On April 11, EPI hosted an authoritative panel of Chinese researcher-activists and international labor leaders to discuss the labor practices of Apple, Inc., and its suppliers around the globe. Five important themes emerged:
Apple workers in China endure extraordinarily long hours (in violation of Chinese law and Apple’s code of conduct), meager pay, and coercive discipline. The various U.S. media stories that have recently brought attention to the treatment of workers in China assembling Apple products have painted a disturbing picture of long and difficult working conditions, which even contributed to a series of suicides. The panelist’s two Chinese research-activists, who are in constant contact with factory workers at Apple’s key Chinese supplier (Foxconn), confirmed that these individuals continue to face deplorable working conditions. They still work as much as 70 hours a week, in violation of both Chinese laws and Apple’s code of conduct, and wage increases have been offset by inflation and higher deductions from the employees’ paychecks, leaving earnings at levels insufficient to meet even basic needs. Starting pay at one of the factories is $230 per month. Similarly, the Fair Labor Association’s recent investigation found that nearly two-thirds of Foxconn workers “thought that their salary was not sufficient to cover their basic needs.” Disciplinary approaches are frequently harsh.
Debby Chan of Students and Scholars against Corporate Misbehavior (SACOM) testified that Apple and Foxconn use the forced labor of involuntary student “interns” to overcome labor shortages and reduce payroll costs. Students between the ages of 16 and 18, enrolled in vocational school programs in fields that often have nothing to do with the production of Apple products, are nonetheless forced to take 3-12 month internships where they work oppressive overtime and illegal night shifts. Students have been told they cannot graduate without working for Foxconn and some have been threatened with expulsion.
It’s up to Apple. Apple has the responsibility and ability to reform these working conditions. Although the Chinese workers are employed by Foxconn and not directly by Apple itself, it is Apple that has the responsibility to ensure that working conditions are reformed. First, Apple can choose its suppliers; it does not have to contract out to a manufacturer where working conditions are so severe. Second, Apple sets the unit price for Foxconn’s products so low that Foxconn makes a profit of less than 2 percent, while Apple’s own profit exceeds 30 percent. As long as Apple refuses to pay more for its production, Foxconn will squeeze and pressure its employees.
Apple could pay more for Foxconn’s work, and demand that these payments be passed onto the workers. The additional costs would be of little consequence to Apple. Foxconn’s assembly costs (which include non-labor costs) are approximately $15 per iPhone, a tiny fraction of the average price paid by wireless carriers of $630 and just 5 percent of Apple’s estimated $319 profit per phone. So Apple could double what it pays Foxconn and still make enormous profits or perhaps charge customers slightly more. Or it could draw on its enormous cash reserves. Or it could even pay its top officials a little less. Apple CEO Tim Cook received $378 million in pay last year.
Apple and the Fair Labor Association have an unsuccessful track record when it comes to implementing improvements in labor conditions. A particularly discouraging aspect of the panelist’s presentations was their description of the track record of the Fair Labor Association (the group Apple hired to investigate working conditions at Foxconn) and Apple itself. Three panelists (Li Qiang of China Labor Watch, Scott Nova of the Worker Rights Consortium, and Chan) agreed that over the past 10 years the corporate-funded compliance and accountability model exemplified by the Fair Labor Association has failed to improve the rights of workers to represent themselves or bargain collectively in the hundreds of Chinese companies and factories that have adopted it. Nova said this failed track record is equally clear in the garment industry, where real wages in many countries are lower than when the FLA and similar third-party monitors first got involved in the 1990s. Apple, in turn, has a track record of broken promises when it comes to reforms in the working conditions of their suppliers. Since 2006, they have been promising to improve conditions in China, but significant reforms have not occurred.
Unions and country standards can help. Foxconn in Brazil treats its Apple workers much better than Foxconn in China. It almost goes without saying that exploited Foxconn workers in China have nowhere to turn for help in their country; their problems are ignored by the government, are barely covered by the Chinese media , and they have no real union to defend them. The situation is different when it comes to the new production of Apple products by Foxconn in Brazil. The government of Brazil demanded certain conditions of operation, and there is a union working actively on their behalf. The effects of this work were described by panelist Luis Carlos de Oliveira, the vice president of the Metal Workers Union of Jundiai, Brazil, which represents Foxconn/Apple employees at a factory that manufactures iPhones.
Working a maximum of 44 hours a week (and not up to 70 hours), employees in Brazil earn twice the basic monthly salary of their Chinese counterparts, have a guarantee of 30 days paid vacation (versus five days in China), four months of paid maternity leave (none in China), as well as guaranteed severance pay and other benefits that far surpass what Apple/Foxconn offers in China. These comparisons can be found in this table.
Needed reforms can occur, but only if public pressure on Apple is sustained. Nova and Larry Cohen, President of the Communications Workers of America, described the role of advocacy in ensuring reforms. Their presentations made clear that if concerns over the conditions of the Chinese workers building Apple products recede from the public eye, the chances for real progress diminish significantly. The review of the poor track record of Apple and others makes that clear; talked-about reforms in working conditions, often spurred by bursts of publicity, do not come to fruition after that publicity dies down. The need for public pressure is especially critical since the recommendations for reforms by the Fair Labor Association include no accountability mechanisms. Neither Foxconn nor Apple will be fined or face legal consequences if they do not move forward with reforms.
But Apple can be punished in the arena of public opinion. Apple takes great pride in its undeniably remarkable products and the positive images accordingly associated with its brand. The deplorable working conditions faced by the workers assembling those products, if focused upon, justifiably tarnish this brand. In other words, Apple is vulnerable to public pressure and, as discussed earlier, easily has the resources to ensure that working conditions improve. It is up to the public, and consumers of Apple products, to demand that such changes occur.