Foxconn is Apple's main contract manufacturer and it has been under pressure for the way it handles its workforce. Reportedly, the Fair Labor Association, in a survey of three Foxconn plants and over 35,000 workers, found multiple violations of labor law including extreme working hours and unpaid overtime.
This has led Foxconn and Apple to drawing up an agreement which promises to tackle wage and working conditions of the workers. Specifically, Foxconn will hire tens of thousands of new workers to alleviate work load, clamp down on illegal overtime, and also improve safety protocols, housing and provide additional amenities. Viewed as a whole, these moves are aimed at improving the quality of workers' lives.
From a labor rights perspective, this move is most welcomed. Furthermore as two of the most prominent players in the tech and manufacturing industry, this landmark agreement also sets the bar for the rest of the sector. However, this could also inadvertently lead to increase costs of production which could lead to consumers paying more for their beloved Apple gadgets.
Meg Whitman, CEO of HP, who is also one of Foxconn's customers, said that "If Foxconn's labor cost goes up ... that will be an industry-wide phenomenon and then we have to decide how much do we pass on to our customers versus how much cost do we absorb."