Not only that but since these Foxconn assembly workers get paid so little would a 25% wage increase amount to that much of an increase in capital expenditure?
If it costs them $100 million per quarter in additional manufacturing costs that is $100 million taken directly from profits per quarter. If they have an executive that wanted to fire retail store employees to save a dime it's hard to see how Apple wouldn't want this amount of savings.
There are also other costs associated with Foxconn and their employees now that they have reduced the workable hours. From the employee's PoV they get less OT hours which means less money. They also have more free time to spend money. I doubt it's possible for them to work a 2nd job while at Foxconn. They might make more money per week with the raise but I doubt it's much.
Then you have Foxconn's PoV. All these people are working less hours so to keep the factories running at full tilt you need more people which means more housing and more of everything, including additional security et al. to keep the extra influx in check.
Apple may even benefit from this as a worker might not be as tired and therefore make less mistakes. Even a 0.01% reduction in errors is a lot of product. It could also be more employees that will have to for Foxconn for a longer duration to save up enough money when you consider that they'll have more idle time which could mean Apple benefits from more skilled workers thus reducing errors even more.
On the surface it looks like Foxconn workers are making out the best here but that's only if you look at percentage of the wage increase. If you look at everything that's changed I wonder if Apple is the one who is making out the best here.
I just don't get this story at so many different levels. Sounds like pure nonsense.
How can Apple send a check for some other company's wages? Send it to whom, with what instructions? How does it show up (or not) as a difference in Apple's gross margins? Apart from component costs, GM should include only direct labor costs, but in order to record it as 'direct', wouldn't Apple have to employ them?
Moreover, attributing a decline in Apple's margin by 3.2% of sales from doing this would imply that Apple sent Foxconn a check of (something in the region of) $5B during the forthcoming year. Assuming one-quarter of Foxconn's 1 million employees work full-time-equivalent on Apple products, that would be sending a check of ~$20,000 per worker.
Is my arithmetic wrong?
I assumed the way the wage increase was happening when this first happened was that Apple agreed to pay Foxconn more per unit if Foxconn agreed to pay employees working on Apple's products an increase in their wage. I'm sure it's more complex as that as the change in employee hours means Foxconn needs to invest in a lot more things to get more employees just to produce the same amount, but it's certain that Apple isn't paying Foxconn employees directly.
I think the story has been twisted a bit to make it seem like Apple is paying Foxconn's employees when it's Foxconn that is paying their employees more if they work on Apple's products per an agreement they've setup with Apple.
Apple's capital expenditures ballooned from $440 million in the December 2011 quarter to $2.1 billion in the June quarter. But those expenses were not related to Apple's plans to expand its corporate campus, Ahmad said, as the company recognized those costs in 2010.
I assumed the way the wage increase was happening when this first happened was that Apple agreed to pay Foxconn more per unit if Foxconn agreed to pay employees working on Apple's products an increase in their wage. I'm sure it's more complex as that as the change in employee hours means Foxconn needs to invest in a lot more things to get more employees just to produce the same amount, but it's certain that Apple isn't paying Foxconn employees directly.
I think the story has been twisted a bit to make it seem like Apple is paying Foxconn's employees when it's Foxconn that is paying their employees more if they work on Apple's products per an agreement they've setup with Apple.
Even if that is true, the amount attributable per worker -- see the calculations above -- makes no sense at all relative to their average wage.
If the story is to believed, Apple is paying a percentage of Foxconn's worker wage increases out of it's own pocket. Whether this is actually true or not is another matter.
Maybe, but that doesn't make it a subsidy. More like a worker happiness surcharge or something. A subsidy is when you get nothing in return.
Even if that is true, the amount attributable per worker -- see the calculations above -- makes no sense at all relative to their average wage.
I've completely ignored the values in the article. I find that to be a good rule or thumb. The only thing I feel I know for certain is that a Foxconn employee who has their pay increased by 25% but their weekly hours reduced will be making less than 25% more per week.
…an analyst attempting to create downward pressure on AAPL stock.
He should try harder (read: not at all).
Originally Posted by SpamSandwich
This is exactly the kind of false reporting that Apple should sue over.
Should sue over ALL of it… Or at least one big, painful suit for each type of falseness. That would put a serious damper on any future attempts to do a wide range of… what's it called, predatory reporting?
Nope. Apple is a slavedriver and sweatshop owner. Apple workers in China commit suicide by the millions. They get beaten to a pulp by the Apple guards. This entire story is a lie.
????
I like sarcasm as much as the next person,
but, this post (like so many others), is a perfect example of why you really should
use one screen name as a moderator, and a different one as a commentator/contributor.
I like sarcasm as much as the next person,
but, this post (like so many others), is a perfect example of why you really should
use one screen name as a moderator, and a different one as a commentator/contributor.
What different would it make? You know he's a mod even if he creates a new account just for modding and it's not like you know it's him when he deleted spam or bans a troll. I think it's ridiculous that someone who has agreed to keep the forum civil for free should get any grief when he posts in a way that you don't agree with. If he' breaking the forum rules then report that but if he's not then don't worry about his opinions. He's just a forum member who was given additional rights, not rights if he agreed to stop being a forum member.
As Apple increases its already exceptional chinese factory wages for the "adult" work force that they employ, Samsung shrugs as their child labor makes Apple clones daily. But its ok, from what i hear apple is evil.
"This is because Android-based smartphone proponents aren't very intelligent or they are dishonest. While that may seem a harsh statement it is reality. They are blinded by their hatred of Apple.
I have never understand Apple-hatred from anyone other than an information technology professional although even then the hatred isn't justified. Some information technology professionals believe Apple computers will make their function nearly obsolete if everyone has a computer that "just works." This is not true, they simply need a different skill set but they can't imagine proactive service and support instead of responding to every "fire." Alternatively, the "fires" make them seem like heroes which likely means to receive more funding."
This is actually a pretty cool story. I'm sure Chinese factory worker wages are horrible compared to US wages, but their cost of living is less. Apple is fighting a good fight.
It's going to be an interesting century as Chinese and Indian labor comes online, which will create a labor glut and makes it uneconomical for expensive labor countries to make anything. I can't wait for the day when all labor costs and wages around the world are comparable -- I probably won't be alive to see it, but it'll be painful until it happens.
Actually the average American wage is horrible, straight up slave wage pay check to pay check. People keep factoring in the exchange rate so of course it sounds like they're making a slave wage, but people forget that China and the Chinese do not run on USD, their cost of living is not in USD.
Did you know Chinese workers pay no income tax if they make under $4000RMB? They have no sales tax, they do not have to tip when they go out to eat (as a matter of fact it is not customary to tip in East Asian countries).
Making $4000RMB in China is the same as a US worker making $4000USD, imagine if you paid ZERO tax if you made less than $4000USD?
The Chinese worker does not have to pay rent as most of them live on site, they do not need to pay for food as the company provides that for them. When you factor in no income tax for <$4000RMB earners, no sales tax, no tipping, no rent, food and transportation expenses you start to wonder who is the real slave in this picture.
It's also not surprising that the Chinese were the biggest spenders in this years London Olympics. Their middle class makes our middle class look like poverty.
Comments
If it costs them $100 million per quarter in additional manufacturing costs that is $100 million taken directly from profits per quarter. If they have an executive that wanted to fire retail store employees to save a dime it's hard to see how Apple wouldn't want this amount of savings.
There are also other costs associated with Foxconn and their employees now that they have reduced the workable hours. From the employee's PoV they get less OT hours which means less money. They also have more free time to spend money. I doubt it's possible for them to work a 2nd job while at Foxconn. They might make more money per week with the raise but I doubt it's much.
Then you have Foxconn's PoV. All these people are working less hours so to keep the factories running at full tilt you need more people which means more housing and more of everything, including additional security et al. to keep the extra influx in check.
Apple may even benefit from this as a worker might not be as tired and therefore make less mistakes. Even a 0.01% reduction in errors is a lot of product. It could also be more employees that will have to for Foxconn for a longer duration to save up enough money when you consider that they'll have more idle time which could mean Apple benefits from more skilled workers thus reducing errors even more.
On the surface it looks like Foxconn workers are making out the best here but that's only if you look at percentage of the wage increase. If you look at everything that's changed I wonder if Apple is the one who is making out the best here.
I assumed the way the wage increase was happening when this first happened was that Apple agreed to pay Foxconn more per unit if Foxconn agreed to pay employees working on Apple's products an increase in their wage. I'm sure it's more complex as that as the change in employee hours means Foxconn needs to invest in a lot more things to get more employees just to produce the same amount, but it's certain that Apple isn't paying Foxconn employees directly.
I think the story has been twisted a bit to make it seem like Apple is paying Foxconn's employees when it's Foxconn that is paying their employees more if they work on Apple's products per an agreement they've setup with Apple.
Quote:
Originally Posted by AppleInsider
Apple's capital expenditures ballooned from $440 million in the December 2011 quarter to $2.1 billion in the June quarter. But those expenses were not related to Apple's plans to expand its corporate campus, Ahmad said, as the company recognized those costs in 2010.
Wages are not capital expenses.
Quote:
Originally Posted by SolipsismX
I assumed the way the wage increase was happening when this first happened was that Apple agreed to pay Foxconn more per unit if Foxconn agreed to pay employees working on Apple's products an increase in their wage. I'm sure it's more complex as that as the change in employee hours means Foxconn needs to invest in a lot more things to get more employees just to produce the same amount, but it's certain that Apple isn't paying Foxconn employees directly.
I think the story has been twisted a bit to make it seem like Apple is paying Foxconn's employees when it's Foxconn that is paying their employees more if they work on Apple's products per an agreement they've setup with Apple.
Even if that is true, the amount attributable per worker -- see the calculations above -- makes no sense at all relative to their average wage.
Quote:
Originally Posted by Slurpy
If the story is to believed, Apple is paying a percentage of Foxconn's worker wage increases out of it's own pocket. Whether this is actually true or not is another matter.
Maybe, but that doesn't make it a subsidy. More like a worker happiness surcharge or something. A subsidy is when you get nothing in return.
I've completely ignored the values in the article. I find that to be a good rule or thumb. The only thing I feel I know for certain is that a Foxconn employee who has their pay increased by 25% but their weekly hours reduced will be making less than 25% more per week.
Apple squeezes its retail employees, while giving handouts to its supplier's workers?
If this were true then Cook would be sitting on a PR powder keg.
#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
Quote:
Originally Posted by Rayz
Apple squeezes its retail employees, while giving handouts to its supplier's workers?
If this were true then Cook would be sitting on a PR powder keg.
#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
This is exactly the kind of false reporting that Apple should sue over.
Originally Posted by SpamSandwich
…an analyst attempting to create downward pressure on AAPL stock.
He should try harder (read: not at all).
Originally Posted by SpamSandwich
This is exactly the kind of false reporting that Apple should sue over.
Should sue over ALL of it… Or at least one big, painful suit for each type of falseness. That would put a serious damper on any future attempts to do a wide range of… what's it called, predatory reporting?
Quote:
Originally Posted by Tallest Skil
Nope. Apple is a slavedriver and sweatshop owner. Apple workers in China commit suicide by the millions. They get beaten to a pulp by the Apple guards. This entire story is a lie.
????
I like sarcasm as much as the next person,
but, this post (like so many others), is a perfect example of why you really should
use one screen name as a moderator, and a different one as a commentator/contributor.
What different would it make? You know he's a mod even if he creates a new account just for modding and it's not like you know it's him when he deleted spam or bans a troll. I think it's ridiculous that someone who has agreed to keep the forum civil for free should get any grief when he posts in a way that you don't agree with. If he' breaking the forum rules then report that but if he's not then don't worry about his opinions. He's just a forum member who was given additional rights, not rights if he agreed to stop being a forum member.
As Apple increases its already exceptional chinese factory wages for the "adult" work force that they employ, Samsung shrugs as their child labor makes Apple clones daily. But its ok, from what i hear apple is evil.
"This is because Android-based smartphone proponents aren't very intelligent or they are dishonest. While that may seem a harsh statement it is reality. They are blinded by their hatred of Apple.
I have never understand Apple-hatred from anyone other than an information technology professional although even then the hatred isn't justified. Some information technology professionals believe Apple computers will make their function nearly obsolete if everyone has a computer that "just works." This is not true, they simply need a different skill set but they can't imagine proactive service and support instead of responding to every "fire." Alternatively, the "fires" make them seem like heroes which likely means to receive more funding."
LOL. Funniest post ever. Thanks!
Activists on the warpath aren't they?
Aple and Samsung already reimburse their suppliers over this. Now who else going to the the target?
Quote:
Originally Posted by Srice
This is actually a pretty cool story. I'm sure Chinese factory worker wages are horrible compared to US wages, but their cost of living is less. Apple is fighting a good fight.
It's going to be an interesting century as Chinese and Indian labor comes online, which will create a labor glut and makes it uneconomical for expensive labor countries to make anything. I can't wait for the day when all labor costs and wages around the world are comparable -- I probably won't be alive to see it, but it'll be painful until it happens.
Actually the average American wage is horrible, straight up slave wage pay check to pay check. People keep factoring in the exchange rate so of course it sounds like they're making a slave wage, but people forget that China and the Chinese do not run on USD, their cost of living is not in USD.
Did you know Chinese workers pay no income tax if they make under $4000RMB? They have no sales tax, they do not have to tip when they go out to eat (as a matter of fact it is not customary to tip in East Asian countries).
Making $4000RMB in China is the same as a US worker making $4000USD, imagine if you paid ZERO tax if you made less than $4000USD?
The Chinese worker does not have to pay rent as most of them live on site, they do not need to pay for food as the company provides that for them. When you factor in no income tax for <$4000RMB earners, no sales tax, no tipping, no rent, food and transportation expenses you start to wonder who is the real slave in this picture.
It's also not surprising that the Chinese were the biggest spenders in this years London Olympics. Their middle class makes our middle class look like poverty.