Spotlight on Labor Conditions in China's Factories

The most recent of 10 suicides to take place at the Foxconn facilities in Shenzhen, China, last week has sparked worldwide concern about the working conditions and compensation for laborers in Chinese factories.

AP reported that the most recent suicide, committed by a 19-year-old male, happened just hours after six busloads of journalists toured the company's Shenzhen campus.

Foxconn, the Chinese unit of the Taiwanese Hon Hai Precision Industry, is responsible for the production of products ranging from Apple's iPhone to various Dell and Sony products.

"The price of labor in China has indeed been twisted and much undervalued," said Chang Xiuze, a researcher at China's top economic planning agency, the National Development and Reform Commission, according to AFP.

The effect of the suicides have been felt outside of the Foxconn bubble, as workers at Chinese Honda production units went on strike last week. According to AFP, Honda has responded to these strikes by offering workers a 24%, or CNY 366 pay increase per month, which would make monthly salaries total CNY 1,910 or approximately US $280.

"Employees there are largely accepting our offer, while we will continue negotiations with those who are not satisfied with it by asking Chinese local authorities to play a mediator role," AFP reported Honda spokeswoman Akemi Ando as saying.

In a similar move, Foxconn has responded to their most recent suicide by offering workers an average 20% pay increase, according to AP.

"Our economy can no longer rely on squeezing labor benefits, because workers are unwilling to accept it anymore. I have to say the squeeze is very cruel now," said Chang Kai, a labor expert at Beijing's Renmin University, AP reported.

While these two situations could be seen as a victory for the workers in China, in a country where labor organizing is illegal and corporations have historically been able to dismiss pressure from the media, the question of whether working conditions will actually improve is still hanging in the air.

Xinhua reported that the top communist party leader in Guangdong province, Wang Rong, visited Foxconn's Shenzhen campus over the weekend and encouraged Foxconn to adopt a "better, more humane working environment" for its workers. But no promises have yet been made to improve the work conditions in factories.

"The Foxconn incident shows one big problem: people are not machines," Jin Bei, head of the industrial research institute of the Chinese Academy of Social Sciences, was quoted as saying by AP.

Sources:

William Foreman, "Foxconn shows off China plant after suicides," Associated Press, May 28 2010.
Joan Feng, "Honda offers pay-rise to Chinese plant strikers," AFP, June 1 2010.
Annie Huang, "Taiwan's Foxconn raising pay for workers," Associated Press, May 30 2010.
Elaine Kurtenbach, "China's shift away from cheap labor hard on all," May 31 2010.
"Shenzhen government: management problem to blame for Foxconn deaths," Xinhua News Agency, May 27 2010.