Chinese manufacturing behemoth Foxconn Technology announced Sunday that it is raising wages up to 25 percent for its 1.2 million-member workforce. The world’s largest manufacturing company also promised to reduce overtime for workers who are routinely compelled to work 14-hour days seven days a week. Why? The apparent answer is fourfold: workforce suicides followed by unrest at Foxconn, international agitation, a stellar New York Times exposé, and the unstoppable magnification of the web.
Of all those factors, I would rate the unstoppable magnification of the web as the primary factor. The articles in the Times, by David Barboza, Charles Duhigg, and Keith Bradsher, beginning with “How the U.S. Lost Out on iPhone Work,” which appeared on January 21, and followed by “In China, Human Costs Are Built Into an iPad,” which appeared on January 26, sparked massive U.S. scrutiny of the working conditions behind America’s favorite toys. But the traction gained by the repetition of the themes and facts of the articles in every nook and cranny on the wired world so crucial to Apple is what really made the difference.
The Times series should be a contender for a Pulitzer Prize for its impact here and abroad. The coverage it inspired, from pipsqueak bloggers, to the L.A. Times series, and ABC’s Nightline, seems to have done the trick. Apple announced that a nonprofit organization would monitor working conditions at Foxconn. Foxconn announced that wage boosts in the range of 16 to 25 percent would bring worker wages to the $400 a month mark.
Regardless of how this compares to wages in the West it’s a big deal in China. It appears to be enough to spark a paradigm shift at Foxconn. That shift, crazy to say, seems to be a move away from human capital and toward robotics and automation. Yes, eschewing the sweet spot of wage growth and job security enjoyed by American factory workers in the 1950s and 1960s thanks to unions, Foxconn seems poised to go from medieval exploitation directly to worker redundancy. And I suppose this should be a lesson to all that Chinese business has become an ardent student of unreconstructed capitalism and, furthermore, that it can change course in a heartbeat.
According to an article published in the Times on Monday, reported by Barboza from China, entitled, “Pressure, Chinese and Foreign, Drives Changes at Foxconn,” “Foxconn has announced plans to invest in millions of robots and automate aspects of production.”
What effects this initiative will have on the numbers of workers employed at Foxconn plants remains to be seen. But it does portend that a new wave of automation may prevent any appreciable numbers of manufacturing jobs to be repatriated to the U.S. Certainly, some manufacturing technician positions will return, but the idea that large numbers of line workers will ever onshore remains highly unlikely, for this industry at least.
At any rate, kudos to Apple, for undoubtedly putting pressure on Foxconn to clean up its act. Yes, it’s late, and it's too little, but it is change. Apple has far too much to lose if an Arab Spring ever comes to public perceptions of worker exploitation in China. And yes, the events of the last few weeks do represent the first sprigs of a movement that could lead to the perception that Apple’s cash cows are dirty devices.
In a more perfect world, Apple would not be able to outrun a significant wave of rising awareness. But despite Apple’s close controls over its retail brand, the purchasing public cannot resist driving prices to the iBottom using the Amazon button, or whatever mechanism is available to thwart reasonable wage-price relationships in the mean old macro world. It certainly isn’t news that our consumer instincts overwhelm our instincts for job preservation, but that isn’t going to change anytime soon. Nor will the sordid realities of Chinese manufacturing.
However, for a perhaps brief but shining moment, worldwide media pressure has opened a crack in the façade of China, Inc. Even if their workers hold jobs that used to be "ours,” it is a good thing to see workers anywhere make a major stride towards a living wage, and for the economic system that virtually enslaved them to be corrected ever so slightly in a manner that will indirectly benefit workers around the globe, including presumably, here.
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P.S. For a wicked parody submitted by a reader, try this link, from whoacomedy.com.