Nightline's Look into Apple's Foxconn Factories

[Hattig]

"We are unhappy about the pay!!!"

*watches a mob of people almost break down the door to get a job*

Yup. Indeed the fact that Foxxconn has increased wages despite people practically fighting to work there is commendable. I know that in our western society most companies would use that as an excuse to drop wages until they found the optimum wage level to ensure enough people willing to work as required and only enough extra people to keep those employed from demanding more pay.

As for the report...

- Foxconn workers pay for their own food -- about $.70 per meal, and work 12 hour shifts
- Workers who live in the dorms sleep six to eight a room, and pay $17.50 a month to do so
- Workers make $1.78 an hour

12 hours shifts, but the dorms are presumably quite close by (no commute) and 2 of those hour shifts are for meals. In terms of free time I would hazard that these employees have about as much as your average western employee after taking commute and dinner into account. Of course many of them use that time to do overtime, but that's their choice.

Assuming the hourly wage is 1/10th of what the same job would pay in the US, the meal price scales reasonably ($7), and they don't have washing up, etc, afterwards.

And dorms by work? A bed for $175 a month (cheaper than a youth hostel dorm). I think the conditions aren't ideal, but its cheap - and ideal for new employees. A city isn't cheap, and these people come from rural areas with few possessions and very little money. However are there steps up - e.g., small individual rooms, studio flats, etc? Presumably only privately and expensive.

24 days a month * 10 hours * 1.78 = $427 a month/4weeks in pay. Crap by Western standards, but their outgoings are similarly low. Indeed the expensive items will be those where the cost can't scale down (electronics, cars, etc), a $200 TV here is a $200 TV there - but there was a time in the past that we would pay half our monthly earnings for a TV because we would do it once a decade. We'd pay a month's earnings for a PC every three to five years.

 

[Hattig]

I'm getting my head around the labor cost of making an iPad. Five days to make one = 120 hours (roughly) at a cost of $1.78/hr = $213.60 in labor only. I figure since each of the 325 hands that build the iPad are probably only handling it for a fraction of an hour, and that there is most likely minimal time an iPad is sitting around waiting for the next bit of work to be done, it's safe to say it's built fairly continuously for $1.78/hr.

I actually expect that a lot of the time is spent on conveyor belts moving to the next worker, or in racks, waiting, etc. Most labour cost estimates for iPad production are around 1/10th of the figure used given. But the figure you give would probably be the rate if made in the US, maybe times two for workers not being as efficient.

 

[marcusj0015]

Yup. Indeed the fact that Foxxconn has increased wages despite people practically fighting to work there is commendable. I know that in our western society most companies would use that as an excuse to drop wages until they found the optimum wage level to ensure enough people willing to work as required and only enough extra people to keep those employed from demanding more pay.

As for the report...

- Foxconn workers pay for their own food -- about $.70 per meal, and work 12 hour shifts
- Workers who live in the dorms sleep six to eight a room, and pay $17.50 a month to do so
- Workers make $1.78 an hour

12 hours shifts, but the dorms are presumably quite close by (no commute) and 2 of those hour shifts are for meals. In terms of free time I would hazard that these employees have about as much as your average western employee after taking commute and dinner into account. Of course many of them use that time to do overtime, but that's their choice.

Assuming the hourly wage is 1/10th of what the same job would pay in the US, the meal price scales reasonably ($7), and they don't have washing up, etc, afterwards.

And dorms by work? A bed for $175 a month (cheaper than a youth hostel dorm). I think the conditions aren't ideal, but its cheap - and ideal for new employees. A city isn't cheap, and these people come from rural areas with few possessions and very little money. However are there steps up - e.g., small individual rooms, studio flats, etc? Presumably only privately and expensive.

24 days a month * 10 hours * 1.78 = $427 a month/4weeks in pay. Crap by Western standards, but their outgoings are similarly low. Indeed the expensive items will be those where the cost can't scale down (electronics, cars, etc), a $200 TV here is a $200 TV there - but there was a time in the past that we would pay half our monthly earnings for a TV because we would do it once a decade. We'd pay a month's earnings for a PC every three to five years.

So they're getting PAID lunches, and bitching about the price? LOL they're MAKING MONEY. doing NOTHING.

 

[marcusj0015]

I actually expect that a lot of the time is spent on conveyor belts moving to the next worker, or in racks, waiting, etc. Most labour cost estimates for iPad production are around 1/10th of the figure used given. But the figure you give would probably be the rate if made in the US, maybe times two for workers not being as efficient.

I doubt that conveyor belt theory, have you SEEN how close they are to ech other?

 

[eawmp1]

You all realize that if you went to work in a canning factory in Kentucky and slept in an 8-person dorm room with shared bathrooms, you too could pay your room costs with only a day's wages, right? You could probably fit 20 people into a 3-bedroom house renting for only a few hundred dollars a month, costing less than $50 a month rent per person.

I wonder why people aren't running down there to live in dorms and take these jobs?

Heck, you could save even more to send back to your family if you ate $2 worth of rice and beans every day, never went out or had a car, and took the company bus to work. I guess Americans are just selfish for not doing this.

Actually canning jobs in KY currently pay $28,000 (web search).

Americans DID flock to jobs as you describe it above...in 1930. Read some Steinbeck. We've move past manufacturing in the US (whether right or wrong). It is very naive to apply 2012 Western economic yardsticks to an emerging economy.

 

[marcusj0015]

Actually canning jobs in KY currently pay $28,000 (web search).

Americans DID flock to jobs as you describe it above...in 1930. Read some Steinbeck. We've move past manufacturing in the US (whether right or wrong). It is very naive to apply 2012 Western economic yardsticks to an emerging economy.

The problem with moving past manufacturing is, there are still A LOT of people out there that simply can't do anything more complicated, get mad all you want, but it's true.

 

[CplBadboy]

It takes 5 days to complete production, but in those 5 days many iPad are made. The 5 days stand for the first to the last step.



The iPhone would indeed be more expensive to make, but Apple will probably have enough profit left to be profitable as a company. I agree with you on that.

Fact is: you can't bring manufacturing back to the US. People are not willing to work 6 days for 12 hours. For $12 an hour people would start working there and within a couple of month people want more time off, better working conditions, etc. So Western people are simply too spoilt to do this kind of work.

Also you would need to find 235,000 people willing to do this work. Seems like a bit much.

Add to this the fact that you need to build a load of factories and dorms. Doesn't seem very plausible or profitable.



http://www.isuppli.com/Teardowns/Ne...8,-IHS-iSuppli-Teardown-Analysis-Reveals.aspx

1st: Manufacturing costs are $8, not the complete phone.
2nd: There are no 20 man dorms, but 8 man dorms
3rd: Let's say we would go from 8 man dorms to 4 man spacious living, we would massively increase the size of the living quarters. 200 sq ft for 4 people to live in (spacious enough?) would mean 1,000,000 workers taking up 2 square miles. This would be if all the rooms were adjacent. So make it 4 square miles. Good luck with that.
4th: For the last time. Apple ≠ Foxconn. Apple is not failing at giving decent living standards. Apple is not responsible. And yet they are making a huge effort. Get your facts straight. Read this and then come back to me with a solid argument:

http://www.apple.com/supplierresponsibility/
http://abcnews.go.com/International...apples-chinese/story?id=15748745#.T0TEvpgb1vA

OK here s the solid argument. Why dont Apple bring back the manufacturing to the US or elsewhere???? Employing 235 000 people within such a large economy and country as the US wouldnt be too hard. O ye of little faith.

Your 3rd point is linear. Ever heard of accommodation blocks?? You know like a hotel?? Your looking as if its every man on the bottom floor.

The point is Apple is responsible and should be more demanding of Foxconn. Apple should have the same working and living standards as it does for its workers elsewhere.Would Apple allow workers in the US to live and work like this in the US. Forget about it being an Apple factory lets just call it FoxConn US under the Foxconn umbrella. Now are you telling me Apple would get away with these conditions and pitiful pay scales? How about you look at it like that.
Truth its very easy for Apple to turn a blind eye to this whole issue then pay off Nightline to go have a look and make it look as though everything is sweet with rainbows and fluffy clouds. Whatever way you look at it Apple condone the use of underpaid cheap labour for maximum profit. The problem like everything else corporate is: GREED. Its all about the spondullies.
You really think that Tim Cook needs to earn millions of dollars a year??? Does anybody??? No but the balance between Apple and the workers at Foxconn could certainly be levelled out.

 

[scb02]

Anyone got a link to watch this in the UK?

 

[marcusj0015]

ok here s the solid argument. Why dont apple bring back the manufacturing to the us or elsewhere???? Employing 235 000 people within such a large economy and country as the us wouldnt be too hard. O ye of little faith.

Your 3rd point is linear. Ever heard of accommodation blocks?? You know like a hotel?? Your looking as if its every man on the bottom floor.

The point is apple is responsible and should be more demanding of foxconn. Apple should have the same working and living standards as it does for its workers elsewhere.would apple allow workers in the us to live and work like this in the us. Forget about it being an apple factory lets just call it foxconn us under the foxconn umbrella. Now are you telling me apple would get away with these conditions and pitiful pay scales? How about you look at it like that.
Truth its very easy for apple to turn a blind eye to this whole issue then pay off nightline to go have a look and make it look as though everything is sweet with rainbows and fluffy clouds. Whatever way you look at it apple condone the use of underpaid cheap labour for maximum profit. The problem like everything else corporate is: Greed. Its all about the spondullies.
You really think that tim cook needs to earn millions of dollars a year??? Does anybody??? No but the balance between apple and the workers at foxconn could certainly be levelled out.

_capsrage_ apple does not own foxconn!!! _capsrage_

And about the whole "Does Tim Cook need to earn millions?" guess what, having talent affords you a larger salary, this isn't communism.

You know whats funny? you can ALWAYS tell whos untalented by their position on wages.

 

[Hattig]

My wife is an Autism Specialist—she trains parents on how to reinforce proper behaviors with their autistic children. She gets bitten, scratched, and bruised by these little rascals. Not to mention our car gets peed all over when she transports them. She makes $12.50/hr. I'm a student and I'm working as a web design intern. I make $9/hr making $10-20k websites from wire-frame, to Photoshop mockup, to HTML/CSS coding, to using WP as a CMS with custom-coded/modified plugins. Why should some factory worker doing repetitive, often mindless work make so much more than the two of us combined?

Wow, you're both massively underpaid (although you are an intern so that's expected). Web/HTML skills are fairly generic too, learn to program and get paid $50+/hr instead. Stop accepting jobs from abusive employers, or learn to charge clients more if you're self-employed.

Don't bitch at other people earning more than you for what you consider 'lesser roles' just because they got their own house in order to campaign for a decent wage.

 

[gnasher729]

OK here s the solid argument. Why dont Apple bring back the manufacturing to the US or elsewhere???? Employing 235 000 people within such a large economy and country as the US wouldnt be too hard. O ye of little faith.

Could you give a good reason why Apple would even try to do this? What would be the benefit for Apple? What would be the benefit for Apple's customers, the majority of whom are not living in the USA and would be quite unhappy if Apple increased prices because it moved production from a foreign country with low wages to a foreign country with high wages. What would be the damage for Apple's sales if Apple has a significant price increase while all its competitors don't? And let's not forget, what damage would that do to Foxconn employees in China, how many lives would be destroyed?

 

[BobbyRond]

OK here s the solid argument. Why dont Apple bring back the manufacturing to the US or elsewhere???? Employing 235 000 people within such a large economy and country as the US wouldnt be too hard. O ye of little faith.

May I suggest you make a proper calculations of the cost? Do include the following:
- Moving 100's of factory buildings and equipment over to the U.S.
- Building a proper infrastructure between these buildings.
- Creating housing for 235,000 Americans who are willing to leave their families behind to live in a spacious room with 3 (not 7) other total strangers.

Your 3rd point is linear. Ever heard of accommodation blocks?? You know like a hotel?? Your looking as if its every man on the bottom floor.

Touché, but still the cost to create this spacious living environment would be very high.

The point is Apple is responsible and should be more demanding of Foxconn. Apple should have the same working and living standards as it does for its workers elsewhere.Would Apple allow workers in the US to live and work like this in the US. Forget about it being an Apple factory lets just call it FoxConn US under the Foxconn umbrella. Now are you telling me Apple would get away with these conditions and pitiful pay scales? How about you look at it like that.

Apple is in fact more demanding than Nintendo, Sony, Dell or Microsoft. They also have Foxconn working for them. Apple has already pretty much doubled their salaries in the past few years.
Raising their salary even more might even cause problems as vrDrew very wisely explains:

The only odd note came at the end, when the reporter suggested that Apple could, because of their profitability, double the pay of all the Foxconn workers. As a trained economist, I groaned at that over simplistic piece of pandering. Imagining the distortions and corruption such an act would introduce into the system - ABC News would be there next year to investigate all the murders, kickbacks, and bribery that occurred as a result. Bottom line: Paying radically "over the market" rate for labor isn't always such a good idea.

Also you seem to be counter-argumenting yourself here.
Apple needs to do well for those 235,000 workers in China, doubling or why not tripling their salary.
On the other hand, Apple should move those 235,000 jobs to the US, leaving 235,000 people unemployed so they (and their families) will probably starve to death. Great thinking. You should try applying for a job at SaveTheWorld Co.

Truth its very easy for Apple to turn a blind eye to this whole issue then pay off Nightline to go have a look and make it look as though everything is sweet with rainbows and fluffy clouds. Whatever way you look at it Apple condone the use of underpaid cheap labour for maximum profit. The problem like everything else corporate is: GREED. Its all about the spondullies.
You really think that Tim Cook needs to earn millions of dollars a year??? Does anybody??? No but the balance between Apple and the workers at Foxconn could certainly be levelled out.

$1.78 an hour is underpaid for us. To them it's a very decent salary.

As for Tim Cook: with great responsibility comes great salary. That guy has earned it fair and square. If your iPad breaks down, who will you blame? Tim Cook? Or Xiua Xenghui?

 

[gnasher729]

You should take a look at Germany. Their economy is doing amazingly well, despite the crisis, yet they have maybe the strongest unions in the world.

That is mostly because German unions, and German employers as well, have a totally different attitude to things.

From what I hear (no personal experience), US unions seem to be more like a mob finding cushy jobs for lazy people and prevent work from getting done. These horror stories that you get into trouble for plugging the power cable of your computer into a socket instead of waiting for a union electrician to turn up, both German employers _and_ German unions could only laugh about the stupidity of that. In the UK, unions seem to be all about class war. Destroy the enemy (which is the employer). On the other hand, employers who have nothing but contempt for the people they employ. There was a TV show about the destruction of the UK car industry: Apparently, in the UK a middle manager at Ford spent about 75% of their time handling unions (and 25% figuring out who to improve the building on cars), while in Germany a manager in the same position spent on average 4% of their time with unions.

In Germany, the attitude is that the unions want a big piece of the cake, and the best way to get a big piece is to make sure that you have a big cake in the first place. And the employers look at it more or less the same way. When there is a crisis, the question for everybody is: How can we make the business run well and profitable so that it (can employ lots of people and pay good wages if you are union) / (makes lots of profits if you are employer).

 

[babyj]

Think the people arguing for Apple to move production to the US are living in one of Steve's reality distortion fields. The funniest part is that as they sit there typing their posts they're; sitting on a chair made in China, holding a pen made in China, wearing clothes made in China, looking through glasses made in China, have tooth crowns and bridges made in China and so on made in China.

It's not just about the wages it's more about less restrictive business practices. No unions, minimum wages, legislation, strike action and so on to worry about.

People moan all the time in the UK about production moving abroad. They're in the same distortion field. If we made everything here it would be twice as expensive and it wouldn't work properly.

Production will stay in China until they're not the cheapest anymore.

 

[CplBadboy]

_capsrage_ apple does not own foxconn!!! _capsrage_

And about the whole "Does Tim Cook need to earn millions?" guess what, having talent affords you a larger salary, this isn't communism.

You know whats funny? you can ALWAYS tell whos untalented by their position on wages.

"You know whats funny? you can ALWAYS tell who's untalented by their position on wages"

Really you believe that?? So would you say that a Soldier, Sea or Airman that serves his country is untalented even though he or she doesn't exactly earn a large wage packet??? Ill tell you straight up that men and women like that are pretty talented in what they do.
My guess is that their balls are way bigger than Tim Cooks and their service could easily justify a hefty wage packet. But is doesnt. Thats a pretty shallow and dumb comment you made at the end right there. My guess is (like most of those in the shiny arse brigade) Tim Cook wouldnt have known a hard days work in his life. But hey if you think thats worth mega millions then fair play to ya. Enjoy worshipping him.

Apple may not own Foxconn I appreciate that but its a tactical sly business move in the fact that they can easily turn round and say "Oh they only make our iPads, how they live and get paid is nothing to do with us" If that was the case Foxconn would be selling iPads to Apple for higher return but they arent. Apple run the show, Foxconn just manages it day to day. The cheapest way possible and Apple arent culpable for anything. So from what Ive gathered is that to be super rich and justify mega million pound salaries is you need to be smart, but more than that - is sly. Not talented.

 

[babyj]

In the UK, unions seem to be all about class war. Destroy the enemy (which is the employer). On the other hand, employers who have nothing but contempt for the people they employ. There was a TV show about the destruction of the UK car industry: Apparently, in the UK a middle manager at Ford spent about 75% of their time handling unions (and 25% figuring out who to improve the building on cars), while in Germany a manager in the same position spent on average 4% of their time with unions.

The unions in the UK are a lot less powerful than they were and their days are numbered - they're mainly limited to the public sector, at least the ones that cause trouble are.

I'm guessing that show about the UK car industry was a few years back? Things have changed and improved a lot now, it's actually growing and is one of the most efficient work forces in the industry. There is a massive Honda factory and BMW assembly plant where I live. Can't remember the last time there was industrial action, even when they moved to a reduced hours week a couple of years back it was done via negotiation and agreement with the union.

 

[CplBadboy]

Think the people arguing for Apple to move production to the US are living in one of Steve's reality distortion fields. The funniest part is that as they sit there typing their posts they're; sitting on a chair made in China, holding a pen made in China, wearing clothes made in China, looking through glasses made in China, have tooth crowns and bridges made in China and so on made in China.

It's not just about the wages it's more about less restrictive business practices. No unions, minimum wages, legislation, strike action and so on to worry about.

People moan all the time in the UK about production moving abroad. They're in the same distortion field. If we made everything here it would be twice as expensive and it wouldn't work properly.

Production will stay in China until they're not the cheapest anymore.

Wouldnt work properly??? Whys that exactly?? Im sure a MacBook made in the US, UK or China using the same machining techniques assembly processes etc. would be exactly the same????

 

[marcusj0015]

"You know whats funny? you can ALWAYS tell who's untalented by their position on wages"

Really you believe that?? So would you say that a Soldier, Sea or Airman that serves his country is untalented even though he or she doesn't exactly earn a large wage packet??? Ill tell you straight up that men and women like that are pretty talented in what they do.
My guess is that their balls are way bigger than Tim Cooks and their service could easily justify a hefty wage packet. But is doesnt. Thats a pretty shallow and dumb comment you made at the end right there. My guess is (like most of those in the shiny arse brigade) Tim Cook wouldnt have known a hard days work in his life. But hey if you think thats worth mega millions then fair play to ya. Enjoy worshipping him.

Apple may not own Foxconn I appreciate that but its a tactical sly business move in the fact that they can easily turn round and say "Oh they only make our iPads, how they live and get paid is nothing to do with us" If that was the case Foxconn would be selling iPads to Apple for higher return but they arent. Apple run the show, Foxconn just manages it day to day. The cheapest way possible and Apple arent culpable for anything. So from what Ive gathered is that to be super rich and justify mega million pound salaries is you need to be smart, but more than that - is sly. Not talented.

Yes, I would, as they're simply paid guns.

 

[diazj3]

hmmm, why am I not surprised?

Perhaps because...

• Nightline is produced and broadcasted by ABC.
• ABC is owned by Disney.
• Disney has a very close relationship with Apple.
• Apple has Disney's CEO Robert Iger on its board of Directors.

Hence, no surprises.

 

[Hattig]

Whatever way you look at it Apple condone the use of underpaid cheap labour for maximum profit.

Erm, the workers are paid quite well for their local economy, and also have the option if they choose of staying in cheap work-provided dorms. Work even provides a cheap canteen for lunch and dinner.

 

[marcusj0015]

hmmm, why am I not surprised?

Perhaps because...

• Nightline is produced and broadcasted by ABC.
• ABC is owned by Disney.
• Disney has a very close relationship with Apple.
• Apple has Disney's CEO Robert Iger on its board of Directors.

Hence, no surprises.

Exactly, I'm not sure what to make of the host pointing out their relationship, on one hand it could be a facae to make peopel think they're telling the tuth so no need to research, on the other, they could actually be telling the truth.

 

[babyj]

Wouldnt work properly??? Whys that exactly?? Im sure a MacBook made in the US, UK or China using the same machining techniques assembly processes etc. would be exactly the same????

Many years ago I worked on a production line. It was low paid and full of temporary staff, no one cared (even about losing their job) and that was reflected in the quality of the output. Don't think anything has changed.

 

[BobbyRond]

hmmm, why am I not surprised?

Perhaps because...

• Nightline is produced and broadcasted by ABC.
• ABC is owned by Disney.
• Disney has a very close relationship with Apple.
• Apple has Disney's CEO Robert Iger on its board of Directors.

Hence, no surprises.

Did you hear the first thing he said? He actually said all that out loud... That isn't something you Sherlocked all by yourself...

He said that as a journalist, he would only do the story if he was allowed to tell the whole truth. So maybe, yes, that might be a lie. But if journalists are liars, then the positive news might be exaggerated. The same thing can be said about the negative news. Don't you think?

 

[Lesser Evets]

So they make $427.80/mo. Rent is cheap and so is food. They can save a lot of money and hopefully send some home to their families.

I WAS THINKING SO!

If I could work somewhere and pay less than 1/6th on living space and food, I'd be thrilled. Pay amount is relative compared to cost of living, and obviously there cost of living in China is generally far cheaper. I'm sure anyone could monkey data and show the cost of living in the most-upscale parts of cities and then scream about injustice, but not everyone can do that ANYWHERE in the world. Never will.

The work situation seems a win-win, seeing that they need work over there to stop people from rioting and trampling and destroying. We (developed nations) need them to work for us and we will pay. They want to work. Problems? If there are cultural differences and governmental regulation differences between the liberal expectation of how employers should treat their employees, it's more of a problem with China's central government.

 

[BobbyRond]

*Everything you said so far*

Oh and please stop creating new arguments, come up with some actual facts (as we all do) and don't just go into details about stacking apartments into apartment blocks, but also try to counter all the other arguments.