Foxconn Promises 20% Wage Hike Following Suicides

May 28, 2010 By Ryan Fleming

After 10 suicides, and several more attempts by employees, Foxconn is planning on raising the wages of its 420,000 worker.

Hon Hai, the Taiwanese parent company of Foxconn, is promising a 20 percent raise to its 420,000 employees following a string of worker suicides that have brought increased scrutiny to the factory, from both the media and the American companies like HP, Dell and Apple, all of whom have products manufactured by Foxconn.

The wage hike will raise the pay from $131 to $157 a month, although it does not address the work conditions that many describe as “sweatshop-like”. HP, Nintendo, Apple and Dell all have products made by Foxconn, and all have vowed to investigate the factory conditions.

A spokesman for Hon Hai claims that the pay raise has nothing to do with the suicides, and that the wage increase had been scheduled for some time. It is unclear when the raise will take effect. Labor costs account for just 2 percent of Hon Hai’s operating costs.

“It may help the suicide situation, because we workers just need money and the financial pressure on us is great,” a Foxconn employee told MSNBC “Every little bit helps.”

The announcement of a raise follows the news that Foxconn employees were being required to sign a form that included a clause stating that the company would no longer pay anything more than the legal minimum for injuries sustained while not at work. Foxconn was rumored to be offering 100,000 yuan, or roughly $14,650 to compensate the families of those that committed suicide, something that may have encouraged some of the suicides.

So far this year, 10 employees of Foxconn have committed suicide. An 11th death was reported yesterday after a worker slit his wrists, but the man survived after receiving medical attention. At least two others have also attempted suicide but survived, and the number of unreported attempts may be higher.

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Hong Kong man at 12:32pm 29th May 2010 I can see completely how all these people are driven to commit suicide. Really I can! The worst part is not the low wages, nor the armed thugs dressed in security clothes that beat you up for no reason at all, but the verbal abuse! Yes, the verbal abuse, that is the worst! I think I detect a pattern here: I am a Chinese now living in Hong Kong. When I lived in Toronto, Canada many years ago, IBM was still making and selling PCs. The assembling of the PCs selling locally was contracted out to Acer, the big Taiwanese IT company in Mississauga, a suburb of Toronto. The hiring of factory workers are contracted out by Acer to a small local HR agency (therefore, owned and run by white men and not the problem in this story). On the factory floor, all the supervisors are all Taiwanese and they only hired (through the agency of course) desperate immigrants like me and others from China, India, Pakistan and elsewhere to work as workers. It was in Canada, so the security guards beating you up part does not apply in this story. Anyway, I started working there from July. When the back-to-school rush was coming to an end by mid-August, I noticed that is when the supervisors really crank up the verbal abuse, and they will yell at you for anything, or for no reason at all almost every time they walk by you. And this verbal abuse will die down by September after many people left. By around November they will hire many new comers for the Christmas rush. And by about early December when the Christmas rush is coming to an end, they will crank up the verbal abuse again…... In hindsight, I can see what they are doing in my case: I believe that they are strategically using verbal abuse as some kind of psychological weapon to make you leave the company on your own so that they can save on severance payments when they don’t need you, the redundant workers, after the high season is over. Sure you can complain to the HR agency but what can they do about it? Nothing. For those who do not leave on your own, the supervisors know who you are and know that you are desperate to make a living. It is not like you can form a union because Acer does not hire you, it is the small HR agency that did. I strongly believe the Taiwanese employ heavy verbal abuse as a tool to attempt to control the lower rank Chinese workers in today’s Taiwanese-run Foxconn, plus the low wages and the security guards beating you up part of the story, of course! Take my word for it, if you are subject to verbal abuse long enough like I did, you will feel and act like a slave. And at that point, suicide does not look too bad as an option. And by the way, enjoy using that iphone and ipad of yours, just don’t get too surprised when you find blood on your hand afterwards!
Joseph at 10:56pm 28th May 2010 Raising the wages of employees is a step in the right direction. This is definitely gonna give them a sigh of relief. Moreover a proper investigation should be conducted to find the root cause behind these suicide incidents.