Pegatron Allowed Bloomberg Access to a Factory

Shai Oster of Bloomberg was given a tour of one of Pegatron’s factories where iPhone models are assembled. In their latest supplier audit report, Apple says that they’ve been working hard to improve overtime compliance, and it seems that it’s working: they report a 97% compliance rate for 2015, up from 92% just three years earlier (PDF).

Worker pay is still a significant weakness for many tech company suppliers. While it has been improving, Oster illustrates how far it has left to go:

One improvement Pegatron executives were eager to share was increased income transparency. Employees can now check their hours, pay stubs, and monthly lodging and food expenses at touchscreen terminals throughout the campus. Including overtime, take-home pay averages 4,200 yuan to 5,500 yuan ($650-$850) a month. One employee, who helped workers access the automated information stations, showed her base salary was 2,020 yuan. An iPhone 6 in China costs 4,488 yuan.

For comparison, comparable factory workers in the United States, while not well-paid, earn an average of about $14 per hour.1 Assuming full-time occupation — and not the six-day workweek that contract factories consider “standard” — that works out to a wage of about $2,400 per month. The same iPhone 6 model costs just $549 in the U.S. or about 23% of a single month’s wages, compared to 81%–220% of a Pegatron employee’s monthly earnings.

Living conditions vary significantly around the world, and those for factory workers appear to have improved by leaps and bounds over what they once were, but there’s a ways to go yet.

  1. I took an average of three factory or assembly workers that would be in a comparable field. You can find them by searching the BLS’ tables for “Machine Feeders and Offbearers”, “Team Assemblers”, and “Electrical and Electronic Equipment Assemblers”. ↥︎