This report is based on 2015 paystubs from Pegatron, collected by China Labor Watch (CLW) in the past 12 months, in addition to CLW’s investigation of the factory. Pegatron Shanghai is one of Apple’s largest supplier of the Iphone, currently employing around 60,000 workers and is currently manufacturing the IPhone 7. The investigation period is from 2015 until August 2016. Through careful examination of all paystubs and the observations of CLW’s investigator, we found several critical issues:

Findings

Through careful examination of all paystubs and the observations of CLW’s investigator, we found several critical issues:

1.      The average wage in China has been increasing steadily. However, at Pegatron, workers’ wages dropped significantly in the past 8 months. 

2.      The Shanghai Municipal Government raised the minimum wage from $304 USD to $330 USD in April 2016, and Pegatron workers indeed received a raise in wages. However, Pegatron managed to control labor costs by cutting welfare and sharing insurance payments with workers. As a result, workers’ total income decreased after the raise. Pegatron’s attitude toward workers is evident here. In 2015, workers’ hourly wage was $1.85 USD. In 2016, workers’ hourly wage increased to $2.00 USD, and after deductions, this amounts to only $1.60 USD.

3.      Excessive and illegal overtime work is still prevalent in Pegatron. Pegatron claimed that their ID check system could effectively control workers’ overtime hours, but this system did not have any effect in the departments where more overtime was needed. It is merely a tool for public relations.Of the 2015 paystubs. 62% had over 82 hours of overtime work per month. One worker put in 109 hours of overtime work per month, working 293 hour in tatal.

5.      The base wage is still too low in Pegatron, and workers have to rely on overtime pay to support themselves and their families. Workers who do not work overtime only earn around $213 USD after expenses are deducted.            

6.      In most of the production lines, workers have to arrive at work 10 minutes earlier than the regular schedule, but the 10 minutes are not paid.

7.      Workers spend about 60 minutes each day, passing through the security procedures and ID Checks before entering workshop. The ID Check system did not control excessive overtime, however, encroached on workers’ rest time.

8.      The factory forces workers to work overtime, and those who ask for leave would usually not be approved.

9.      Workers are exposed to potential occupational injuries without proper protection. For example, in departments that have noise and the use of lasers, the factory does not provide them with protection equipment.

According to Apple’s official report on their earnings in 2015, total revenue amounted to $233.7 billion USD. Net profit was a total of $53.4 billion USD, 22.85% of total revenue. In Greater China, Apple received $58.17 billion USD in revenue, which is 25.12% of total revenue in 2015. From this, Apple earned $13.4 billion USD in profits, however, the total base wages of the 1.6 million workers amounted to less than $6.2 billion USD. This is less than half of the profits Apple earns in China. 

Any improvements require a certain amount of economic cost, and Apple has the ability to improve labor rights. Executive Director of China Labor Watch, Li Qiang states: “Currently, Apple is hindering the improvement of labor conditions within the whole smartphone industry.  Apple alone claimed more than 90% of the smartphone industry’s aggregate profits, while a majority of other firms were operating at a loss. If Apple does not take on responsibility commensurate with its status, other companies will not have the ability to make improvements either.”

A Pegatron paystub after the adjustment:

(restroom) 

 

(restroom)