SPOTLIGHT: Apple’s Labor Problem is Bigger Than Previously Thought

Apple (NASDAQ:AAPL) has new questions to answer after a New York-based labor rights group accused the company’s suppliers in China of being repeat violators. Apple and its manufacturers, including Foxconn Technology Group, have been on the radar of labor rights activists for long over accusations of excessive overtime and poor working conditions.

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“From our investigations we found that the labor rights violations at Foxconn also exist in virtually all other Apple supplier factories, and in many cases, are actually significantly more dire than at Foxconn,” China Labor Watch said in a report published on Thursday.

The group said it conducted an investigation lasting four months through April that showed employees had to work for up to 180 hours of overtime a month during peak periods, exceeding the legal limit of 36 hours per month. Factories often left out medical insurance, which is a legal requirement for workers who are exposed to hazardous conditions.

The group interviewed 620 workers at 10 factories run by Apple suppliers, including Riteng, a unit of Taiwan’s Pegatron Corporation, Toyo Precision Appliance, BYD Electronic, Quanta Computer, Wintek Corporation, and Jabil Circuit (NYSE:JBL).

Riteng was singled out for the worst conditions, with investigators reporting 12-hour workdays. Half of Riteng’s workers described safety conditions as “bad,” even more than Foxconn’s 2 percent. Also, the average hourly wage at Riteng was found to be 8.2 yuan ($1.29), below the average rate of 10.2 yuan at Foxconn.

Earlier this year, Apple had allowed the Fair Labor Association to conduct a probe of Foxconn’s factories in China after several cases of worker deaths and suicides. That move backfired for the iPhone maker, with the FLA finding major violations and unsafe conditions prevalent in the factories. Since then, both Apple and Foxconn have very publicly raised wages and cut down hours. Apple said it had been making regular checks at its supply chain partners and publishing reports on workers’ situation on its website.

Labor groups say wages have risen, though the growth has been slower than inflation. “Wages are certainly going up, but they are still a very long way from what you consider a decent wage because inflation in the major cities in southern China is going up all the time,” Geoffrey Crothall of China Labor Bulletin told Reuters. “It’s generally better at the larger factories, but the problem with Foxconn and a lot of the other Taiwanese, Hong Kong-owned manufacturers, the management culture there is still very authoritarian, quite dictatorial. People say it’s quasi-military.”

Workers usually have little legal representation in China, where labor laws are often not enforced strictly.

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