- The Apple logo is seen during an announcement at Apple headquarters in Cupertino, Calif.
CUPERTINO, Calif. – Apple
began last week by basking in record quarterly profits, but then ended
the week in a public relations retreat after reports of exploited
workers in factories in China assembling its hot-selling iPads and iPhones.
For now, the media spotlight is on Apple and
its Taiwanese contract supplier Foxconn. But China's leaders will also
be shifting uncomfortably as the gaze of the international media turns
to the harsh underbelly of its manufacturing economy.
Behind China's remarkable economic progress
toil an estimated 120 million migrant workers, typically living and
working in austere factory complexes.
Two decades into China's industrial
transformation, questions are being asked about how much responsibility
authorities shoulder for its hukou (household registration) system that effectively institutionalizes migrant workers as second-class citizens in their own country.
But for now, it is Apple in the firing line.
The New York Times ignited media interest after a story on unsafe
working conditions, as well as seven-hour days and cramped dormitories
at Apple's Foxconn supplier in China.
The public relations drubbing was ramped up another degree by Jon Stewart's Comedy Central, with a disturbing "Fear Factory" satire on the lot of the workers behind Apple's prodigious profits.
The problem for Apple is that beneath the
humor and the shock headlines, there is enough truth about worker
conditions in mainland Chinese factories to offend many of its customers
and ultimately damage its premium brand.
At the same time, apportioning blame and improving the current situation is much less simple.
Apple's Chief Executive Tim Cook
has expressed "outrage" at reports of unsafe working practices at
suppliers and has promised to step up audits. It should also be
remembered that Apple is just one of many international companies --
such as Nokia, Dell and Microsoft -- that use Foxconn as an assembly supplier.
Foxconn, which employs over a million
workers in China, has been in the headlines before after a spate of
worker suicides at its factories in 2010.
It later set up helplines and safety nets to
stop employees jumping, as well as raising salaries. Basic pay was
increased to 2,000 yuan (US$315) a month, up from 1,200 yuan (US$189).
The company
tends to attract attention because of its size, with over 300,000
working and living in its Shenzhen complex that is the size of small
town.
While home for workers is most likely still a
cramped, shared dormitory, in the past decade Shenzhen has transformed
with new skyscrapers, subways and streets packed with new cars.
The depressing prospect for migrant workers
is they are prevented from joining this new China. Thanks to the
decades-old hukou system, they cannot enjoy resident perks such as
housing, education and medical benefits available to locals.
This suits provincial authorities, who avoid
bearing the costs of providing these services or the infrastructure
that an influx a population the size of Foxconn's plant in Shenzhen
would require. Meanwhile, they still get the tax revenue from the
business located locally.
Such a system might have been justified when
China was starting out on its path of industrialization. But holding
back a permanent rump of citizens as factory cannon fodder is inevitably
going to lead to rising tensions.
Another unpalatable consequence of the hukou
system on such a scale is it makes it difficult for migrant families to
resettle. It is estimated 58 million children of migrant workers are
left behind with relatives or in care.
Apple and other multinational will argue
they are just following the rules laid out by the authorities in China
or whatever country.
Understandable perhaps, but how long will it be good enough, especially if this situation begins to offend Apple's socially responsible consumers?
Understandable perhaps, but how long will it be good enough, especially if this situation begins to offend Apple's socially responsible consumers?
After all, if consumers are willing to
demand eggs from chickens that were not factory farmed, it is not much
of a stretch that they might demand smartphones assembled by workers with some basic dignity.
