Category Archives: CFML

Consumers For Fairness In Manufacturing And Labor – The hidden costs of how our gadgets are made and delivered.

by Ben Trube | September 26, 2012 · 5:09 AM

If you bought an iPhone 5, please consider returning it

I think we’ve all gone a little insane. Or at least five million of us.

Let’s start with 2000 and work our way up. By now you’ve probably heard about the 2000 worker riot at a Foxconn plant in Taiyuan. While the initial findings seemed to indicate that the riot started as a dispute between workers from different provinces, it seems more likely that the riot broke out as a result of workers having enough of distrust and beatings from the guards. 5000 police had to be sent in to stop the riot, and the 79000 person factory shut down as they picked up the broken glass and the 40 injured.

This plant may have made the iPhone, and if they didn’t, another one just like it did. Apple sold five million of those phones this weekend, and if these workers had been pushed just a bit harder, they might have sold another two million.

But make no mistake, we bought them, this $800 phone that may be as much as a year behind its competitors. Many of this five million will likely replace this new phone with the latest model next year.

I didn’t buy one, but that’s not terribly surprising. Apple hasn’t been selling to me for a while. I particularly like the Mac Book Pro, priced at $1399 for the basic 64GB model. The computer on which I am writing this blog post has 160GB (+32 GB in an expansion SD card slot), and cost $185 dollars. I could literally buy seven of them for the same money, one for each day of the week.

I’m solidly middle middle class. Maybe lower middle middle. I have gadgets certainly, but an $800 phone makes no sense. I was mad when my $800 HP laptop only lasted two years, and most people who buy the iPhone don’t even keep it that long.

This is insanity, this economy that requires a constant influx of new things while we throw out the old. And I think we know that. We also know the “hidden” costs of this constant influx of new things, environmental damage, distracted driving, and thousands of workers in China working criminally long hours, being searched to make sure they aren’t stealing the products they make, and being beaten by guards at the slimmest provocation.

We don’t need these things, and we know it. I’m a cube dweller. There is not a single function for my job that requires, or even would be helped by an iPhone (or any smartphone). There are thousands like me in my company and in every company. Even managers who might have more of a legitimate business use more often then not seem to use these devices for little else than being rude in meetings.

I’m not saying give up your gadgets. To pull out an old chestnut from my dear friend Brian “pot to kettle, damn your blackness.” I’m saying keep them and use them until they don’t work anymore. Make deliberate decisions about what you buy and decide if its really something that’s right for you and that you will use. Take your time before bringing this thing into your home. And consider the source, the people who made this magic device you are holding.

Apple’s not alone in the crazy department (though a patent on rounded rectangles is just silly and Michael Okuda should be counter-suing you any day now Apple), but lately they may be a little more insane than most. Even the little decisions, like cutting Google Maps from the phones and then not knowing where Mt. Rushmore is just seems sad. It’s sad that Apple prices itself out of the middle class, and doesn’t seem to share its wealth with the people making its products, be it through more humane working conditions or better pay.

We know what’s right, what’s sensible, what reasonable. So do it already!

1 Comment

Filed under CFML, Trube On Tech

Tagged as Foxconn, iPhone, News, Opinion, Technology

by Ben Trube | April 11, 2012 · 12:00 PM

Did We Win? Maybe.

According to last month’s report from the Fair Labor Association, one of the biggest problems at Foxconn is the amount of overtime worked by each employee. The average worker can put in as much as 80 hours of overtime a month, or a 60 hour work week. Chinese law states that overtime is limited to 36 hours a month, or 9 hours a week on average. FLA also found that many were not being compensated at the overtime rate of “time and a half” or 150% of hourly salary.

As a result Foxconn has pledged to increase salaries by 16 to 25% by Mid 2013, and to comply with Chinese law and reduce overtime to 9 hours a week. Some Foxconn employees think the reduction in overtime is too drastic, saying they’d be willing to work 60 hours of overtime a month, or 15 hours a week.

Given the numbers flying around I thought it would be helpful to provide some context. Like any good math student I’ve shown my work, and I’ll state my assumptions:

I’m defining X to be the average hourly salary of a Foxconn employee.
I’m assuming the 16-25% pay increase is to the base salary (i.e. the amount paid for 40 hours of work per week).
I have calculated figures for Foxconn previously complying with Chinese overtime (150%) as well as if they did not. It’s important to remember that if Foxconn did not compensate for overtime then that is money they legally owe their employees.
I’m showing the figures here for 9 hours overtime pay, I did calculations for 15 hours which you can see here.

If Foxconn did not pay overtime before, then the average worker should experience a 3.4% – 11.5% gain in earnings under a 9 hour overtime policy. However, they would experience a 4.5% – 11.3% loss in earnings if they had been paid what they were owed for the illegal overtime.

If overtime was previously compensated then the average hourly pay for a worker working 60 hours a week would be 1.17X (or 1.17 times base hourly salary). If they were not paid for overtime then their hourly rate would be 1X. Under the new system workers can earn anywhere from 1.27X to 1.36X for 9 hours compensated overtime.

If Foxconn had previously paid overtime, then the cost of their 1.2 million person workforce would be 84 million * X. Otherwise it would be 72 million * X. If Foxconn’s budget for workers remains unchanged they can hire as many as 135.6 thousand new workers if they had previously paid overtime. Otherwise they would need to lay off almost as many or increase their salary budget.

Bottom line is this:

If Foxconn had been paying what they owed employees, then employees will earn less than they could before. If, however, they were not compensated, then they will be bringing home more money.
Average hourly salaries have increased significantly under the new system, even with reduced overtime.
Foxconn will have to raise its budget for employee compensation if they had not previously been paying overtime. Otherwise they can afford to hire the “tens of thousands” of new employees without increasing the budget.
If Foxconn did not compensate workers for overtime, then I think punitive damages for unpaid overtime should also be leveled against them.

Bonus Friday Post (A Novel Approach, Prayer and Perspective)

I want to end this week with a couple of different thoughts I’ve been having on the Apple factory situation.

New CFML Challenge

As I said on Monday, I understand the impulse to want to tell a story, a narrative that can make people care about the conditions at the factories that make our electronics. I know there are some creative people that follow this blog and I thought it might be interesting to see what you can come up with.

Prompt: Create a story/poem/piece of artwork from the perspective of one of the actors in the Apple factory situation. It can be from the perspective of the workers, owners of the factory, Apple executives, engineers or consumers.

If anyone wants to do this please share it here.

Prayer and Perspective

We were discussing the blessing and woes section of Luke (6:20-26) in Life Group on Wednesday, and it helped to put into perspective some of the feelings I’ve been having about this whole situation. God’s really been working to challenge me on the ways my actions have an effect on others, even in indirect ways. The things that I buy, and the consumer culture I’m a part of, have an effect on the way people have to live and work. I’m really blessed, and some of it is at the cost of those who are poor.

It’s a complex situation, and one that can’t be looked at from an American perspective alone. For some of these workers, these factory conditions are better than what they were doing before, but that doesn’t make them right. Still, I think it is important to consider all sides to this story and I thought I’d share a blog post by Eugene Cho (thanks Dad for bringing this to my attention).

I particularly like the prayer at the end for the blessing of the hands of the workers who made this device I am about to enjoy. I pray that prayer before meals as well, and regardless of the way things change or stay the same, it is important to pray for those who are less fortunate than we are.

Have a good weekend!

Once More With Feeling

“Where do we go from here?”

What are working conditions really like in the factories that make our electronics, and should we feel guilty about it? The retraction of Mike Daisey’s story from January’s This American Life prompts this question. In the third half of the TAL Retraction show Charles Duhigg, co-author of the NY Times investigative series on conditions at Foxconn, tries to answer both of these questions, and I thought it would be a good idea to present the basic arguments here.

Duhigg classifies working conditions at these factories into two categories. The first is unpleasant or harsh working conditions: long hours, low pay, repetitive labor, etc. The second, smaller category are outright safety violations resulting in worker injury or death.

There have been some recent reports of safety violations that have resulted in two explosions at different factories. The second of these, months after the first, has been in the news lately, as it has recently come to light that Apple inspectors had just checked out the plant mere hours before the explosion. The root cause of both explosions was build up and ignition of aluminum dust, a problem which can be easily addressed with proper ventilation. These incidents, while isolated, are appalling especially given the amount of time between them to correct the fault.

But again, the amount of safety violations is relatively small. The real story is the amount of hours workers are required to work, and the conditions of that work. Duhigg states that worker overtime is one of the biggest problems, and one that can be looked at from two perspectives. The workers may be demanding this overtime in order to earn more money for their families back home, or the workers may be coerced into worker longer hours for fear of job loss or not being able to get overtime when desired.

Duhigg then outlines what some of the costs would be to manufacture the iPhone, and other products like it in America. Labor is not a significant part of the cost of an electronic device, and estimates vary widely as to how much more it would cost in America (from $10 to $65 a device). Some might consider this a lot, but when we’re talking about iPads, which already cost in the $499 – $649 range, we’re not significantly changing the market for those devices by passing that increased cost fully onto the consumer. If an iPad cost $50 more or less, I’m still not buying one.

Do we really need any of these things? My experience, and the experience of most people I talk to, is that we live just fine without an electronic gadget until we buy one. Then it becomes a “need” and we cannot find a way to de-integrate it from our lives. Checking e-mail everywhere we are is not a necessity, even in business. Some people (managers/CEOs/project leads) need real time communication, but those of us in the cubicle trenches, we can wait until we can check it on our desktops or laptops.

Duhigg’s final argument is I think the most interesting, and one I’ve touched on a little before. We used to have conditions like the ones in China during the industrial age of our country. And then we had a labor movement, we formed unions, and we fought for better working standards, better pay, saner hours, healthcare. We can manufacture these products under American standards, it just might cost us a little more to do it and force us to separate our needs form our wants. If we don’t, then we are exporting the harsh labor conditions we fought in this country to get rid of. In another century, who will the Chinese export their labor standards to?

Are working conditions something we only care about for ourselves? We’re a nation that seems to care about others. We try to spread democracy, give humanitarian aid, prevent genocide, and in general spread the American dream beyond our borders. Why then do we think differently about our gadgets?

Maybe that’s the kind of thinking differently Steve Jobs meant.