Foxconn raising pay following rash of suicides

After 10 worker suicides since the start of 2010, iPhone manufacturer Foxconn is increasing salaries by 30 percent.

Following a rash of worker suicides this year at a massive factory in China, Foxconn is giving employees a 30 percent pay raise.

Taiwan-based Foxconn, which manufacturers laptops, mobile devices, and other hardware for the likes of Apple, Hewlett-Packard, Dell, and Sony, announced Wednesday that the pay raise will take effect immediately at all of its factories in China.

The increase is higher than the 20 percent pay raise the company initially proposed as a way to deal with the labor shortage in China. The basic salary at the company's China factories is around $130 a month, according to the Associated Press.

An anonymous Foxconn official quoted by the AP said the hope is that workers won't feel the need to put in as much overtime and will thus face a less stressful working environment. "It may also help cut the turnover rate and raise productivity and product quality level," he added.

Since the start of the year, 10 workers have taken their lives at Foxconn's factory in Shenzhen, China, a plant that employs hundreds of thousands of workers. Another three have attempted to kill themselves at the job site. According to AP, most of the suicides have involved jumping from buildings. Some reports say that the number of those who have attempted to end their lives could be even higher.

Foxconn's parent, Hon Hai Precision Industry, has been accused of pushing factory workers to put in long hours under stressful conditions and for low wages. The company has denied such allegations but has also forcefully resisted attempts by the press to cover the suicides more closely.

With more media attention and concerns about factory conditions, however, several of Foxconn's major customers have raised their voices. Apple, Dell, and Hewlett-Packard announced last week that they're investigating conditions at the plant and talking directly with senior management at Foxconn. Sony and Nokia also said they're investigating the situation.

Apple CEO Steve Jobs commented on the suicides during an interview at the D: All Things Digital conference on Tuesday night. Foxconn manufactures the iPhone, iPod, and MacBook. Jobs said that Apple checks out its suppliers to assess their working conditions and that Foxconn is not a sweatshop but a factory--and a pretty nice one with restaurants, movie theaters, and medical care.

The rate of suicide among the factory workers is less than the overall U.S. rate, Jobs asserted. But he said it's still troubling, needs to be understood, and must be monitored.

Besides the pay raise, Foxconn said it has installed safety nets around buildings to help stop jumpers, has hired more counselors, and has organized workers into 50-members teams so they can watch out for one other.

Foxconn Chairman Terry Gou even took the media on a tour of his Shenzhen plant last week to tout its safe, happy employees. But just after the tour, the 10th official suicide took place.

 

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