Foxconn Union Heralds End of Cheap Era

The ability to vote is generally suspect in China. But Foxconn, the world’s biggest contract manufacturer of electronics, will allow its million-plus workers to vote for 18,000 representatives, reports Financial Times columnist David Pilling. The Fair Labor Association, based in the US, will monitor the process. “[The] intention may not be to give his workers the wage-bargaining power that often comes with a unionised labour force,” Pilling writes. “More likely, he hopes to improve the company’s image, tarnished by a spate of suicides at his factories in 2010 and by allegations of poor conditions and use of underage workers.” The company is run by Terry Gou of Taiwan. Demand for labor and changing demographics are increasing wages in China without unions. New social initiatives are being tried to reduce corruption and wage inequality. “If wage increases do indeed accelerate, companies will have to make big productivity gains if they are not to lose competitiveness,” suggests Pilling. Strikes are unlikely in China, but workplaces in Bangladesh, Vietnam and others could win more contracts. – YaleGlobal