(This letter is from a Pegatron worker. It does not necessarily represent the views of CLW.)
I am an average worker at Apple’s subcontractor Pegatron. Though most people have an understanding of what Apple’s iPhone is, they may not be clear as to the way that these phones are assembled, so I will give a general description of this process.
Currently, Apple’s cell phones are entirely produced through its subcontractors. That is, Apple provides technological support, equipment, and quality control, while the subcontractors provide the factory and workforce. It can be said that this style is the best way to grow a business’ profits to their maximum extent, the idea for this being thought up by several of America’s major companies.
However, for us workers this is a most cruel and heartless kind of exploitation. As these major technology companies have long drawn in big profits, they ought to take on a greater share of the social responsibility, creating a better life for their employees. Yet, those who have achieved success through this system of subcontracting have abandoned their responsibility. Apple is this kind of company.
In China, Apple has two well-known subcontractors making iPhones for them, the first is Foxconn, and the other is Pegatron. I believe that nearly everyone is familiar with Foxconn, the largest subcontractor in the world, and one that has in the last several years been called a “sweatshop” by numerous large media sources. Today I would like to talk about the other subcontractor, the “sweatshop” that most people are unfamiliar with, Pegatron.
This year, Apple has been looked at by investors as weak, its stock price has fallen sharply, and sales for Apple’s iPhone have declined for the first time in 13 years. These trends are evident in the production at Pegatron. Originally, we had 45 assembly lines producing Apple’s iPhone 6s, responsible for around 60% of the overall production of that model. However, there are now only 20 assembly lines remaining. Weak sales of the iPhone 6s have directly led to a reduction in orders at our company, as well as a reduction in profits.
At this time, there has been an increase in the standard minimum wage. In circumstances where Pegatron’s profits have fallen and labor costs have risen, Pegatron’s leaders have grown impatient, beginning to think about how to bring down the costs of labor. As the overall prospects for industry throughout China turn sour, it has put additional pressure on those looking for work, emboldening the leaders to act. Under the broader framework of the labor law, they have chosen to take to knife to worker’s compensation and benefits.
First, they got rid of food subsidies, then the lowest wages paid were reduced to the bare minimum of 2,190 RMB, and finally they forced workers to pay the individual portion of social insurance. As a result, after submitting payment for social insurance, base wages are lower than Shanghai’s standard minimum wage of 2,190 RMB. This time, in order to adhere to the labor law, they have used “special subsidies” as a means of increasing base wages to 2,190 RMB per person. In this case, they have ensured that they do not violate the labor law, only provide the bare minimum in wages, and even reduced all kinds of subsidies. It is truly a brilliant scheme. Currently, Pegatron’s wages are 2,190 RMB with overtime added, with a worker’s food and lodging expenses deducted from this total. The expenses for food and lodging are entirely the worker’s responsibility, as there is no subsidy provided. The cheapest food available for workers is 5 RMB, and expenses for food and lodging add up to over 1,000 RMB per month.
Pegatron, you are being far too stingy, the workforce you are wronging is still the largest in all of Shanghai. To operate in Shanghai but not include food and lodging, providing only the barest minimum for wages and overtime, with food and lodging expenses as yours, there truly is no other factory that treats its workers as poorly as you do. This is blatant exploitation. Apple is unwilling to do it itself, so it asked subcontractors like you to do to do its dirty work for it. Don’t worry, soon the word “subcontractor” will be synonymous with naked exploitation and will be pushed aside by businesses with a sense of responsibility. I hope that everyone can understand the true meaning of subcontracting, and boycott goods produced by factories like this.
Pegatron adjusted workers' wage in May 2016.
(Note:In 2016 Q2, Apple held 233 billion cash in hand, which was able to hire 1.5 million workers to work 41 years if all of them are paid according to Pegatron’s base wage ($3,803.3 USD).
 Apple Return of Capital and Cash Position, http://files.shareholder.com/downloads/AAPL/2074833069x0x840254/7137D28C-2E6E-4406-8435-ADAB52BB6F4C/Return_of_Capital_Timeline_Q216.pdf