CNN: China factory gives 2nd round of raises following suicides

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

7 October 2010
Beijing, China (CNN) -- Foxconn -- a Chinese contractor that makes brand-name electronics for companies such as Apple -- is raising workers' pay for a second time following a spate of suicides this year at its factory in Shenzhen, according to state media.

The company, one of the world's top electronics manufacturers, also makes products for companies such as Dell, Hewlett Packard and Sony.

Of Foxconn's 800,000 employees in China's mainland, 420,000 are in Shenzhen. They work in shifts and live in the sprawling factory complex in southern China.

About 85 percent of workers at the Shenzhen factory are receiving their second pay raise this year, China Daily reported.

The company did not immediately confirm that the raises had kicked in. But Foxconn announced them about four months ago, saying they depended on an evaluation period, according to Geoffrey Crothall, a spokesman for the China Labour Bulletin, a nonprofit group that tries to protect workers' rights across China. The raises were to kick in on October 1.

"The last time I talked to workers, they weren't sure they would pass the evaluation. They didn't even know what was being evaluated," said Crothall, who is based in Hong Kong.

The only way to confirm the raises will be talking to Foxconn employees when they return to Shenzhen after this week's Golden Week holiday, Crothall said.

The company had earlier announced that the 66 percent increase would bring salaries to 2,000 yuan ($299 ) a month.

In June, Foxconn raised those workers' pay by 30 percent, from 900 yuan to 1,200 yuan.

Shenzhen's legal minimum wage is 1,100 yuan a month, according to China Daily.

Foxconn's Shenzhen factory has had at least 10 suicides in the past year, as well as several suicide attempts.

Critics have questioned the company's treatment of its workers, but Foxconn has defended its practices.

Mental health experts aren't able to explain the suicides. The problems could be due to the pressures that many migrant workers face in China. They tend to be young people from the countryside who have never been away from home, working long hours, and feeling alone and vulnerable.

As of last year, an estimated 150 million people have moved from farming to non-farming jobs. They join the "liudong renkou," or floating population of rural migrants. This in-migration has helped lift more than 300 million Chinese out of abject poverty. It has also brought prosperity in the cities, where a robust middle class and a legion of millionaires have emerged.

Chinese with mental problems may feel they have nowhere to turn for help, however. According to the Beijing Suicide Research and Prevention Center, China had 173 million adults suffering from mental illness in 2005, with about 91 percent of them -- about 158 million -- never receiving professional help.

After the suicides at Foxconn, the company said it was taking measures to improve workers' lives, including organizing recreational activities, calling in Buddhist monks to offer spiritual consolation and setting up a 24-hour help line.

Foxconn is owned by the Taiwan-based Hon Hai Group.

Such contractors work on thin margins, and strive to keep costs down.
"A lot of production is moving to inland areas, and those workers aren't going to be paid anywhere near that," Crothall said of the Shenzhen pay raises announced by Foxconn.

Manufacturers are moving production inland to take advantage of lower wages, as well as economic incentives provided by local governments. It's not clear how many jobs will stay in Shenzhen, Crothall added.
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