Foxconn Caves to Pressure, Ups Wages

Apple supplier works to improve conditions following consumer outcry
By Kevin Spak,  Newser Staff
Posted Feb 20, 2012 11:24 AM CST
Chinese universities' students, dressed as the Foxconn workers, hold mock iPads with a skeleton print outside an Apple Premium Reseller shop in Hong Kong, in this May 7, 2011 file photo.   (AP Photo/Kin Cheung, File)
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(Newser) – Foxconn will bump workers' salaries by as much as 25% while decreasing the amount of overtime demanded of them, the company announced this weekend, in a bid to stem the tide of outrage against it and high-profile customers such as Apple, Hewlett-Packard, and Dell. The move is a victory for activists, but could also signal a bump in the prices of a host of gadgets, analysts tell the New York Times.

"This is the way capitalism is supposed to work," one MIT economist says. "As nations develop, wages rise and life theoretically gets better for everyone. But in China, for that change to be permanent, consumers have to be willing to bear the consequences." The move isn't just a PR stunt, either; China is starting to face labor shortages, pushing wages upward. Foxconn is China's largest employer, with 1.2 million workers making roughly 40% of the world's smartphones, computers, and gadgets. (Read more Foxconn stories.)

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