Apple Supplier Raises Wages After Spate of Suicides

Hon Hai's Foxconn rescinds pledge asking workers not to kill themselves

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    NEWSLETTERS

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    Foxconn has a serious public relations problem on its hands after a spate of suicides, and it's not good news for Silicon Valley companies like Apple and Hewlett-Packard, either.

    After the tenth suicide and 14th suicide attempt this week, employees at electronics manufacturer Foxconn are getting a 20 percent raise.

    A spokesperson for Taipei, Taiwan-based Hon Hai, Foxconn's parent company, said the pay raise for workers in China was long planned, and coincides with the busy season ahead of the holidays.

    Companies that contract manufacturing to Foxconn include Hewlett-Packard and Apple.  Apple was first tied to suicides at Foxconn when an employee alleged to have lost or stolen an iPhone prototype jumped to his death.

    Foxconn employees were asked to sign a pledge earlier in the week that they wouldn't attempt to kill themselves, that included a provision that the company would not reimburse employees for injuries outside of work beyond the legal minimum.

    The clause seems to have been meant to dispel rumors that the company had been paying approximately 100,000 yuan ($14,640) to the families of employees who were committing suicides.

    Since that's essentially a year's salary -- starting pay at Foxconn is only 900 yuan ($131.76) a month -- there may have been some concern that the rumored payouts were tempting others into suicide.

    Foxconn rescinded the pledge.

    Jackson West figures Apple investors shouldn't worry, it's not like these suicides or moderate pay raises will affect the company's margins, as Foxconn's wage costs are only two percent of overhead.