Foxconn worker subsidies: Is Apple on track to be the 1st Fair Trade tech company?
By Tom Foremski | May 31, 2010, 5:58am PDT
I’ve been writing a lot about the concept of “Fair Trade Electronics” in the wake of the suicides at Foxconn.
I’ve asked “Who Will Be The First “Fair Trade” Tech Company?…
because I’m pretty sure there will be one, sooner than later.
I came across this story earlier today. I’m unfamiliar with the source but the story is interesting and it could indicate that Apple is taking a leadership position, in ensuring that the workers that make its products, are treated better than at other places.
Apple might be showing their social responsibility for now. A tech site in China has reported, Apple will provide financial subsidies to Foxconn’s employees, the amount will roughly be 1 to 2% of the profits from Apple products.
Apple has conducted investigation on Foxconn, and they believe the main reason for the suicide jumps is related to the employees’ low wages. In order to solve the problem, Apple decides to offer a direct financial subsidies for the workers in Foxconn, it will first start from the iPad production line.
It was reported that Apple paid Foxconn about 2.3% of the total price of iPad, after the subsidies, it will expected to reach 3%, which is equivalent to the producing cost of the iPad aluminum shell-case.
[Zol.com.cn] zol.com.cn is a well-known China IT portal under CBS Interactive, you can see more info here.
Apple has the profit margins to give these worker subsidies, companies such as Dell and HP are on very tight profit margins and would find it tough to do the same. They can’t afford to pay their suppliers more money. But Apple could do it … and also benefit from excellent marketing. After all, Fair Trade is the new green.
A Fair Trade Macbook laptop would be the height of cool. After all, how could a Dell notebook compete? It would have to argue against Fair Trade working conditions. “Cheaper and less fair…” is not a good marketing slogan.
But that’s what the first Fair Trade Tech company can accuse all of its competitors. That’s marketing gold.
I think it is too early to say who will be the first Fair Trade Tech company, but if this story about worker subsidies is correct, Apple is moving in the right direction.