The missing chunk of Apple
Pegatron’s competitive advantage
Apple is preparing to release a cheap iPhone. Just how does a prosperous company like Appleproduce a discounted version of its phones?
At this moment, in Shanghai, China, workers in Apple’s supplier factory Pegatron are
monotonouslyworking long overtime hours to turn out a scaled-back, less expensive version of the iPhone. Sixdays a week, the workers making these phones have to work almost 11-hour shifts, 20 minutes of which is unpaid, and the remainder of which is paid at a rate of $1.50 an hour ($268 per month)before overtime. This is less than half the average local monthly income of $764 and far below thebasic living wage necessary to live in Shanghai, one of costliest cities in China. So these workers relyon long overtime hours. If a worker does not finish three months at Pegatron, the dispatch companythat got the worker hired will deduct a large portion of his wages.
After a grueling day’s work,
what a worker has to look forward to is a 12-person dorm room, liningup for a quick cold shower in one of the two dozen showers shared by hundreds of workers.At Pegatron, over 10,000 underage and student workers (interns), from 16 to 20 years of age, work in crowded production rooms, doing the same work as formal, adult workers. But some studentsare paid lower wages because schools deduct fees for the internship, while other students will not have their wages paid to them on time.At Pegatron, a pregnant woman interviewed was working equally long overtime hours, despiteChinese laws protecting the health of pregnant women by mandating an eight-hour workday. Afterfour months of intense work, she decided to leave and give up her maternity benefits rather thanjeopardize the health and well-being of herself and her unborn child.In addition, Pegatron has violations related to discriminatory hiring, harassment and abuse, firesafety, and more.So what is the competitive advantage that Pegatron has
utilized to win Apple’s order
of the cheapiPhone? Extensive labor violations and suppressed wages that cheat workers of a living wage, ahealthy working environment, and a voice. As Apple launches its cheaper iPhones, it continues toprofit while cheapening the value of the workers in its supply chain.
The labor violations of Apple
s supplier: Pegatron Group
Pegatron Shanghai is a subsidiary of the Pegatron Group. In 2013, Apple has increased its order toPegatron factories, and as will be explained below, these factories all utilize the labor violation
From March to July 2013, China Labor Watch (CLW) sent investigators into three Pegatron Groupfactories to carry out undercover investigations and conduct nearly 200 interviews with workersoutside the factories. The factories included Pegatron Shanghai (producing the iPhone), Riteng (a