Research Questions Apple’s Ethical Standards

NEW YORK – Apple stipulates that the workweek of workers in its supply chain not surpass 60 hours. But new research by China Labor Watch (CLW) demonstrates that a major Apple supplier factory, Pegatron Shanghai, broadly failed to comply with Apple’s workweek standard in September and October 2015. (Full 23-page PDF report)(Pay stubs raw data)

With the assistance of 18 Pegatron workers, CLW collected 1,261 pay stubs from Pegatron workers of many departments. An analysis of 1,122 valid pay stubs from September and October 2015 showed 94.5% of workers earn the Shanghai minimum wage of 2,020 RMB ($310). On average, workers’ overtime pay constitutes 42% of their gross wages. Earning only the minimum wage, a worker’s gross annual wages in 2015 is not even equal to half of the 2014 average disposable income of Shanghai residents ($7,250). Such low base wages encourage workers to take on lots of overtime. 84% of workers accumulated more than 80 hours of overtime in a month, far in excess of the China’s legal maximum (36 hours). Pegatron workers’ overtime even exceeds Apple’s 60-hour workweek commitment for workers in its supply chain. In September, 43.7% of workers had an average workweek over 60 hours. October was even more severe: 71.1% of workers worked more than 60 hours a week.

The primary findings of CLW’s report include:

   1) Workers are paid at a rate of 1.82 USD/hour.

   2) On average, overtime pay as a percentage of workers’ gross wages is 42.4%.

   3) Workers work more than 10 hours a day, 6 days a week. 83.8% workers’ monthly overtime hours exceed 80 hours.

   4) In October 2015, 71.1% of workers’ average weekly working hours exceeded Apple 60-hour maximum limit.

   5) Pegatron Shanghai workers must participate in an average of 15 minutes of mandatory pre- and post-shift meetings every day, or 90 minutes per week. If we assume that Pegatron Shanghai workers all have hidden, unpaid overtime, as CLW interviews suggest, then the total unpaid wages amount to US$11.85 million

   6) The total value of Tim Cook’s stock growth up to February 2016 is equal to the combined annual base wages of 78,847 Pegatron workers.

   7) The combined base wages of 1.6 million workers on Apple’s supply chain only accounts for 2.6% of Apple annual revenues.

The executive director of CLW Qiang says: “This research shows that for Chinese workers, the distribution of Apple’s profit is unethical. Apple Inc is just a tool of profit for Apple’s executives and shareholders.”

CLW sent letters to all major U.S. presidential candidates which explains the widespread labor abuse in Apple’s supply chain and expressed a hope for the candidates to clarify their global labor policies. But to date, CLW have not received any replies.

About China Labor Watch

Founded in 2000, China Labor Watch is an independent not-for-profit organization. For more than a decade, CLW has collaborated with labor organizations and the media to conduct in-depth assessments of factories in China that produce toys, bikes, shoes, furniture, clothing, and electronics for some of the world’s largest brand companies. CLW’s New York office creates reports from these investigations, educates the international community on supply chain labor issues, and pressures corporations to improve conditions for workers.

Contact China Labor Watch

(For English)
Kevin Slaten
Program Coordinator
Phone: +001 212-244-4049
147 W 35 St Ste 406
New York, NY 10001

(For Chinese)
Li Qiang
Executive Director
Phone: +001 212-244-4049

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