The Apple partner cites shortage of skilled laborers as main reason for increasing wages

Jun 3, 2010 08:27 GMT  ·  By

Foxconn has reportedly raised the pay for all of its Chinese production workers by 30 percent, as of June 1st, according to parent company Hon Hai. Shift hours, however, remain an unresolved issue, reports say, while the pay raises are reportedly not about suicides, but rather because of a shortage of skilled laborers. Foxconn has declared recently that it is on track to increase the salary of its workers.

Still, the situation is so bad at Foxconn, these reports say, that workers are tempted to drop parts for an excuse to bend over. Foxconn is a major manufacturer of electronic parts for the likes of Apple, Dell, Sony, Motorola and HP.

Although Foxconn has raised its workers’ pay by an average 30 percent, the electronics manufacturer says the raise has nothing to do with the reported string of suicides at its factory in China. Apple’s CEO himself reportedly took upon himself to address the matter, saying, “We send over our own people and some outside folks as well, to look into the issue,” according to the Wall Street Journal. Jobs also said, “Foxconn is not a sweatshop. They’ve got restaurants and swimming pools…. For a factory, it’s a pretty nice factory.” Jobs noted that the recent suicides at Foxconn were still below the national average in the U.S. “But this is very troubling to us,” he said.

According to a report by Macworld, the suicide rate among the Chinese company’s workers is also well below the national average. In keeping with to a Nov. 2008 research paper published in The Lancet medical journal, China averaged 15.05 suicide-related deaths per 100,000 people between 2000 and 2006. While the survey cannot be too relevant for the particularities produced by working at Foxconn, the number of deaths, so far, put Foxconn below the national average by quite a margin. The manufacturer reportedly employs over 540,000 workers, although some reports suggest the number is lower by 100,000.

The Macworld report also reveals that the recent events concerning Foxconn’s production lines have caused other Taiwanese contract manufacturers to take a closer look at their own operations.

One of them is Compal Electronics, the world's second-largest contract manufacturer of laptops. During a press conference in Taipei, the company’s head, Ray Chen, reportedly said, “We’re very concerned about this situation at Foxconn.” The company is now taking a hard look into working conditions at its own factories, but has no plans to increase pay for the time being.

Michael Phillips, director of the suicide clinic at the Shanghai Mental Health Center, believes that there is some good coming out of the attention on Foxconn – a renewed effort to build a better strategy of suicide prevention in the country. “China has yet to develop a national strategy to tackle suicide as a public-health problem,” he said.