop conditions in factories in Asia supplying the US market with anything from textiles to electronic parts. That has led to consumer boycotts and trade union and rights groups lobbies against international free trade agreements citing unfair labour competition in markets like China.
The Fair Labour Association found widespread problems, including many violations by Foxconn of Chinese law and industry codes of conduct, with employees working more than 60 hours a week, sometimes for 11 or more days in a row. It reported that 43 per cent of the 35,000 workers surveyed had experienced or witnessed accidents, almost two-thirds said their pay “does not meet their basic needs”, with many saying that unions did “not provide true worker representation.” Foxconn promised that by July 2013 employees would no longer exceed the 49-hour week limit set by law or the 36 hours a month overtime maximum. Workers will not see pay decline because of corresponding wage increases.
Foxconn’s willingness to accede to external demands reflects domestic market pressures, notably increasing difficulties firms have recruiting factory workers. That has seen upward pressure on pay – the minimum wage in Shenzhen, where Foxconn has the bulk of its employees, has gone from 635 renminbi a month (€76) in 2005 to 1,500 renminbi (€180) now. A new confidence among workers in their ability to wring concessions from employers is bearing fruit, gradually changing the face of the country’s industrial scene.