Apple CEO Tim Cook put his best PR hat on (a rather fetching plastic yellow cap in this case) when he visited Foxconn ZhengzhouTechnology Park, the Chinese factory that manufactures the iPad and iPhone. Both Apple and Foxconn have promised to crackdown on illegal overtime, improve working conditions and implement better safety measures.
Apple’s arm was twisted after the independent Fair Labor Association found numerous violations of labour law, such as unpaid overtime, when it surveyed 35,000 workers at three of Foxconn’s plants.
Foxconn is the biggest private-sector employer in China and together with Apple its decision to clampdown on these violations could affect other manufacturers. Should Foxconn raise its average wage - which would be a logical step - the likes of Amazon, for example, may take their business and see if they can get a better deal elsewhere.
Likewise, to compensate for these higher wages, the future cost of products will have to rise. However, before you get too alarmed, labour costs are only a small percentage of the final price of products. So you won’t have to be taking out that second mortgage just yet.
What do you think to Apple and Foxconn’s decision? We’d like to know.