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Foxconn Pay Increase Probably Means Pricier iPhones, Playstations

That fourth-generation Apple iPhone could cost more than you expected. Foxconn, the Asia-based manufacturer of the iPhone and other Apple products, as well as Dell, Sony and HP equipment, has agreed to raise employees wages, but is passing those costs on to its customers. As a result, products such as the respective companies smartphones, laptops, gaming consoles and printers promise to carry a heftier price tag.

Foxconn decided recently to increase pay by 30 percent as of July 1, after almost a dozen workers committed suicides at the companys factory in China. At first, Foxconn denied its labor practices and low compensation were to blame for the deaths, as well as several attempted deaths. Now the company says it will boost wages but its also ending suicide payments. Foxconn has been shelling out the equivalent of 10 years pay to families of suicide victims, and industry analysts and others have speculated the recent spate of deaths has partly been due to that policy, not just poor working conditions.

Foxconn now is said to be in talks with customers about its higher pricing and hopes to reach deals this month. Those negotiations will impact pricing on next years electronics equiment.

Foxconns pay move further will mean thinner margins and possibly lower earnings. It also seems to have implications for other original equipment manufacturers whose workers could start demanding the kind of compensation their Foxconn peers soon will earn.

 


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