Wage Increases for Chinese Factory Workers Is Not Change

By Donald Sears  |  Posted 2010-05-30 Print this article Print

The recent media attention on the suicides of Chinese factory workers who manufacture and assemble products like Apple's iPhone, Sony and Dell computers and anything electronic has caused Hon Hai Group to up the pay rates of workers by some 20 percent.

But will wage increases be enough? Is this announcement late last week only intended to calm the negative publicity or will Hon Hai--who owns the Shenzen-based Foxconn facility in Southern China-- keep its other promises to ease worker stress and feelings of desperation?

It's hard not to be skeptical after Hon Hai's first reaction to the workers deaths after they sent a letter to all employees reminding them they would not pay for any deaths or accidents that were not on the job. Believing Hon Hai cares for the stress it puts its employees through is like believing China in general values the lives of its rural, migrant citizens.

Hon Hai has since said publicly that it used poor judgment and insensitive language in that letter. It doesn't change much of anything.

It is not uncommon, according to reports from Reuters, for Chinese companies to increase pay rates before the fall production schedules for the holiday product rush. Those pay rates come with higher productivity expectations. As one worker in China told Reuters this past week on the wage increases, ever little bit helps. So, yes it will help, but I think we are far from seeing conditions improve dramatically.

All you need to do is watch the gripping "Young & Restless in China" a Frontline documentary on PBS which showed a diverse cross section of Chinese citizens--from the entrepreneur to the factory worker and those in between--to see that China is a jigsaw puzzle that doesn't always fit together. It's past and its future are in constant conflict, and its government and value on human life are at odds with its desire to be a superpower.

You want to see a country with a healthcare and environmental crisis? Look no further than China.

Stories like this sad suicide situation in China stoke the outrage of the Western populace, but also cause a number of headaches for American companies reaping the profits from the global supply chain. Some consumers don't want to feel bad about the products they love, but many shrug and say "well, that's the way of the world."

Perhaps, as Tom Formeski of ZDNet suggested, American and European technology companies need to adopt "fair trade" principles like those used in South and Central America for coffee. There seems to be a market for our guilt.

It's easy to feel outrage. I feel it, but I also know there are a large majority of workers in these factories who are doing it as sacrifice for their families. They come from poor, rural parts of the country and they are expected to work for their family's benefit. If the family has enough money to allow one child to get an education, it's going to be the son. That is the way it is and will probably not change as rapidly as we'd expect.

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