Foxconn Suicides and Chinese Labor Developments

This is actually pretty tragic/ interesting and has worldwide ramifications. Apple followers know that most of our products are made by Foxconn Technology Group, a China-based manufacturing company and one of the world's largest employers with a workforce that exceeds 400,000[sic]. That's incomprehensibly large.

What's interesting and concerning about this company/workforce is that for a few years now they've come under much scrutiny for a seemingly dangerously high rate of unhappiness and suicide. Last year a Foxconn employee made news by committing suicide after he supposedly lost one of Apple's prototype iPhones. Since then 16 more Foxconn employees have committed suicide, at times even literally jumping off the roof of the factory building that employs them, houses them, and is supposed to entertain them. The company's CEO claims that company swimming pools (the place is run like a Company Town) and other attractions are evidence of a healthy work environment, but suicide rates and this recent undercover report indicate otherwise.

And yet part of this alarmingly high suicide total is simply a product of the fact that 400K people work there. Steve Jobs recently pointed out that while he's distressed by the situation, the Foxconn suicide rate is actually lower than the general Chinese rate. Nevertheless Apple is "all over this" and rumors indicate that the company may start directly paying Foxconn employees to produce Apple products.

The publicity in recent weeks has had dramatic ramifications. Foxconn last week announced a 20% pay increase to all employees effective immediately. In three months that wage may increase to 67% above the original. This is great news for an overworked, overabused, underpaid Chinese labor force. But it also may have ramifications in the Western world in terms of products' costs. And not just electronics products, as car manufacturer employees are taking note of the Foxconn news and striking as well (NYT story here).

This is certainly an interesting economic development and indicates a maturing/modernizing Chinese labor force... Maybe the econ nerds out there can shed some light on that side of things...