And what is life like for a cog in China’s labor-intensive factory model? Mr. Yuan, with the approval of his supervisor, described it for The New York Times last week before and after his Thursday shift.
But the argument that if you pay Chinese workers more, they'll have to raise prices is, I think, wrong. I've made this point before, but the labor cost for final assembly is actually fairly low. These people who run around saying stuff like "An iPad would cost $7000 if you paid U.S. wages!" are just being absurd.
"Physical intimidation of a Foxconn employee, 25 year-old Sun Danyong, and a possibly-illegal search of his house may have led to suicide after an iPhone prototype in his possession was lost. Foxconn is Apple's long-time manufacturing partner for the iPhone. Entrusted with 16 iPhone prototypes, Danyong discovered that one was missing and searched the factory for it. When it didn't turn up, he reported the incident to his boss, who ordered his apartment searched. There are reports of physical intimidation by Foxconn security personnel. This ended tragically on Thursday at 3 AM, when Danyong jumped from his apartment building to his death."
"Workers at Taiwanese electronic outsourcing manufacturer Foxconn are getting a pay raise after a series of 13 suicides, including three in three consecutive days. According to an article by state-run newspaper China Daily, Apple concluded that the main cause of the suicides is low wages. (The media has also attributed the suicides to a variety of other factors — everything from the semi-military style of management, to long overtime, to China's one-child policy, and Foxconn paying too much compensation to the family of suicide workers, thereby encouraging copycat suicides.) Apple plans to subsidize raises using its own products (Google translation; Chinese original here) — the first one being the iPad. This would raise the outsourcing cost from 2.3% to 3% of the iPad's sales price. The article does not say the amount of the raise per worker, but it is rumored to be about 20%, according to other Chinese news sources."
"Foxconn, the manufacturer whose clients include Apple, Dell, and HP, is on the verge of pulling out of China after a spate of suicides. The CEO has accused workers of killing themselves for financial compensation, and the company has stopped suicide payments to suicide victims' families. Foxconn's CEO also told investors that it is considering moving its production operations to Taiwan, and automating many parts of its business, a move which could see 800,000 workers lose their jobs."
What's interesting about the Chinese model is that the workers actually live at the factory, dormitory style. That obviously cuts down on living expenses, and therefore the wages you need to pay.
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