Apple's model labour practices

A "spate of suicides" at a Chinese supplier to Apple has raised all the wrong questions. Here's to the happy workers.

Ivo Vegter
By Ivo Vegter, Contributor
Johannesburg, 28 May 2010

Apple just celebrated a milestone in the company's history - eclipsing archrival Microsoft in terms of market capitalisation. However, news headlines are putting a damper on the party. Labour activists are making a noise about what they claim is the company's callous disregard for the working conditions at its Chinese suppliers.

Granted, the party deserves to be dampened a little. Just like Apple's celebration ignores some harsh realities, so does the story about the suicides at Foxconn, the supplier in question.

Apple's success, for example, is benchmarked against a Microsoft, whose share price has been in the doldrums for over a decade. In fact, it hit a 10-year low just last year. Still, Microsoft is 300 times more valuable than it was 24 years ago, having peaked near a 600 multiple. By contrast, your 1986 Apple shares would have earned you squat for nigh on two decades, and are only worth 70 times more now than they were then. That's an average annual return of 18% or so. Not bad, but nothing like Microsoft's 24% over the same period. And let's not breathe a word about the possibility that this is as high as Apple will fly, given the growing discontent among its customers. Its restrictive user policies and anti-competitive behaviour, frankly, puts veterans like Microsoft and IBM to shame.

Beating Microsoft might warm the cockles of Apple fans' hearts, but it really isn't the best benchmark if you understand the statistics.

Statistics are not the media's long suit, however. In the last few days, the headlines have been screaming about a spate of suicides at Apple's supplier, Foxconn. Trades union and labour activists have been calling for a boycott of Apple's next iPhone, to punish the company for doing business with a firm where the poor, abused workers apparently see no way out but to jump off the roof.

Pity the facts are all wrong. You see, while every death is one too many, the suicide rate at Foxconn is remarkable for only one thing: it is extraordinarily low.

Bumping yourself off is the civilised way to do it.

Ivo Vegter, ITWeb contributor

Not that you'd guess that from the newspapers that uncritically ran the wire stories from Reuters and the Associated Press (AP). Laced with phrases like "secretive corporate culture" and "the social cost of China's cheap labour manufacturing model", the stories lament the "spate" of 10 suicides so far this year at the company.

I hate to burden these brave reporters with arithmetic, but here are some facts: Foxconn has 420 000 employees. Ten suicides in five months gives you an annual rate of 24 suicides. Ergo, Foxconn's employee suicide rate is 5.7 per 100 000.

The suicide rate in China, according to World Health Organisation (WHO) figures, is 13.9 per 100 000. Assuming suicide rate to be a proxy for happiness, this means Foxconn employees are two-and-a-half times happier than their countrymen and women.

This does raise questions about Foxconn's labour practices, indeed. What is it about the company's management that makes employees so content? Why are so few depressed enough to consider suicide? Surely, Foxconn and its parent company, Taiwan's Hon Hai, deserve praise for such wonderful management of such a large labour force? They can teach the rest of the world some tricks.

It is true that China's suicide rate is fairly high. Of 100 countries for which the WHO has (rather stale) figures, China ranks only 73.

So let's compare Foxconn's suicide rate with those of enlightened Western democracies with wealthy populations, luxurious social welfare, scrupulously protected strikes and strictly enforced labour laws.

The USA? 10.9 per 100 000. Blame Michael Moore. Canada? 12.3. Blame the weather. The United Kingdom? 7.6. Warm beer. The Netherlands? 9.7. It's the weed, man. Australia? 13.2. Self-explanatory, really. Switzerland? 18.3. France? 17.8. Ireland? 11.4. New Zealand? 15.3. Belgium? 20.1.

I repeat: Foxconn's suicide rate is 5.7 per 100 000.

What the hell is wrong with these dumb Chinese, that they so na"ively cling to their worthless lives? Don't they know it looks bad in union press releases and the left-wing propaganda parroted by Reuters and the AP? Bumping yourself off is the civilised way to do it.

South Africa's suicide rate, according to a paper in the Social Psychiatry and Psychiatric Epidemiology journal, is 15.4. Among urban men, it is 25.3 per 100 000.

Don't you wish we could all work assembly-line jobs in China now?

Oh, one other thing. For some reason, Apple has been singled out by the media. It is my sincere pleasure to ask Dell, Nokia, HP, SonyEricsson, ATi, and all the other companies that subcontract work to Foxconn to step up and claim their accolades.

Well done. Your efforts to make the world's poor happier by putting paying work in their hands are much appreciated. Except in Reutersville.