Electronic manufacturing giant Foxconn Technology has increased the wages of its assembly line workers by 16-25 percent, the third hike since 2010, the company announced in a press release yesterday.
Foxconn spokesman Liu Kun told Shenzhen Daily that the increased labor cost was a pressure for Foxconn, but one the company could handle.
“As we are in this business, we will have to deal with all the inflations. Otherwise we will be abandoned by the times,” he said.
For workers in Shenzhen, a major manufacturing base for Foxconn, the increase raises monthly basic salaries to 1,800 yuan (US$283) for workers in a probation period and 2,200 yuan for non-probationary workers. Liu said 95 percent of Foxconn interns pass the probation period.
The pay hike makes Foxconn’s basic wages greater than Shenzhen’s minimum wage of 1,500 yuan. Shenzhen’s minimum wage is the highest on the Chinese mainland.
The pay hike was effective Feb. 1, according to the announcement.
The basic wage for workers at Foxconn’s Shenzhen factory was 900 yuan three years ago.
In the announcement, the company also promised to reduce overtime and provide more training programs.
The intent is to let workers “earn the same amount or more than they did before, without having to work overtime,” the announcement stated.
“The pressure (of inflation) is certainly there. The wage rises quicker than our profit. However, Foxconn is a large company and through improved management and quality, we will be able to cope with the pay rise and other inflations such as the increasing cost of materials,” Liu said. “Increasing wages helps retain good workers. This can save the cost of recruitment, and improve product quality.”
Liu did not say if Apple would shoulder part of the increased labor cost. Foxconn is a major producer of parts for Apple products including iPads and iPhones.
While many factories in Southern China are facing a labor shortage, Liu said Foxconn’s Shenzhen factory has plenty of job applicants, thanks to “higher wages and a transparent welfare system.”
“The free laundry alone at the Shenzhen factory costs 70 million yuan,” he said, adding that the company also provides subsidies for families of poor workers.
Foxconn’s pay rise announcement came as Apple, last week, engaged the Fair Labor Association (FLA) to audit Foxconn’s plants in China.
The FLA is interviewing thousands of employees about working and living conditions including health and safety, compensation, hours and communication with management.
FLA Chief Executive Auret van Heerden told Bloomberg that the group had found “tons of issues” at Foxconn plants so far, adding that he expects “to see some very significant announcements in the near future.”
At the same time, the FLA’s preliminary assessment stated that the company’s plants had conditions that were better than most.
“The facilities are first-class; the physical conditions are way, way above average of the norm,” van Heerden had said earlier.
Foxconn, one of the world’s largest electronic manufacturers, supplies companies including Apple, Dell, Sony and Microsoft. But the company has faced repeated negative publicity for its alleged harsh working conditions. Foxconn employs about 1 million people in China.
In 2010, a string of suicides, involving employees jumping off factory buildings, prompted Apple to investigate. Last May, an explosion at a Foxconn factory in Chengdu killed three workers and injured more than a dozen.
(By Helen Deng)