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Old 02-23-2012, 03:10 PM   #6
DANIMAL's Avatar
Join Date: Mar 2006
Location: Hamilton
Posts: 964
I believe people are not looking at pay objectively.

Lets look at the math;
Foxconn employees make $1.78/hr USD. (According to the reports)
1 Chinese yuan = $0.15 USD (taken with today's exchange rate)

So per hour Foxconn employees make
$1.78 USD = $11.21 Chinese yuan

Now lets look at this compared to the cost of living like company lunch and dorm rental fees.

$0.70US = $4.40 in Chinese Yuan
Worked out to a percentage against hourly pay we get the cost of lunch to be approximately 39.2%.

Assume that I am working a job in Ontario making minimum wage ($10.25/hr) and I go for lunch at subway and get the $5 special which after tax works out to $5.65. So my lunch cost me about 55% of my hourly wage. So Lunch as a percentage of what I make in Ontario costs just over 15% more than in China.

$15 US/Month = $94.47 Chinese yuan/month @ today's rate
which means that a Foxconn employee would have to work ~8.5 hours to pay for it. I don't even need to to the math to know that a minimum wage person in Ontario would have to work almost 50 hours to pay for some of the lowest cost rentals in the province(Windsor @ 490, Sudbury @ 515). Of course that is all taken without accounting for income taxes.

So you can see that while the pay is very low when put into North American currencies, it all relative to the cost of living. If the Chinese gov. allowed the Yuan to fully appreciate the pay discrepancy would almost completely disappear. This will be a real issue that China will face at some point. As you may imagine if the advantage of western currencies is removed from the Chinese labour market so too is the competitive advantage. This should lead to a lot of jobs being relocated back to developed countries as it would be the same, or less(due to less transportation of goods), cost to manufacture.

Conditions, I agree, seem unacceptable to western cultures but if looked at objectively are not that bad either. I am by no means saying I want to go work at Foxconn. Our cultures have different ideas of how much "personal space" an individual needs. If you have ever been pushed around at a Casio by Chinese tourists you have already experienced this delta. I don't pretend to assume these workers are happy to live/sleep with 14 other people. I am simply saying its relative; what we perceive as 'horrendous' may only be considered 'not great' by Chinese standards. There are many cultures that where sharing rooms/houses with multiple people/families is considered normal.

I think the real atrocities are more related to work hours/breaks/minimum working ages. It should be noted that conditions/ages/hours/pay were common problems shared with western countries during the industrial revolution. It was not until the rise of unions that everything promptly changed. Almost all the workers rights we have today exist because of that process.

I am not saying everything in the Chinese labour market is peachy, it is not, simply pointing out that it only seems extraordinarily bad because of currencies/cultural differences coupled with sensationalist propaganda to sell the stories.

Last edited by DANIMAL; 02-23-2012 at 03:16 PM.
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