Just read a CNN article entitled, “When will workers share in Apple’s wealth?” This article was written by Scott Nova, executive director of the Worker Rights Consortium, a “labor rights-monitoring organization that investigates working conditions in factories around the world. 

Nova attacks Apple on many fronts in his article, but it is the following that really got me thinking:

And if Apple genuinely “cared about every worker,” it would pay every worker a living wage — enough for workers to achieve a minimally decent standard of living, support their families and even save a bit toward a better future. Today, barely 1% of the retail price of an Ipad goes to the workers who make it; 33% goes to Apple’s profits. Apple’s profits are so high, and its global labor costs so low, that it could triple the wages of its 700,000 manufacturing workers and help them achieve a living wage (just a few dollars an hour in China), and still make $40 billion a year. A wage increase of 16% to 25% at Foxconn, announced today as Apple’s public relations blitz reaches a crescendo, doesn’t come close.

Where did Nova get his numbers regarding what constitutes a “living wage” in China. And what does constitute a living wage in China? Does that not depend on the city? What about the fact that Foxconn typically provides its workers with room and board, in addition to their salary.

Again though, what constitutes a “living wage” in China? What do you think?

UPDATE: Stan Abrams over at the always excellent China Hearsay did a post, entitled, Profit Sharing and China’s Living Wage, did a post taking Nova to task for, among other things, using “squishy language” and for the following:

This [calling for Foxconn to pay its workers a decent wage] sounds great and quite reasonable, but of course the writer has no idea what “minimally decent” means in China, in Shenzhen or anywhere else. He doesn’t know what it takes to support a family here, and I guarantee that the complex matters of health, education and housing expenditures and their related effects on savings are matters that he did not research prior to writing the Op/Ed.

FURTHER UPDATE (2-24-2012): The New York Times just came out with an article, entitled, “How Much Do Foxconn Workers Make?” that seeks to discern exactly what Foxconn employees make.

  • Mark

    I think the article you quote is just another example of “China bashing” in the U.S. I regularly visit Foxconn in Shenzhen and Chengdu and I can say I wish the working conditions in my first year out of college were as good. Foxconn’s factory workers have received 2 or 3 fairly significant pay raises in the last 2 years. For entry level jobs, Foxconn is a bit more than other employers hiring non-skilled workers in both Shenzhen and Chengdu.
    You pose a good question. I have never seen (I don’t think) any government statistics on what is considered “living wages.” This isn’t the U.S. after all.

  • Roger C

    In a few lines, this Article (not Dan’s comments) sums up pretty much all the issues in modern, globalized capitalism, while .
    – Companies aren’t people, and should’t be treated like or considered as people. They are transmission belts for goods, services, ideas and, of course, money. An Apple margin of 33% doesn’t go to some fat guy called Apple who messily devours it behind a desk made of the last mahogany tree on earth. It goes to new products and ideas, on top of Apple’s already enormous money pile, or to shareholders (although, to my knowledge, Apple hasn’t done a dividend since Steve came back in 1997). If Apple is going to pay more on sourcing product, either consumer prices will go up, or Apple’s spending patterns will shift. Either way, this will be political with Apple. Also, do we really want people to step in and dictate profit margins on enterprises?
    – If Apple triples the living wage in China, other companies will have to do so as well. This may render them less competitive, and in the end cause more unemployment. Also, Foxconn have already signalled their intention to automate their production line more, losing more Chinese jobs to machines. Wage hikes may cause inflation, which will shift the goalposts of what a living wage is.
    Now don’t get me wrong, I’m not in favour of sweatshop labour by a long shot, but the iPad and the concomitant brouhaha over Apple products we have seen in recent years is nothing more than a symptom of a wider lack of ideas on how to embed globalized companies into the local societies they’re part of. And this is, perhaps, much more important than a wage hike in one factory somewhere in China which will bring fewer benefit to fewer people than mr. Nova might think.

  • Lintex

    I think I know what you are getting at here and if I’m right, I agree with you. You seem to be saying that this article (like so many on Apple) is written as though the Foxconn employees are in Detroit or Seattle and not China. This article actually makes no sense at all because it is never clear on what Foxconn workers are paid, nor how that compares to other factories or to the cost of living where the factories are located. If someone would quantify these things I would listen but this guy is just pushing an anti-Apple/Foxconn agenda in an effort to push jobs back to the United States.

  • I have found that this not only applies to Foxconn but just about every place.
    At my factory where I work, everyday I hear someone complaining that they are not making enough money. When in fact they are making the same as all the other factories in the industrial area. They are also mostly unskilled labor and office workers.
    Just the other day I heard a few coworkers talking about wages and about the fact that one of their husbands makes over 100K a year. 8,333 a month. He is an architect. She also stated that there is a lot of people in this city making 200K a year. Which I think is true, but it’s not the average person.
    This doesn’t really relate to Scott Nova’s post, but I think that a lot of workers here are over valuing their own self. They expect 30% year after year in raises just because, I can only assume, they see the rich people getting richer and think they should too. Which could be true, but I don’t think that wages are actually rising that fast. Only in some areas.
    You can live very very cheaply in China. I’ve done it, I see Chinese do it everyday. I’m not sure what Mr. Nova is trying to say. Not everyone need to buy an iPhone, luxury purses, cars, etc. You can certainly live without any of those things.
    I know of two people that I work with that make the same as a Foxconn employee and both have a house, one has a car, they have new Android Chinese smart phones. they look like they are living to me.
    Perhaps Mr. Nova is saying that they are not living up to a America level of living. Well, to that I say, I making more money that I would in the States, can’t even live an American level of living. It’s too expensive. Everyday things that would be cheap anywhere else are doubled here because of taxes and the fact that only a small group buy it, namely the rich people, so that drives the cost even further. So even for an American in China, it’s hard to live an American level of living.

  • ryan

    I like the questions you ask. I have the same ones. This article is just bashing but the issues it raises are real.

  • http://www.pcworld.com/article/250298/foxconn_to_increase_workers_wages_in_china.html
    According to the above link, Foxconn workers in Shenzhen now make 2200-2500 RMB / month.
    The legal minimum wage is 1500 RMB.
    If rent, food and other basic needs are cared for, that’s 2200-2500 RMB for personal spending or savings.
    A few posts down, this blog listed salaries in major mainland cities, where a junior secretary would make 2500 RMB / month. And she wouldn’t have rent and food covered.
    So an unskilled Foxconn factory worker, living and eating for free in a dorm, makes as much as an office worker in Shanghai?
    Plus, if the legal minimum is 1500 RMB — and there are reports of local factories paying below that — then the Foxconn guys have it good.
    I’m not saying Foxconn is totally right, or that I advocate underpaying or mistreating workers. But in the context of mainland China, this doesn’t sound terrible.
    That said, I don’t think the above article is “China bashing.” It just sounds like vague writing and sloppy reporting.
    From the outside, 2500 RMB per month sounds awful. Never mind America. Even in Hong Kong, that would be considered grossly underpaid. Even migrant Filipina maid make almost 4000 RMB per month, and they have room and board covered.
    But the cost of living is so vastly different — you can’t compare apples with oranges.

  • Sounds like another ignorant causehead. #’s I’ve seen – which seem more accurate (but who knows – I included here http://www.forbes.com/sites/jordanterry/2012/02/19/so-what-if-apple-has-a-chinese-labor-problem/
    Also: 1. what about the market for labor? Supply and demand and all? As far as I know, no one is forcing Chinese to go work for Foxconn, while the working conditions may not be up to U.S. standards, seems fairly free-market-ish, at least for such a rapidly expanding emerging market.
    2. So Apple, with a fiduciary duty to shareholders, should just triple the amount of money its supplier pays its employees? Just because they “deserve” it and because Apple can afford it? Yea, ok.

  • BT

    Why are we talking now about a living wage? China’s wages are rising so fast companies are going to leave and pay a less than living wage elsewhere?

  • I think there’s a difficulty with the idea of a living wage, which is that in the past, it was assumed that it would cover housing. Today, that doesn’t really seem to be the case anywhere. I don’t know many people whose wages could really cover the cost of buying a house if they didn’t get a boost from the sale of another property, or a donation by their parents. Not in the UK and certainly not in China. If you wanted a living wage that allowed a person to actually live in a home, rather than a dormitory, in China, you’d have to at least triple what factory workers make.

  • Skippy

    Dan, this piece is so weak I don’t know why you even bothered with it. There’s no definition of a living wage anywhere, much less in China. It’s a leftist construct that is used to criticize big companies no matter what they pay, which is exactly how it was used here.

  • Richard

    “…enough for workers to achieve a minimally decent standard of living, support their families and even save a bit toward a better future.”
    The entire basis for migrant labor in China is that many workers do indeed earn enough to support their families back home, which is more than many would have earned had they stayed in their villages with no job prospects.
    A new Western restaurant just opened up near me in Guangzhou. Starting monthly wage for waitstaff is 1600 RMB/month. Meanwhile, that same unskilled person can now walk into hundreds of factories in the PRD and easily start earning 2500 RMB/month, with free room and board and free or subsidized food. Some factories (including those of my employer, and probably Foxconn as well) have medical clinics on-site offering some level of free healthcare. Due to the labor shortage, many factories are offering massive pay hikes or other incentives to workers who will agree to stay for more than 12 months. Some factories are doubling pay within 1-2 years for longer term workers. Right now, it is a very pro-labor market in South China due to the labor shortage.
    Yes, there are still sweatshops in China with terrible working conditions and underage labor. Foxconn is not one of them, nor are the vast majority of other foreign-invested factories. MNCs have led the way on working conditions and labor rights in China. The Chinese workforce knows this very well. Why doesn’t American media?

  • Hua Qiao

    It’s less a slam memo on China than it is an attack on free market. While Mr. Nova is at it, why does he not demand that Apple take care of the other shortcomings of the PRC regime that adversely impact quality of life? After all, isn’t that what we are really interested in? Quality of life?
    How about Apple ponying up for affordable housing, health care, efficient and cost effective transportation, environment, and education too?

  • Even back in ’06, hundreds of new workers would arrive at the gates of the Foxconn factory every day. On pay-day, each post-office on the campus would be thronging with people sending money home to their folks. If they weren’t being paid a “living wage”, why would so many people come to the factory? If they weren’t making a living wage, why would so many be sending money home?
    Don’t get me wrong, I’m not an apologist for Foxconn, but a lot of the reportage coming out of late assumes terrible treatment and goes from there. Actually the Foxconn plant is, compared to many of the factories surrounding it, a much safer and nicer place to work, and invests far more in raising the skills of its workers.
    In a company with a work-force the size of a small country, it is inevitable that examples of over-work and workplace abuse will be found – the real issue is whether Foxconn takes sufficient steps to prevent this, or whether higher-level management either ignores or condones such behaviour. As yet, no evidence of this has come out.
    Particularly when I see people in Europe or the US complaining of the 15-hour days that Foxconn workers put in (as voluntary over-time), I have to wonder whether these people have experience of working in factories in their own countries. I have, and I can tell you that Foxconn, the factory floor of which I used to walk through every working day, seemed little worse than the average factory estate in the UK.

  • Paul

    “What is a ‘Living Wage’?
    Ask Newt Gingrich….
    I would add that a Living Wage should also include an income sufficient to pay off student loans hoisted upon defrauded law school students by the Education Industrial Complex and the law school scam.
    From Wiki:
    In public policy, a living wage is the minimum hourly income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation. In addition to this definition, living wage activists further define “living wage” as the wage equivalent to the poverty line for a family of four.
    The living wage differs from the minimum wage in that the latter is set by law and can fail to meet the requirements of a living wage – or is so low that borrowing or application for top-up benefits is necessary. It differs somewhat from basic needs in that the basic needs model usually measures a minimum level of consumption, without regard for the source of the income. A related concept is that of a family wage – one sufficient to not only live on oneself, but also to raise a family, though these notions may be conflated.
    The ILO uses various criteria to recommend minimum wage levels: the needs of workers and their families, the general level of wages in a county, the cost of living, social security benefits, the relative living standards of social groups and economic factors such as economic development and employment maintenance. The living wage focuses more on the needs of worker units, social security benefits and cost of living.
    Poverty threshold is the income necessary for a household to be able to consume a low cost, nutritious diet and purchase non-food necessities in a given country. Poverty lines and living wages are measured differently. Poverty lines are measured by household units and living wage is based off of individual workers.

  • In all honesty, as you so rightly pointed out, the living wages do change from city to city.
    China can keep the wages down to a degree, as their are always ten people behind each person waiting for their job. Most Chinese nationals know this and so value a secure job.
    The fact is, Apple like all the major companies using Chinese workers, do not own the factories in China, they simply give contracts to certain Chinese owned factories; thus removing them of a certain degree of responsibility.
    Most Chinese are at least happy with a job, much happier than they would be if Apple, due to pressure and raising payment (which is technically nothing to do with them anyway), relocated to India… which will be the new production center due to low outgoings within ten years.
    Nike has already started the process in India I believe, along with a few others.

  • Let’s bring some Foxconn employees to our Southern slaughter houses (or Florida tomato fields) and ask them if they’d like to do a straight job swap?
    Or, to where I was today, small farm rice paddies in Thailand and ask if they’d prefer an open-air job as a farm laborer, up to their knees in muddy water for 12 hours a day?
    As a guilty iPad/iPhone owner, I support the projection of my guilt to anyone, or any corporation, other than myself.