Expensive iPhones – Lowly Paid & Exploited WorkersJanuary 29, 2022
Apple is the wealthiest corporation of the world with huge amount of accumulated capital reserves. The market capitalisation of its share capital has exceeded 3 trillion dollars (225 lakh crore rupees). To put this into perspective, the annual gross domestic product (GDP) of only 4 countries is greater than this amount. Despite all claims of stellar economic recovery by Indian government, the Indian GDP this year is expected to be only 147 lakh crores approximately. Besides this humongous stock market capitalisation, Apple also has more than 200 billion dollars of fee cash reserves kept in countries where it pays zero or near zero taxes on it. It sells very expensive iPhone. The other products of the company – iPad, laptops, desktops are also very highly priced, and the company is presented in bourgeois media as the very epitome of excellence and innovation in design, production quality and marketing. Steve Jobs, its founder CEO, has also been projected as a great hero with high talent and a source of inspiration for the ambitious youth, for taking the company to such high success. All this is said to be the reason for the super profits of the company. In brief, Apple has received much acclaim as the emblem of the success and superiority of the capitalist economic system. However, let us look deeper into the reasons of this and many other such successes.
There appeared a small news item in the month of December 2021 that the iPhone manufacturing plant in Tamil Nadu had to be closed as the workers protested after 159 of them were hospitalised due to food poisoning caused by rotten food served to them in the dormitories for workers operated by the company. This factory is owned by Foxconn, contract manufacturer for iPhone and other Apple products. Apple doesn’t manufacture its own products instead outsourcing the manufacturing to Foxconn and some other small Taiwanese companies. Foxconn has mainly been manufacturing the iPhones, iPads and other Apple products in China and is the largest private manufacturing employer there. Modi government has been trying to bring such outsourced manufacturing to India luring them with large attractive incentives under its Make in India initiative. Domestic and Foreign capital is being assured of full freedom to exploit workers by suppressing all labour rights under already weak erstwhile labour laws, acquired with much sacrifice by labour movement, in addition to large cash incentives, cheap or almost free land grants, tax and fee concessions, etc. Foxconn has also started iPhone manufacturing in Sriperumbudur, Tamil Nadu taking benefit of this scheme. 16 thousand workers including 11 thousand women are employed in this factory situated in a SEZ developed by State Industries Promotion Corporation of Tamil Nadu (SIPCOT). Company has also built and operates 17 dormitories in Sriperumbudur for these workers to live in most of them being migrant labour.
Wistron Infotech, another Taiwanese company has also started iPhone manufacturing in Karnataka. This unit is situated in Narasapura Industrial Area of Kolar district where it has been given 43 hectares of land in return for the so-called promise of capital investment of 2,900 crore rupees and creation of 10,000 jobs. However, the experience of workers in both these factories making expensive luxury items of Apple has been very bitter because of the intensely exploitative working conditions. Thousands of Wistron workers had revolted at the end of the night shift on morning of 12th December 2020 after being paid twelve days late for the month of November and that also amounts quite lower than what was promised to them for regular work, though lured by additional incentives, they were working 12 hour long shifts and even on some holidays. They were also victim of practices like curtailing of lunch and other breaks, being compelled to work on weekly off and other holidays, forgery in attendance register to cut due wages and many more such problems. Since management refused to pay attention and resolve any of these grievances despite smaller protests earlier, workers anger boiled over and the machinery and furniture of the factory bore the brunt. We had reported on this spontaneous protest of Wistron workers one year back in January 2021 issue of The Truth.
If we go into the very business model of Foxconn in India as well as China, we find it to be entirely dependent on predominantly employing migrant labour. These migrant workers are housed in the dormitories owned by the company. Hence, the company has complete control on the lives of these migrant workers and regulates al their activities from waking up in the morning to getting ready, breakfast, work, lunch-dinner to lights out for sleeping in the night. And this model is not that of Foxconn alone but designed in agreement with Apple itself since the largest share of profits extracted from this mode goes into the coffers of Apple.
Apple itself has claimed that this agreement ensures a minimum living standard for the workers. This minimum living standard consists of not more than 8 workers in a sleeping hall of dormitory, each worker should be ensured minimum 3 square meters of personal living space, one toilet and washroom should be available for every 15 workers, potable water should not be at a distance of more than 200 feet from the hall, adequate hygiene to be ensured in the food preparation area, etc. Let us try to understand what these ‘minimum’ standards mean in reality by taking the example of 3 square metres of personal living space. It means a space of 2*1.5 metres which is barely sufficient to move about in between after a small bed or pallet and a locker for personal effects is put in place. However, the reality is even worse. It has been found that dormitories have these 3 square meter beds in two tiers and many a times 2 workers use one bed in shifts of night and day, both in India and China. On enquiry, Sriperumbudur dormitories were found to be housing 25-30 workers in each hall of the dormitory as against Apple declared ‘minimum standards’ of not more than 8, and the hygiene in both living and kitchen areas was very poor.
After the workers protested and the plant had to be closed, Apple and Foxconn have now claimed to have conducted audit of the living conditions in dormitories and they have assured that the living, toilet, washroom and kitchen conditions will be improved. MK Stalin, Chief Minister of Tamil Nadu, permitted the company to reopen the factory in phases from 12th January based on these assurances but there is no news yet of any punishment to the ones responsible for putting lives of workers in danger by serving them rotten food.
Foxconn is the largest private manufacturing employer in China and there have also been recurring news of similar intense exploitation of workers in its plants there – long working hours, forced pace of work, very brief lunch and toilet breaks, poor food and living conditions, complete control on workers lives by the company, etc. In 2010s there were several suicides by workers leaping down from these dormitories. Apple and Foxconn, facing much criticism, then announced these minimum living standards. However, apparently these continue to be only for publicity and not reality.
This model of employing and housing migrant workers is highly exploitative and torturous and is therefore used by many ‘renowned’ companies selling their luxury expensive products to the filthy rich of the world for manufacturing on outsourcing contracts as this ensures high rate of surplus value with workers providing high productivity, i.e., made to work long hours on low wages. All the items like handbags, shoes, electronics assembly, clothing and other luxury items requiring high labour component are produced this way whether in China, India, Bangladesh, Taiwan, Vietnam, Philippines, African countries, etc. Thus, these workers brought from poorly developed rural areas in hinterland through labour sub-contractors are forced to work long hours with very brief breaks for lunch, toilet, etc in very filthy hygienic conditions resulting in severe health problems especially very painful reproductive system problems for women workers after only a short period of work. Many such reports have appeared about the ‘much applauded’ industrial areas of Karnataka and Tamil Nadu. In smaller units in Delhi and Mumbai not even separate dormitories exist and the workers ‘live’ at the work place itself. There have been several incidents of fires and building collapse where the workers were found to be locked inside the factory premises itself with no way to escape as owners and managers left for home after locking the promises in the evening. Many have lost lives in such incidents. Women also face sexual harassment in such conditions. All living and eating arrangements are in the control of the owners in lieu of arbitrarily fixed deductions from wages, ensuring further profit for cheap low-quality food. There have also been several reports that workers of textile manufacturing units of Bangalore, etc are taken out only for work in the factories during the day and rest of time they are kept locked in these dormitories and permitted to meet none outside. Thus, they are also prevented from organising and protesting this exploitation.
Another aspect of this arrangement is non-payment of wages regularly on due time. Instead of payment of wages with weekly or monthly periodicity, often the companies settle wages at the end of year or when the workers go home to visit their families. In India, many a times, wages for young women workers are settled with families by labour contractors resulting in further patriarchal exploitation of these young women. In these seasonal wage settlements, employers also resort to arbitrary deductions from wages. Sometimes instead of paying full wages, they keep some wage arrears, so that workers are under compulsion to return to them. This problem of wage settlement was always there in India in the organised sector but in the unionised organised sector workers unions had put a break on such exploitative practices. However, as a result of the ebb in the militant labour movement, the new ununionized industries with predominantly migrant labour are again resorting to such practices.
Evan in China, situation is quite worse since workers cannot form their own independent unions and have perforce to be members of the official union. The issue of arrears in payment of wages of migrant workers has become so acute that Xi Xinping had to himself speak about the issue in two of his important speeches on so called ‘common prosperity’. The government People’s Daily reported on 2nd December 2021 that,
‘China will take measures to clear arrears owed to small and medium-sized enterprises (SMEs), and ensure migrant workers’ wages are paid on time and in full, the State Council’s Executive Meeting chaired by Premier Li Keqiang decided on Wednesday.
“Wage arrears for migrant workers are closely related to this issue,” Li said. “There are nearly 290 million migrant workers in China. Job wages are the major source of income for rural residents in China. Governments at all levels and SOEs should lead by example to clear arrears, and SMEs must also pay migrant workers the remunerations they deserve as the laws and regulations require.”
The meeting highlighted that ensuring on-time and full wage payment is an important task that bears on the basic living needs of migrant workers’ families. At the turn of the year, various programs and projects enter the stage of fund settlement.
The special winter campaign will be carried out to intensify efforts in addressing wage arrears for migrant workers. The project construction sector will be a priority, especially projects funded by governments or undertaken by SOEs.
Implementation of relevant institutional arrangements such as special payment account and payment to migrant workers by general contractors on behalf of subcontractors will be reviewed across the board. Market regulation and audit-based oversight will be intensified.
Problems of wage arrears will be punished to the full extent of laws and regulations, and those with dereliction of duty will be named and held to account according to relevant regulations, to effectively safeguard the lawful rights and interests of migrant workers.’
We can, therefore, understand very well why the large corporates from all over the world especially developed capitalist countries outsource their manufacturing to China. And also, why Modi government is so much hellbent to suppress and encroach all erstwhile labour rights by implementing 4 new labour codes rushed through parliament without even the bourgeois democratic façade of any formal discussion during the Covid pandemic – they want to present India to the domestic and foreign capital on the platter as the most favourable place for profitable capital investment where such manufacturing can be done without the workers being allowed to unionise, protest and struggle for their bare minimum democratic and labour rights. This intense exploitation of labour is the reason why the manufacturing costs of expensive iPhones sold for 500-600 USD or more comes to only 10-20 USD or so generating huge profits for Apple and finance capital backing it. Similar is the level of profits for other luxury items being produced in Asian-African countries.
In brief, we can conclude that the source of such super profits and capital accumulation of the companies like Apple and others is this outsourced manufacturing model based on highly exploited migrant labour in countries like China, India, Bangladesh, Vietnam, and several others, and no such falsely exalted talent, excellence and innovation of the capitalists and their managers. This migrant labour working long hours with forced pace on low wages has in realty become semi-slaves of the capitalists who extract high surplus value from them which the sole source of all the super profits of all sections of the capitalist class mainly the financial capitalists.