Feb 24, 2012

Foxconn Technology, a Taiwan owned company with nearly 1 million workers in China, makes product for Apple, HP, Dell, Nokia and Motorola. According to Reuters, Foxconn just raised the pay to their workers from 16-25%. It sounds like a lot… until you look at what this means – they raised it to 1,800 yuan a month for a junior level worker – less than a total of $300.00 a month. While this might nudge a small price increase for the products Foxconn makes, I doubt this will cause Foxconn’s customers to move their production elsewhere. Foxconn’s manufacturing prowess gives them an advantage over other countries, and one of Dell’s executives was quoted as saying that “labor is a small value of their production costs.”

$300.00 a month works out to about $1.87 an hour – less than 1/10 the average U.S. manufacturing wage of around $20.00 an hour. Numbers like this still boggle my mind, and I’ve been working in China for 25+ years.