Workers in iPad and iPhone Manufacturing Plants Will Have Shorter Work Hours and Bigger Paychecks
Users of iOS devices probably don’t have to pay more despite the OEM manufacturer’s pledge to raise wages and trim work hours for its hard-pressed assembly workers. Even if, their paychecks have been growing since a few weeks ago, labor costs remain a small percentage of the total bill for Apple’s devices.
Without doubt, the increase in labor costs would crimp the profit of Apple and its device manufacturers. Any business would always have continuous worry in declining profitability and they try to reduce costs in any way, including by choosing countries and OEM manufacturers that can offer lower labor costs. The increased pay is likely to raise prices in the market as the Foxconn Technology Group assembles about 40 percent of electronic products worldwide, including many hot-selling items; such as the iPhone and the iPad. Foxconn is the subsidiary of a Taiwanese company, Hon Hai Precision Industry Co.
The pledge for better working condition came after Apple hired labor auditors to review work conditions and practices in Chinese facilities run by Foxconn. The audit revealed that the manufacturer routinely violated overtime procedures by assigning workers on the assembly line for more than sixty hours each week.
Foxconn’s concession will have significant ripple effects not only because it serves Apple, the most valuable brand industry, but also because the company is closely partnered with major names such as Dell Inc., Hewlett-Packard Co. and Microsoft Corp.; their game consoles, computers, smartphones and other electronic devices have become the staples for many households around the world.