Apple and Foxconn blinked. And those blinks are big in the shift away from worker abuse—even in low-wage nations—as a legitimate business model in the 21st century.
I’m talking about the way electronics giant Apple and its major supplier Foxconn recently gave into public demands for better treatment of the workers who assemble iPads and iPhones inChina.
Apple said it would invite an outside labor rights group to audit its suppliers, which could lead to problematic factories being publicly identified for the first time. Foxconn, meanwhile, said it would raise salaries for many workers in China 16 to 25 percent, to about $400 a month, before overtime. Foxconn also said it would reduce overtime hours at its factories.
These developments are remarkable. As our writer David Ferris notes in an upcoming Workforce article, “Seemingly overnight, Apple, one of the world’s most secretive computer companies, declared its intention to become one of the most transparent.” Foxconn, meanwhile, is the 800-pound gorilla of electronics manufacturing. It employs roughly 1.2 million Chinese workers, and assembles an estimated 40 percent of the world’s smartphones, computers and other electronic gadgets.
Raising wages by as much as 25 percent is the kind of change that can move the needle. Don’t be surprised if Apple and other electronics products start costing more as a result.
Could Foxconn’s move simply mean Apple and other companies will shift work to still-lower-wage nations? Maybe. But that could be difficult given the thick web of electronics industry suppliers inChina. What’s more, the same forces that pushed Apple and Foxconn to promise reforms are likely to make a low-road labor strategy difficult anywhere.
Those forces can be summed up as technology-fueled people power. People care more about good behavior from the companies in their lives. They are speaking up about their opinions and experiences. And they have the tools to be loud and effective in an era of Twitter, Facebook and YouTube. In the case of Apple and Foxconn, media reports about harsh, dangerous working conditions at factories making Apple products prompted online petitions with hundreds of thousands of signatures as well as coordinated, worldwide protests at Apple stores.
Here’s how the New York Times characterized the effect of an empowered public on Foxconn: “Foxconn has conceded that employees and consumers have gained a sway once possessed only by Chinese bureaucrats and executives at the global electronics firms that hire Foxconn to build their products.”
Foxconn and Apple aren’t alone. Other firms in the past decade that have seen less-than-savory labor and supply chain practices challenged online include video-game maker Electronic Arts, Target and McDonald’s—which recently declared a new policy for pork suppliers after a video about the use of “gestation crates” in the industry went viral on YouTube.
Increasingly, businesses will have to work closely with their supplier to make sure they are humane besides cost-effective. Even the world’s most powerful companies are rubbing their eyes and starting to see the light.
A version of this post originally appeared at Ed’s Work in Progress blog at Workforce.com.
If there was any doubt that technology-fueled-people power has come of age and is changing the world for good, a recent New York Times op-ed by Pulitzer Prize winning columnist Nick Kristof should dispel it!
He tells of a recent battle between a class of fourth grade students and Universal Studios. Kristof notes that this “would seem an unequal fight. So it proved to be: the studio buckled. And therein lies a story of how new Internet tools are allowing very ordinary people to defeat some of the most powerful corporate and political interests around — by threatening the titans with the online equivalent of a tarring and feathering.”
It turns out the fourth graders, who had just finished The Lorax by Dr. Seuss, were taken by the book’s emphasis on protecting the environment. Hearing that Universal Studios would soon be releasing the movie version, they visited the movie’s web site. To their great disappointment, the site ignored the book’s environmental themes.
And so they did what tech-savy people around the world are increasingly doing – they started a petition on Change.org. It went viral, gathering more than 57,000 signatures, and Universal Studios quickly responded by changing the movie’s web site in almost exactly the way the fourth graders requested.
Makes me smile!
If you need more reasons to smile – or more evidence that technology-fueled-people-power is changing the world for good – read Kristof’s op-ed. There are enough powerful examples in it that even the naysayers might have to reconsider.