State senators from both parties and Governor Rick Snyder have been trying to lure a Chinese manufacturer to Michigan with major tax breaks, however, there has been little discussion about the company’s major issues with labor laws and treatment of workers in its home country.
Later today, the state House will likely revisit legislation already passed by the Senate that would provide tax incentives to major companies so long as they meet certain job creation goals.
Since the introduction of the legislation, it has increasingly been reported that the company at the center of this incentive is Apple supplier Foxconn, who is not without a history of labor issues in its native China. In 2010, it was a central focus of an investigation when numerous workers committed suicide, and in 2012, the Fair Labor Association (FLA) launched an investigation – a condition of Apple’s status as an affiliated Participating Company of the FLA – into the tech company’s supply chain, including Foxconn.
The investigation found “significant issues” with working conditions at three factories in China operated by Foxconn. Specifically, within the last 12 months of the investigation, all three factories exceeded both the FLA Code standard of 60 hours per week (regular plus overtime) and the Chinese legal limits of 40 hours a week plus 36 hours max overtime per month. During peak production periods, the FLA found the average number of hours worked per week exceeded 60 hours per worker, and there were periods in which some employees worked more than seven days in a row without the required 24 hours off.
FLA also discovered that 14 percent of workers might not have received fair compensation for unscheduled overtime. Further, FLA’s worker survey found 64 percent of employees saying compensation doesn’t meet their basic needs.
The 2012 investigation had also found “serious issues” in areas such as health and safety, and the union at Foxconn is “dominated by management representatives and does not provide true worker representation.”
Six months later, FLA found “progress” at Foxconn, with more than 280 action items completed on time and or ahead of schedule and 76 more due through July 2013.
And by the end of 2013, the FLA found 356 of 360 action items had been completed on or ahead of schedule but that “working hours remain a challenge.” Although assessors verified workers at all three of the facilities (Longhua, Chengdu and Guanlan) were working no more than 60 hours a week between March and October, on average, more than half of the workforce at all facilities had worked beyond the Chinese legal limit of 36 overtime hours per month.
Some may say that what happened in China could never happen in Michigan because of more stringent labor protections, it still begs an ethical question of giving public funds to a foreign corporations with serious problems in its past.
“It seems from the reports they have done better, but there are still a lot of issues that remain at those Chinese facilities,” said Rep. Stephanie Chang (D-Detroit). “I guess our question should be, if we know a company is not doing what they need to be doing to uphold basic worker rights in another country, why would we want to reward them with our taxpayer dollars here in Michigan?”
Although the investigation by the FLA concluded in 2013, another watchdog group, China Labor Watch (CLW) continued to follow working conditions in Apple’s supply chain. In 2016, it conducted undercover investigations and interviews in four of Apple’s largest suppliers, including Foxconn, and discovered “plenty of issues remain” in regard to labor rights violations. CLW also found “significant deterioration of living and working conditions” in its report released in May this year.
“Michigan is a state that prides itself on the history of the labor movement, so it seems ironic that we’re potentially giving money away to a company that has labor violations,” Chang said.
The CLW investigator at Foxconn concluded that most workers had worked more than triple the amount of overtime per month permitted by China’s labor laws.
“Moreover, many Foxconn employees do not work overtime by choice, but due (to) pressures of making a living and supporting a family,” the report indicated. “…If they passed on overtime even once during the busy season, the assembly line supervisor would threaten to deprive them of working any overtime the entire month.”
Foxconn’s “social insurance” policy – similar to the United States’ social security – was “the most basic social insurance,” CLW concluded, except for management.
“Although Apple and Foxconn promised to improve, the scale of improvement was only limited to enrollment training, child labor, illegal labor agencies, and resignation procedures,” CLW said in its report. “Most of the other problems remained, while new problems arose concerning hiring discrimination and audit fraud.”
The Wall Street Journal reported in August last year on the deaths of two more Foxconn employees. While one, a suicide, was debatable on whether it was due to working conditions, the other, WSJ reported, was struck by train on his way to work. He and others were climbing across a railway to get to work amid flooding, it was reported, and Foxconn docks bonuses for employees who don’t show up for work, even for bad weather.