Sweatshops in China

IPhone 5, Apple Inc’s newest product, has been one of the company’s most aggressive international rollouts. In spite of solid demand, however, the supply constrains somewhat negatively affected its sales. What further complicated the supply problem is that two riots broke out in sequence in two factories of Foxconn Technology, Apple’s largest contract manufacturer, disrupting production temporarily.Image

Foxconn Technology, a Taiwanese multinational electronics manufacturing company, which assembles Apple’s iPhones as well as making components for other global electronic firms, has 13 factories in nine Chinese cities and employs about 1 million people in China. Two years ago, a string of suicides at a factory in Shenzhen China caught media’s attention, and since then, the company has faced accusations of poor working conditions and mistreatment of workers at its operations in China.

Even though Foxconn says that it has been spending heavily in recent month to improve conditions and rise wages, riots are still seen repeatedly.

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Workers clean up glass shards from the broken windows of a security room near paramilitary police vehicles parked near an entrance of a Foxconn Tech-Industry Park in Taiyuan, Shanxi province, September 24, 2012. Credit: Reuters/Stringer

On September 23, a mass brawl erupted in Taiyuan factory, about 2,000 Chinese employees involved. While Foxconn claimed that this incident was escalated from a personal dispute between several employees, comments posted online suggested that security guards beating up two workers provoked other workers to fight back. No matter what the cause was, workers may bear strong anger and resentment towards the factory, and violence is a way of outlet. Just a few days after that, China Labor Watch announced a strike occurred at Foxconn’s Zhengzhou factory on October 5. It is said that there were 3,000 to 4,000 production people on strike, incensed by overly-strict demands on product quality as well as demands they work though week-long statutory holidays. Obviousely, tensions have never been relieved in Foxcoon’s factories. Apple and Foxconn are under pressure to improve conditions, reduce overtime and raise wages at plants across China.

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Photograph: Ye Fudao/worker for Foxconn @Zhengzhou factory

Ethically, Foxconn’s treatments towards workers are intolerable and human rights of these workers are absolutely abused. Yet, this situation seems to be an inevitable stage for China to go though.

The existence of these sweatshops in China largely attributes to the large amount of cheap labor, which nonetheless brings comparative advantage to China in International trade. Under globalization, specialization increase efficiency of production in a way that each country specializes in the domain where its comparative advantage lies. Lack of technology and the presence of majority of unskilled-workers in labor force put Chinese manufacture at the low-end of global manufacturing chain. If wages are raised forcibly in these factories, China may loss its competitive edge, and companies will seek cheaper labor in other countries to build factories, which can incur large-scale unemployment in China. Under such circumstances, it is reasonable to assume that workers may be more willing to work in the poor condition so that they can at least feed themselves and support family than to loss job. This rationale can apply to child labor in Africa, an even more severe issue induced by poverty and destitution.

Consequently, to improve workers’ situation in Chinese sweatshops is not as simple as to just force the factories to raise wages. Instead, it is an issue that can be solved through gradual transition to high-end manufacturing. At present, to guarantee workers’ legal rights and avoid violence, authorities should figure out means of resolving disputes and set up dialogues for workers to express their wills.

Sources:

http://www.reuters.com/article/2012/09/24/us-apple-iphone-idUSBRE88N0HL20120924
http://www.reuters.com/article/2012/09/24/us-hon-hai-idUSBRE88N00L20120924
http://www.chinalaborwatch.org/news/new-433.html
http://www.reuters.com/article/2012/10/05/us-apple-foxconn-idUSBRE8941JF20121005
http://www.chinadaily.com.cn/business/2012-02/03/content_14531982.htm

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