Tragedies of Globalization: The Truth Behind Electronics Sweatshops

Table of Contents

• Preface
• I. Introduction
• II. Ten Factory Reports
• Conclusion
• Notes
• Responses

Preface

On May 20, 2011 an explosion in the Foxconn Chengdu factory resulted in three deaths and sixteen injuries. During the past ten years of investigations conducted by China Labor Watch, similar tragedies have been periodically recorded in many of China’s factories. While hazardous working conditions are a concern across all of China’s labor-intensive industries, in fact, the problems facing China’s labor force are more numerous and systemic.

From October 2010 to June 2011, through an investigation of ten global brand supplier electronics factories, China Labor Watch discovered multiple violations of China’s Labor Law, which was recently instituted in 2008, and brand companies’ Corporate Social Responsibility Codes of Conduct, who contract production out to the Chinese factories. The majority of these violations fall under five general categories: overtime, wages, labor intensity, contracts, and discrimination. For example, among the ten investigated factories, nine of them required excessive overtime, a direct violation of China’s labor laws. In addition, several factories did not sign labor contracts with workers, or signed contracts that were then withheld from employees who sought to claim due wages and benefits, and did not offer proper safety training. Other violations included: forcing workers to work overtime; arbitrarily fining workers; discriminating against workers on the basis of their gender, age, and status as Hepatitis B carriers; adopting methods of production that required high levels of labor intensity; and, finally, using militant management strategies.

The multinational companies that contract production to these Chinese factories claim that the factories bear the sole responsibility for these abuses. However, in this report, CLW posits that many of these abuses are firmly entrenched in the global supply chain system. Because most production costs, including distribution and physical materials are to a great extent inelastic, the only way factories are able to offer a competitive advantage is to lower the manufacturing costs, which often translates directly into lowering labor costs. This burden is eventually passed down to workers, who are forced to work long hours at a high intensity. When these external pressures become too great, and workers suffer from accidents or tragedies such as suicides occur, blame is often directed at factories, while international companies at most publish a press release, and vow to implement reform.

CLW believes that such scapegoating is unacceptable and irresponsible behavior. In order to ensure that supplier factories will not seek to compete for the lowest order prices using labor costs as the elastic factor, brand companies must work directly with suppliers to invest in concrete and sustainable working condition improvements. Holistically improving working conditions is the responsibility of both multinational brand companies and their suppliers. With a multitude of interests and stakeholder, it is only through the collaborative of multinational corporations, Chinese suppliers, NGOs, governments, and regulatory agencies, rethinking how the global supply chain operates and is enforced, will working conditions improve.

The ten electronics factories that China Labor Watch investigated over the last year are all located in Guangdongand Jiangsu provinces. In total, 408 workers were interviewed after the formal investigation started in October 2010. Before October, we also interviewed 185 workers. At every factory, over thirty workers were interviewed. Not including the Longhua Foxconn factory, the other nine factories employed a total of 200,000 workers. The factory with the most workers was Shanghai Quanta, with over 47,000 employees. The factory with the least number of workers was Hongkai Electronics, with 1,000 employees. The principle methods of investigation for this report were to enter factories to collect information and to conduct off-site interviews. In order to conduct investigations inside of three factories, CLW staff posed as workers who had gained employment within each factory. After the interviews conducted in October 2010, our staff remained in communication with workers and revisited those factories in April and May 2011 to conduct follow-up interviews.

Investigations were conducted of factories that manufacture products for Dell, Salcomp, IBM, Ericsson, Philips, Microsoft, Apple, HP, Nokia, and others. Among the factories investigated, eight are suppliers for Dell[1] and seven are suppliers for HP. Consequently, this report accurately reflects the labor conditions for Dell and HP Chinese supplier factories. All of the workers interviewed reflected on existing widespread problems throughout all ten factories. As these ten factories are suppliers of the electronics industry’s brand leaders, it is clear that their problems further reflect widespread, systemic issues in the electronics industry as a whole.

I. Introduction

1.Executive Summary

Throughout the course of this inquiry, the following five problems discovered in all of the investigations:

Overtime

All of the factories’ overtime hours were between 36 and 160 hours per month. No factory was found to be in strict compliance with China’s labor law, which states that overtime should not exceed 36 hours each month. For example, at Hongkai Electronics, monthly overtime is routinely in excess of 140 hours per month.

Wages

The minimum wage in nine factories does not meet the living costs of its workers. Workers cannot earn a living wage from normal working hours alone, and must work excessive overtime hours in order to earn enough money to survive. In Hongkai Electronics for example, workers’ minimum monthly wage was $138 USD in October 2010. There was a $6 USD deduction for dormitory accommodations, a $40.50 USD deduction for food, a utilities fee deduction, and a $15.30 USD deduction for social insurance, which left $76.20 USD. If workers have other expenses or financial responsibilities, such as vocational education classes or financial support of their parents (one of the main reasons migrant workers seek work in cities), it would be impossible to meet their living costs with only $76.20 USD.[2]In this situation, workers find themselves with no other option but to work excessive overtime.

Furthermore, many factories require workers to complete a fixed term of employment before the become eligible for a salary increase. Some factories required workers to complete at least a three month probation period and an additional three month evaluation before becoming eligible for a salary increase. Some factories require a year or longer before workers are eligible for an annual bonus. The difficulty, lengthy terms, and sometimes unpredictability involved in gaining a salary increase further reinforces workers’ dependence on overtime in order to earn a living wage.

Labor Intensity

In all ten factories, the labor intensity is extremely high. For example, workers in an HP production line must complete an action every three seconds, standing for ten consecutive hours each day. In many of these factories, there is only a ten minute break in the middle of the day, during which workers can drink water and use the restroom. However, there are many people and few toilets, so some workers have no opportunity to use the bathroom during this time. On some production lines, managers demand that workers continue to work through their breaks. It is clear that this high level of labor intensity will adversely affect many workers’ physical and mental health, leading to serious, long-term consequences for their well being.

Labor Contracts

All of the factories investigated do not sign labor contracts in good faith with workers. Most of the time, workers are not properly informed about the specific details of the contract before signing, often in violation of Article 26 of China’s Labor Contract Law, which states that: “in the event that the agreed terms of the contract are violated, changed, or subjected to fraud, coercion, or otherwise exploited on the behalf of one party, the contract shall be rendered wholly or partially invalid.” When there is a labor dispute, workers are unable to utilize the labor contract as a means of safeguarding their legal rights and interests. If a worker is injured while at the factory, they are unable to claim compensation as guaranteed to them in their contract, because they will be unaware of this legal right. At Tyco Electronics and Catcher Technology for example, although the factories directly employ some workers, they sign labor contracts with a separate labor dispatch agency. As a result of this inconsistency, the factories may arbitrarily fire workers, providing workers with almost no job security. Similarly, the Kunshan Compal factory violates labor laws by refusing to give a copy of the labor contract to the majority of its employees.

Discrimination

All of the investigated factories revealed instances of recruitment discrimination due to age, gender, and/or Hepatitis B. For example, five factories were found to have covered up instances of age discrimination, while Tyco Electronics only seeks to hire female workers. Similarly, at Hongkai Electronics it was learned that they only hire workers between the ages of 18 and 40. During CLW’s 2010 investigation, female candidates at MSI were required to undergo pregnancy tests. It is possible that this was a form of discrimination against pregnant women. After our report[3] was released in February 2011, this specific requirement was abolished. Investigators also discovered that in Shanghai Quanta, one third of workers were under 18 years of age.

2. Methodology

This investigation was conducted over 8 months, from October 2010 to June 2011. The ten electronics factories investigated are all located in Guangdong and Jiangsu provinces. In total, 408 workers were interviewed after the formal investigation started in October 2010. Before October, CLW also interviewed 185 workers. At every factory, over thirty workers were interviewed. Not including the Longhua Foxconn factory, the other nine factories employed a total of 200,000 workers. The factory with the most workers was Shanghai Quanta, with over 47,000 employees. The factory with the least number of workers was Hongkai Electronics, with 1,000 employees. The principle methods of investigation for this report were to enter factories to collect information and to conduct off-site interviews. In order to conduct investigations inside of three factories, CLW staff posed as workers who had gained employment within each factory. After the interviews conducted in October 2010, our staff remained in communication with workers and revisited those factories in April and May 2011 to conduct follow-up interviews. The number of workers we interviewed in different factory and the number of workers in both gender are listed as below (these are only the number we investigated after October):

Factory Name	Investigated Population	Male Worker	Female Worker
Tyco	32	17	15
MSI	35	10	25
Hong Kai	40	20	20
Catcher	45	25	20
Compal	45	30	15
Quanta	50	30	20
United Win	33	13	20
Flextronics	40	22	18
Foxconn Longhua	50	35	15
Foxconn Kunshan	38	18	20

Researchers in China Labor Watch then created a grading evaluation system in order to easily compare the differences in their current labor situations. Our standards for evaluation are the following:

1- Worst within the industry
2- Worse than some factories in the industry
3- Similar to other factories in the industry
4- Better than some industry factories
5- Best within the industry

	Tyco Electronics	MSI	Hongkai Electronics	Catcher Technology	Kunshan Compal	Shanghai Quanta	United Win	Flextronics (Zhuhai)	Foxconn Kunshan	Foxconn Longhua
Forced Labor[4]	3	3	2	3	2	3	4	3	3	4
Child Labor	3	3	3	3	3	3	3	3	3	3
Wages	4	3	2	3	3	4	5	4	4	5
Working Hours	4	3	2	3	3	3	3	4	3	4
Work Intensity	2	3	3	3	3	3	3	3	3	3
Rewards and Penalty Measures	4	3	3	3	3	3	3	3	3	4
Food and Dormitory	3	2	2	2	2	2	2	3	3	4
Appeal Channels	1	2	2	3	2	2	2	4	3	4
Workers’ Organization	3	3	2	3	3	3	3	3	3	3
Total	27	25	22	26	24	26	28	30	29	34

3. Recommendations

A strong multilateral effort is required in order to institute sustainable and far reaching changes in the electronics industry. Specifically, China Labor Watch believes the following measures should be adopted:

1. Base on the existing regulations, the United Nations and International Labor Organization must create new international labor standards for the electronics sector that they actively encourage member states to recognize and implement in their own countries. Minimum wage salary and maximum overtime hour regulations should be included in these standards.

The standards ought to first be implemented in developed countries, requiring them to ensure that all their imports originate from factories where workers earn living salaries and work reasonable hours. All UN member countries should have to eventually adhere to these standards, but the speed at which these standards are initiated will inevitably differ from country to country. Thus, we envision a gradual process, with reforms instituted over the course of 5 to 10 years in three distinct phases.

In the first phase, multinational companies will voluntarily implement and adhere to these labor standards. In the second phase, member states will begin to implement these standards in their own countries and align their own labor regulations to international standards. The third and final phase will require all those member states that have not yet recognized and implemented these international labor standards to do so (through the pressure of customary law).

The involvement of the United Nations and International Labor Organization is essential to this process. Without their participation and oversight, developing countries will overtly violate these international standards in order to solve their unemployment problems and stay competitive within the world manufacturing market.

2. While free trade agreements have been widely established throughout the world, workers' freedom to collectively bargain has simultaneously been severely restricted. This type of economic development model has given rise to many problems in China's own economic development. Last year, for example, 15 Foxconn workers jumped to their deaths because of poor working conditions and currently a numerous Chinese workers are on strike. The Chinese government has a responsibility to provide workers with the ability and power to collectively bargain ad advocate for their own rights.

3. Consumers should be encouraged to purchase ethically manufactured products. The United Nations and member countries should invest in education designed to inform people of the importance of participating in ethical consumption. Documentaries and short public service announcements highlighting the importance of ethical manufacturing should be produced and disseminated to audiences in both the developed and developing worlds. Making the public aware of how their purchasing choices affect the lives of workers can bring a larger group of people into debates about labor and manufacturing and will increase pressure on multinational corporations and their suppliers to conform to acceptable standards.

The Chinese electronics industry, in particular, should implement the following reforms in order to improve labor rights:

1. Establish worker hotlines inside electronics factories. These hotlines can help factories and workers communicate more clearly with each other, so worker criticisms and appeals for change can be directly heard by factory management. In addition to factory-run hotlines, there is also a need for hotlines and other channels established by outside actors (NGOs or consultant companies). These third-party systems should eliminate any pressure or hesitation workers may feel when using hotlines operated by their factories。

2. Publish a list of supplier factories and put down the supplier factories' name on products, in order to establish increased public oversight and scrutiny. By making the link between multinational corporations to their suppliers transparent and traceable, neither side can skirt responsibility for overseeing the protection of workers.

3. Because the current Corporate Social Responsibility (CSR) auditing strategies used by multinational corporations to monitor their supplier factories are mired in corruption, participation by Non Governmental Organizations in the development of Corporate Social Responsibility auditing models is essential. Allowing NGOs to freely inspect factories will help improve CSR auditing methods, provide important factory oversight, and improve the overall working conditions on the factory floor.

4. Provide managers, especially lower level managers, with vital communication and human resource management education. It is essential for management to have these skills in order to have a functional and fair factory environment.

5. Set round-table discussions with workers and brands. Factories which manufacture products for several brands should involve all these companies in discussions aimed at resolving labor disputed and other worker grievances.

II. Ten Factory Reports

1. Electronics Factory Considered a “Sweatshop”

The electronics industry came under intense scrutiny in 2010 and at the beginning of 2011. Following fourteen confirmed deaths of young workers at the Foxconn Shenzhen factory throughout 2010, media outlets focused on Chinese working conditions in electronics factories. Spurred to react under such intense media pressure, buyer brand companies and Foxconn began to increase wages and institute improvements in order to prevent further worker deaths. However, in many ways, these improvements were superficial (such as the installation of anti-suicide nets and a required “Letter of Commitment to Treasure Life”), and many latent, systemic problems remained.

While electronics factories are seemingly sterile, clean environments, devoid of the usual ‘sweatshop’ characteristics, many factories in the electronics industry actually exhibit hidden sweatshop attributes. These attributes are the results of brand buyer companies squeezing out dollars in order to secure the lowest cost production orders possible. Some of the more notable sweatshop characteristics in Chinese electronics factories include:

• Excessive overtime hours, especially during the peak season
• Forcing workers to work ‘voluntary’ overtime
• Maintaining an extremely high level of work intensity, by setting the daily production quotas at amounts only the most capable workers can withstand
• Implementing subtle discrimination practices by hiring only the youngest and healthiest candidates.
• Punishing workers for small mistakes and verbally harassing workers.
• Creating a system in which official resignation is nearly impossible and forcing workers to ‘voluntarily’ resign, thereby forfeiting a significant amount of their final wages.

These abuses are firmly entrenched in the global supply chain system. One particularly salient feature of the globalized electronics industry is the gradual solidification of profit stratification. At the peak of this profit-earning pyramid are the high-technology companies, such as Microsoft and Apple, who receive the largest pieces of the profit pie. From there, there is a trickle-down of profit in the supply chain. Large multinational companies occupy the same space as Microsoft and Apple, followed by contractors, also known as supplier companies that manufacture products, such as Foxconn, and finally Chinese workers, who receive the smallest piece of the profit pie.

Since May 2010, Foxconn has come under public scrutiny after worker suicides exposed the harsh labor practices and vile working conditions within Foxconn factories. After completing a comparative analysis of ten electronics factories, China Labor Watch discovered that the level of work intensity and number of working hours at Longhua Foxconn was no worse than other factories in the electronics industry. According to the grading system used by China Labor Watch to rate factory performance, Foxconn rated four points higher than the second best performing factory, Flextronics. CLW has therefore concluded that the failings of Foxconn exist in the majority of electronics factories, and are representative of the policies and behavioral norms found throughout the electronics industry. Furthermore, CLW believes that the inhuman working conditions found in these electronic factories are the direct result of the production orders’ price “race-to-the-bottom” and product delivery timetables dictated by global brand companies.

Another notable feature of the globalized electronics industry is its application of the global supply chain paradigm, where product manufacturing is outsourced abroad in many factories. Currently, up to 75% [5]of all electronic products are produced in a contract manufacturing system, outsourced by brandname Original Equipment Manufacturer (OEM), such as HP, Dell and Apple. According to iSupply, the retail price of a new iPhone is $600 USD (in 2010). The manufacturing components cost $187.51 USD, which is paid to the processor, flash memory, and other component production companies like Samsung. The assembly cost is only $6.45 USD[6]. Deducting the amount of pure profit from the operational costs borne by the factories, it is clear that workers earn less than $6.45 USD per day. Since most of the materials used in production are specified by Apple and their associated costs are pre-negotiated by Apple and other suppliers, Foxconn can only purchase the production materials at a fixed price and cannot cut costs by purchasing cheaper materials. Therefore it can only profit from the price difference between its assembly revenue and the cost of workers salaries, thus introducing great incentives for factory management to pay workers as little as possible. As a result, the profit pressure passes down through the supply chain and falls onto the backs of workers.

Because of this, Foxconn should not bear the only responsibility for worker suicides: Apple, HP, Dell and other international OEMs should also be held responsible, as their goal of profit maximization and comes at the cost of workers’ wages and sub-optimal working conditions.

Within the entire production process, purchasing and delivery are the most stable, while assembly is the most elastic. Multinational companies seek to shorten the assembly time in order to manufacture products more quickly, and factories seek to receive a greater share of multinational companies’ orders, thus increasing their profit. In order to receive more OEMs’ orders, factories must be able to offer quick and powerful manufacturing capabilities to help companies shorten the time it takes a product to enter the market. This profit pressure almost always shifts onto the worker, increasing the work intensity and overtime hours they are required to perform.

In addition to the low investment risk because of the outsourcing model, multinational company buyers also thrive in this system because there is no single regulatory body, governmental or otherwise, that oversees all levels of production, sales, and costumer service. As a result, this global supply chain paradigm allows the multinational buyers to circumvent often stricter domestic labor laws by utilizing cheap labor from developing countries to maximize their profits.

Global brands distribute orders to a number of different supplier factoriesand force the supplier factories to compete for the orders. However, when tragic accidents or other situations arise in the supplier factories that garner media attention and subsequent external pressure from the media, stakeholders, or labor rights organizations, multinationals use these supplier factories as an easy scapegoat, declaring that they do not respect labor laws or their production process guidelines. Consequently, companies will withdraw their production orders from these factories and terminate their partnership with them. This is done in order to superficially demonstrate that the company is aligned with the rights and interests of the workers. In actuality, the multinational is taking the easy, and irresponsible way out by evading responsibility for the working conditions in these supplier factories. The OEM is also able to largely avoid any significant public backlash against their products or any significant costs associated with reforming and improving a supplier factories’ working conditions. Through ten years of investigations of electronics factories, we have discovered that Dell and Sony are the worst companies in fulfilling cooperate social responsibilities.

Before placing an order, multinational companies examine the supplier factory’s price, quality, efficiency and level of social responsibility. Price is often the most pivotal factor. Through pressure from the media and other organizations, global brand companies often fund NGOs to supervise their supplier factories in order to make sure they are not violating workers’ rights. However, this supervision only affords workers a minimum improvement in their working conditions and treatment. These policies do not successfully create any fundamental changes.

When Foxconn came under intense international scrutiny, its competitors, Flextronics, BYD, ASUS, Quanta and other supplier factories, benefited.If under public scrutiny and criticism, Foxconn improves the labor conditions inside its factories, but brand companies are unwilling to increase their order prices, these labor reforms will not be sustainable. In this situation, buyer brand companies will inconspicuously place their orders with other factories that are not under such intense public scrutiny. As a result, the conditions in Foxconn would likely worsen in order for it to save money on labor costs and remain competitive within the industry. Our investigations also show that once Shenzhen Foxconn came under close the public eye—which resulted in wage increases and other improvements—it scored much higher in our factory grading evaluations and became a top performer.

Foxconn is the largest electronics industry manufacturer in the world and Apple is one of the most valuable technology companies in the world. Because of this, they should bear the greatest responsibility to reform working conditions in the electronics industry. In the wake of these changes by Foxconn and Apple, other brand companies and supplier factories should follow suit and not simply evade the great social responsibilities they have because they are not under the same public pressure and scrutiny.

In short, the problems evident in the electronics industry have been found to be systemic to the industry as a whole. Multinational companies that solely promote the ideals of Corporate Social Responsibility (CSR) are not doing enough to address these problems and find sustainable solutions. Different media outlets and NGOs must publicly monitor the activities of multinational companies and their supplier factories. Most importantly, the entire industry must launch a collectively concerted effort to improve working conditions. The Chinese government should also support this transformation and implement complementary reform policies.

China Labor Watch’s Executive Director Li Qiang states, “Under the pressure of NGOs and consumers, multinational companies began to stress the concept, and their alleged adherence to, Corporate Social Responsibility (CSR). However, the profit maximization model of the global supply chain within the electronics industry directly conflicts with the fundamental principles of CSR. A true socially responsible company must fulfill its legal and ethical obligations to all shareholders and stakeholders, including employees. It must truly safeguard labor rights and improve the treatment of labor. Many of these companies state that they are implementing far-reaching reforms, but we have yet to see any clear evidence of this.”

Conclusion

The current labor condition in Chinese electronic manufacturing factories is far from the clean and sterile environment it appears to be. In truth, these factories are the same kind of sweatshops previously found in 19^th century industrial England.

Electronic industry's global supply chain is main cause of this phenomenon. By contracting manufacturing out to developing countries, where the costs are significantly less, multinational brand companies can earn significantly higher profits. In addition to the amount saved by contracting manufacturing duties to developing countries, multinational companies also benefit from the lack of effective regulation and oversight in these countries. In order to promote economic development, developing countries are more willing to allow for exploitative labor practices if it can attract significant foreign investment. Although workers are the ones actually manufacturing the products, a majority of the profits are channeled to multinational companies.

Similar to other manufacturing industries, workers in the electronics manufacturing industry earn very little money. Because their monthly salaries are often too low to afford them the ability to meet their basic living costs, they are forced to work numerous overtime hours in order to make up the difference. In some cases, factories force workers to perform overtime hours. Their regular working hours are between 10 to 14 hours per day. Due to the fact that electronic products are continually updating and outdating themselves, the turnaround rate for manufacturing is very small. In most cases, manufacturers will receive large orders that they are required to fill within a short time span, putting additional stress on factory workers. During the peak manufacturing season, workers work excessive amounts of overtime, often working themselves to exhaustion. On the other hand, during the off manufacturing season, workers hardly earn anything because of the lack of work.

China Labor Watch's investigation reveals significant systemic issues regarding recruitment, wages and benefits, working hours, work intensity, safety and sanitation, leave benefits, food and dormitory conditions, reward and punishment systems, and grievance mechanisms in China’s electronic manufacturing industry. These violations demonstrate a direct disregard for workers’ legitimate rights and interests.The following table details these violations within each of the nine categories previously listed:

Issues	Situation
Recruitment and Resignation	At Tyco Electronics, gender and age discrimination during recruitment has been reported. The factory and general workers sign a contract with an outside labor dispatch agency, which is not a standard labor contract. According to the labor contract, general workers are not officially Tyco workers. At MSI, there is gender discrimination, age discrimination, Hepatitis B discrimination, and potential pregnancy discrimination. Health examinations are also restricted to one designated hospital. At Hongkai Electronics, there is age and Hepatitis B discrimination. There are also required health examinations, which workers must pay for themselves.Workers are reimbursed for buying their work uniforms only after completion of one half year of work. Any urgent resignation results in nine days’ deduction of wages. At Catcher Technologies, it is very difficult for workers to resign and they are only allowed to voluntarily resign. Only after an interview will workers receive a certificate of resignation and their final wages. Kunshan Compal does not directly recruit general worker. Employees are hired by intermediate agencies. Health examinations are paid for by workers. Applications for resignation need to be submitted half a month in advance. Shanghai Quanta was found to practice age discrimination. General workers must often use outside agencies and pay between $15 and $30 USD in agency fees in order to enter the factory. These agencies often exaggerate Shanghai Quanta’s wages and benefits. Half a month notification is needed before resignation. Zhuhai Flextronics misleads candidates about certain working stipulations and has been found to discriminate against those with Hepatitis B. Although these ten factories comply with labor laws stipulating the proper process for resignation, the poor quality of lower management personnel means that many managers seek revenge on workers who hope to resign. Due upper management’s unfamiliarity with the resignation processes and procedures, workers almost always encounter irregularities when resigning.
Wages and Benefits	The minimum wage at Tyco is $204.82 USD per month. The normal overtime wageis calculated as$1.77 USD per hour. Weekend overtimeis calculated as $2.35 USD per hour and statutory holiday overtimeis calculated as $3.53 USD per hour. MSI minimum wage is $203.28 USD per month. Normal overtime is calculated as $1.17 USD per hour. Off day overtime is calculated as $1.75 USD per hour. The minimum monthly wage at Hongkai is $169.4 USD per month. The minimum wage at Catcher Technology is $175.56 USD per month. The minimum wage at Kunshan Compal is $175.56 USD per month. Overtime wages are calculated in accordance with labor laws, so that average monthly salaries are around $308-$385 USD. Shanghai Quanta minimum wage is $227.92 USD per month. Overtime wages are calculated in accordance with labor laws. Zhuhai Flextronics minimum wage is $202.51 USD per month. Overtime wages are calculated according to labor laws regulations. Every three months, workers receive a quarterly award of $45 USD a housing subsidy of $7.50 USD, and a living subsidy of $22.50 USD.
Working Hours	On the surface, all ten factories appear to have implemented an eight hour per day, five days per week work system. In reality however, these numbers are drastically higher when overtime hours are included. Currently, Hongkai workers work two hours a day of overtime during the off season. During the peak season, from September to January, monthly overtime is in excess of 120 hours. At Catcher Technology workers must submit a written request to not work overtime and wait until they gain approval from their line leader; otherwise failure to work overtime is considered an absence from work. Workers sometimes work seven days a week without a single day off in a month. At Zhuhai Flextronics, workers must find a substitute worker before leaving their post during working hours to use the restroom or to get a drink of water. Breaks must not exceed 10 minutes. A number of production lines require that workers arrive early to begin work or to stay longer, after official hours have ended. Workers may also be required to attend morning or evening meetings while workers who have made mistakes are often required to writeself-critical evaluationsafterwards. All of this supplementary time spent in meetings or self-criticism sessions is not considered paid working hours. Some production lines demand that workers must continue to work even during the ten minute break.
Work Intensity	The level of work intensity is extremely high in all ten factories. In each factory, the production quota is determined by the maximum output the most efficient workers are able to withstand. For example, on the HP production line, workers must complete an actionevery three seconds and repeat this for ten consecutive hours.
Health and Safety	Electronics factories have implemented satisfactory safety management systems, so severe occupational accidentsare rare. However, because of the extremely high level of work intensity, it is impossible for workers to stay intensely focused on their repetitive tasks for ten consecutive hours. Therefore smaller accidents, such as cuts, are very common. More significantly, investigations revealed that for the majority of job posts in electronics factories, there is a high risk of contraction of occupational illnessesand diseases.
Leave	On some of the production lines it is very difficult for workers to receive sick leave approvalor annual leave due to the poor quality of lower management personnel.
Food and Dormitory Conditions	Some factories provide free meals at work, allowing workers to eat until they are full. However the quality and nutritional valueof the food is usually sub-standard.
Reward and Punishment Measures	The factories investigated were found to have complete and functioning management systems. Yet because the quality and training of lower-level management is not high, their treatment of employees is often harsh and insensitive. For example, Shanghai Quanta workers expressed that lower management has absolutely no regard for their well being and treat them as subhuman.
Grievance Mechanisms	The ten factories all lack properly functioning, useful trade unions. None of these unions are able to represent workers’ interests or collectively bargain. Although they all have worker care centers, they were only found to provide workers with psychological consolationand were unable to help workers resolve any concrete real-life problems. At Zhuhai Flextronics, only one manager was aware that there was a monthly union meeting for workers, to which each department sends one person to participate. However, in these meetings, workers’ problems are not addressed or discussed, indicating that the meetings are more of a formality than an actual outlet for workers to air their grievances. At the Shanghai Quanta factory, workers were unsure if a union existed and had not heard that workers were represented in union meetings. The factory has a worker hotline called 70885. When pronounced in Chinese, 70885 sounds like “please help me.” However, the majority of interviewed workers did not know about it.

The changes in electronic industry cannot be made merely through the efforts of factories. It's even more essential that the multinational companies increase their ordering price, government perfect relevant legislation, enforce regulations and establish effective grievance mechanism for workers. International society's public scrutiny and costumer's responsibility should also be encourage. As costumers, every one of us can do a bit: supervising the immoral brands and decline to consume the immoral products.

Notes

[1] Please see the more detailed examination of factories’ current situations in the pdf report, appendix 2 (p 127).

[2] This is the most conservative estimate, workers’ actual expenses are actually much more, such as communication and living costs, at the end they save very little.

[3] Dell, hp, and nec supplier factory case study: MSI Computer (Shenzhen) Co., Ltd.

[4] According to the United Nations and the International Labor Organization, forced labor refers to any service or work that is exacted from someone which is not completely voluntary in nature, but rather is done under some form of penalty or loss of rights and privileges. Because the definition of forced labor is not unified, we use forced labor to describe the following situations: forcing workers to work overtime; deducting wages for those who do not work overtime; penalizing workers who do not work overtime; firing workers who do not work overtime; depriving workers who do not work overtime eligibility to later work overtime as a penalty.

[5] Li Yuanxiang, Walkthrough of cooperate social responsibility in electronic industry www.csrglobal.cn/sri-monthly_detail.jsp?yuekan=20100521&fid=304771, SRI Monthly 21 (2010), (translated into english by China Labor Watch)

[6] David Barboza, Supply chain for iphone highlights costs in china, New york time, july 5, 2010

Responses

Salcomp Plc's Response

HP's Response

Philips' Response

MSI's Response