Foxconn workers to get wage increases in July

Foxconn is the world’s largest (and Apple’s favorite) contract manufacturer. Despite criticism that it runs sweatshops, the truth is that Foxconn leads the charge in improving working conditions at its high-tech factories, at least compared to other large-scale production operations in China.

A new report citing company founder and CEO Terry Gou confirms that Foxconn has put forth a plan to increase salaries of its workers come this June. Conveniently, the news coincides with Apple CEO Tim Cook’s recent trip to China, as well as the rumored production of a sixth-generation iPhone

It also comes as Foxconn workers allegedly object that reduced hours and overtime following the Fair Labor Association probe will lead to lower wages which won’t be enough to cover basic needs.

Foxconn parent Hon Hai Precision Industry Co. argues the wage increases for the company’s 10,000 employees in Taiwan will help retain and attract talent.

According to a Friday report by Taipei Times, CEO terry Gou said in a television interview that the wage increases will go into effect in July after the current review is completed.

Hon Hai chairman Terry Gou said in a TV interview on Wednesday that his company is reviewing pay scales for its employees in Taiwan as the public is faced with a rising cost of living since the government removed a mechanism to partially freeze domestic fuel prices. The government is also likely to raise electricity prices after the latest increase in fuel prices, which became effective on Monday.

The policy change also signals Apple’s growing influence over Foxconn. A rumor has it that the iPhone maker is mulling a massive $9.76 billion investment in Foxconn, enough for a 20 percent stake.

I think Foxconn is doing the right thing here, even if it’s the result of a tremendous public backlash and the prominence of Apple, their prime client.

Tucheng, New Taipei, Taiwan-headquartered Foxconn employs an estimated million people, it is the world’s largest maker of electronic components, the largest exporter in Greater China and the key partner of California-based Apple.

When a company this large decides to do something about working conditions, other Taiwanese parts makers and manufacturing companies in China have no choice but to follow suit or risk losing employees who will increasingly want to jump ship to work for Foxconn.

Indeed, the report goes on to state that notebook maker Compal Electronics and flat panel makers AU Optronics and Chimei Innolux (both Apple’s suppliers“might also give their employees a pay raise later this year”.

Consequentially, working conditions should improve over time across the Asian supply and manufacturing chain.

That’s all that matters and what we’ve all hoped for in the first place.

Agreed? Are we getting closer to an ethical iPhone?