The growing Foxconnification of the workforce

By Regina Joseph
February 9, 2012

Without yielding to irrational 2012 Mayan apocalypse theories, can we claim mass suicide now as a bellwether of 21st century free-market economics?

Last month, the spectacle of dozens of Chinese electronics workers gathered on the roof of a factory dormitory in Wuhan and threatening to jump en masse if management did not adhere to their wage promises seemed as extreme as it was troubling. Yet it was shrugged off by many Western observers as exemplary of the outer limits inherent in China’s colossal drive to create an urban middle class from the hundreds of millions of rural poor.

Contrast that with last week’s federal lawsuit raised by an American of Chinese descent, Xuedan Wang, against the Hearst Corporation: Wang, a 28-year-old college graduate who toiled as an unpaid intern at Harper’s Bazaar magazine, alleges the company violated U.S. labor laws by refusing to conform to wage and hour rules (full disclosure: I work for a few companies who hire unpaid interns). Her hopes of turning the suit into class-action litigation dovetails with a torrent of emerging similar claims over companies and institutions increasingly exploiting young people as an unpaid labor force.

At first you may assume the cases are incompatible as lodestars of our interdependent global economic predicament: How can one really compare the luxury problem of a middle-class American fashionista to the travails of aspirant blue-collar laborers in China?

Yet their quandaries are bound up in a larger economic phenomenon I call Foxconnification (so-named after Foxconn, the notorious electronics manufacturing subsidiary of Taiwan’s Hon Hai Precision Industry Company Ltd, which supplies Apple’s iPhones and iPads and whose work demands provoked not just the aforementioned threatened mass suicide but also several independent suicides): the individual tendency toward willful self-enslavement in order to survive a harsh labor market.

The “freedoms” promised by globalization and technology are, to a degree, illusory. Yes, you may now immediately gratify your need to observe news in real time, or contact and do business with anyone almost anywhere, or just watch kittens wear goofy hats. But a macro consequence of worldwide commercial linkage suggests a trap. When so many countries plug into an international trade system that drives information- and service-led growth in advanced countries and pushes manufacturing and industry in emerging nations, where labor is cheaper, workers will progressively be forced to make ever larger tradeoffs to survive, including compromising on their health and safety, as well as the payment reward for their labor.

This is hardly a neo-Marxist critique. Even though workers in China are steadily familiarizing themselves with and demanding the trappings of Western-style middle-class consumerism, they have to put up with brutal conditions to achieve them — working environments that tantalize employees with the promise of upward social mobility only to grind them down until death seems the preferable option. China is not alone in building its middle class through vicious employment structures, of course; individuals in such countries as India, Peru, Brazil and Thailand, for example, must make the same fateful job calculus. Furthermore, Chinese observers claim that Foxconn’s setting is a definitive improvement on that of other, smaller manufacturers, as well as on the circumstances of rural poverty that drive eager citizens to continue taking these jobs in spite of what they know.

Indeed, pundits and economists ranging from Nicholas Kristof to Jeffrey Sachs to Paul Krugman have made the case for sweatshops as an integral step in the financial ascent of developing countries. To paraphrase Krugman, a bad job is better than no job, especially when such work lifts you and millions of others out of destitution so that you may eat. But what happens when countries emerge from developing status into mature economies and exploitative labor remains a prevalent strategy? America’s capitalist titans are not above mimicking some of China’s employment tactics; so how can we expect progressive policies to arise in countries as their economies strengthen? Certainly, rule of law is not enough, and neither is the so-called American Dream.

In the West, employment conditions may not currently incite the same levels of despair, but they are finally starting to raise awareness and anger. With youth unemployment at 18 percent as fewer paying jobs open up, individuals must turn to unpaid internships just to get a foot on the ladder, thus exposing themselves to rampant illegal behavior by companies taking advantage of eager workers. The current lawsuit against Hearst by Wang marks an inflection point that highlights both each country’s labor laws and each country’s lack of adherence to them as corporate interests dominate. Like the U.S., China has minimum wage laws, laws against withholding wages, and health and safety regulations. As in China (and many other countries), U.S. companies often see fit to ignore these laws for the sake of higher profit.

American observers watching the Wang case have opined that unpaid internships are a necessary boon for providing young people with the kind of contacts and training they need to move up, a mild twist on the ideas of Krugman, Kristof and Sachs. But whereas the sweatshop economy theory holds some weight as it applies to developing countries, it loses complete integrity if applied to the world’s largest economy. Furthermore, U.S. labor laws — though long overdue for an update as they must apply to an Information Era — are still reasonably clear on what constitutes work that qualifies as an internship and thus is exempt from salary. Nevertheless, hundreds of organizations continue to flout the law, knowing full well that they are not alone; that interns whose free work contributes to a corporate bottom line rarely complain out of fear of retribution; and that compliance policing is nonexistent. (This is amply documented in Ross Perlin’s Intern Nation: How To Earn Nothing and Learn Little in the Brave New Economy.) In light of the millions of unemployed Americans who see no other option but to offer their services for free at the whim of possibly unscrupulous employers, Wang’s brave move should be perceived as an important blow on behalf of the 99 percenters.

It has none of the drama of threatening to jump off a building, but it serves as an important milestone as the U.S. considers how to adapt to a globalized system in which it must serve as an example, lest it be accused of hypocrisy. As this worldwide, interlinked, eco-system of labor evolves, leaving millions of people struggling to catch up to it if they even can, the question we need to ask regardless of where we live is: to what extent will we allow ourselves to be willingly reduced to robo-labor? Wang’s example of speaking truth to power demonstrates that as individuals we can attempt to stem the tide of Foxconnification.

PHOTO: Workers from Foxconn take part in a “Treasure Your Life” rally inside a stadium at a Foxconn plant in the southern Chinese township of Longhau in Guangdong province, August 18, 2010. REUTERS/Bobby Yip

16 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

If many politicians had their way, US workers would not be able to make any more than minimum wage, and minimum wage would be zero. Who is going to buy your products when the middle class is gone?

Posted by oneill | Report as abusive

bitterweed:
Way to prove the author’s point with a fact-free rant.

Posted by PhilPerspective | Report as abusive

India has been at this quietly since forever. Some estimates put the the number of farmers who committed suicide since Manmohan Singh took office at 300,000!

Posted by Suchindranath | Report as abusive

What is really insidious about the unpaid internships is only the really wealthy can afford to take them. Poorer graduates have to resort to flipping burgers in order to eat.

This means only the wealthy get the kind of ‘contacts and training’ they need.

It is the way it has always been.

Posted by Dafydd | Report as abusive

i just love the word Foxconnification.
;)

Posted by socialnetworks | Report as abusive

This author would have similarly empathized with all the buggy-whip fabricators displaced by the automobile. The social and personal disruption is real and disturbing, but necessary.

Economies are not like rocks of a given size, but are constantly growing or shrinking. They “adjust” just as the earth must “work out” increasing localized stress by earthquakes and tsunami waves. Again, the social and personal disruption is real and disturbing, but, by and large, unavoidable.

In a time of instant gratification we forget that while true progress in human living conditions has occurred in a relatively brief and recent time, this “leap forward” has NOT been everywhere. Where it HAS occurred taken generations to progress from a relatively “hard life” to the “good life”.

It has long been a “tactic” of the exceptional to offer to work for free for some period to demonstrate their worth to a potential employer. Every employer knows that an above-average employee adds more to their “bottom line” than a below-average employee and so grants more opportunity and/or pay over time in fair exchange.

There is “natural selection”, or “pressure” in any labor force. It is always the least skilled, the least intelligent, and the least productive that are released or replaced as opportunity presents.

Posted by OneOfTheSheep | Report as abusive

Yes it’s true that sometimes exceptional people get a good job by volunteering first. That’s how my wife continued her career after we relocated.

It’s also sadly true that some businesspersons will abuse the situation to the extent they can. I worked at one place where one of the owners fired a long-time ( very diligent and competent) employee just so they could take advantage of a free “trainee” for 6 months. They fired the trainee after 5 and a half and did it again. On the third firing in just under 18 months, all just before the free training period ended the county employment office told him his free ride was over.

While he got a “free” worker for a year and a half they totally lost the respect of the rest of the staff. The best of us were recruited by other firms and gladly quit.

Posted by CHW | Report as abusive

We want to make sure we understand.

This Wang Xuedan took an internship at Hearst — and only then found out it was, well, an internship, meaning no pay for work probably worth just about that? Or did she take it knowing it was unpaid, like every other unpaid internship in the history of millions of kids looking for experience they can’t get in college?

And then, after “toiling” for Hearst, she sued them because her unpaid internship didn’t include pay? And she hopes to turn her suit into a class action?

Did we leave anything out?

Good luck finding a paying job in your future, Ms Wang. Be sure to include on your resume your experience as the lead plaintiff in a class-action labor suit, because it’s on Reuters, Facebook, Twitter, and Linked-In now, so it’ll be hard to hide.

We’re sure you’ll be a real catch for your future employer.

By the way, you’re right, we think “the cases are incompatible as lodestars of our interdependent global economic predicament,” whatever that means. Nothing as nuts as Ms Wang’s suit would last five minutes in China.

Posted by WeWereWallSt | Report as abusive

good article regina

(quote) the question we need to ask regardless of where we live is: to what extent will we allow ourselves to be willingly reduced to robo-labor?

and “foxconnification” is an excellent meme: it has a double-entendre with the propaganda-like reporting of fox news and others in that murdoch media mafia aka. aussie cockroach colony

we need more exposes of american corporate exploitation under the disguise of globalisation;

Posted by scythe | Report as abusive

U.S suicide rates according the C.D.C. average 10.8 per 100,000 U.S. citizens. Foxconn employs 800,000 persons and their suicide rate is GASP! a whooping .7 per 100,000 employees according to wikipedia. Silly little facts they always get in the way. Also I have not been able to substantiate this but I’ve heard Foxconn has a waiting list of about 30,000 persons wanting to work for them

Posted by Bouncy | Report as abusive

In the mid-1700′s to mid-1800′s it was called indentured Servitude… or something of that sort….
So now we have come full circle, back to the days when industrialists were the dictators, and the 99% were the slaves, and serfs. To be used as grease for the engines of technology…..
Get schooled, it’s educational….

Posted by edgyinchina | Report as abusive

The issues with unpaid internships in China are far worse that the author alludes to in this article. In addition to their minimally paid employees, Foxconn uses what is in reality slave labor from Government-sponsored, FORCED internships to build Apple products (see: http://www.alternet.org/story/154043/iem pire%3A_apple%27s_sordid_business_practi ces_are_even_worse_than_you_think/ ).

Although Reuters has done an exceptional job at bringing the internship and other issues to the fore, no author has written an opinion piece on whether or not it is moral for companies like Foxconn and the corporation like Apple that profit from them to treat people like pieces of disposable machinery. I wish you would.

Posted by cacritic | Report as abusive

I agree that the intern phenomenon is spreading here in the US. I know of one business in particular who fired (they call it laying off, but the workers never come back) about 25 percent of their lowest paid workers, and then replaced them with interns. At the same time, all of the upper level management kept their jobs with no reduction in benefits or wages, or increased responsibilities. The quality of the work went down, but as long as they can show the same number of customers served, they get paid the same amount under government contract. In fact, when they get a contract now, their first thought is to staff it with interns so they don’t have to pay more employees. Not hiring full time employees is their number one goal, after keeping their own salaries and benefits of course.

Posted by lhathaway | Report as abusive

@edgyinchina,

Hello? Anybody home? You’re a little late to the party.

Indentured servitude and apprenticeships were pillars of an essentially illiterate society. Books and a literate society (excepting those who CHOOSE not to learn or stay in school) changed all that, long before you were a gleam in your father’s eye.

If, at first you don’t succeed, skydiving is not for you.

Posted by OneOfTheSheep | Report as abusive

I know of one company where 90% of the workers were unpaid interns! And they were ALL FOREIGNERS!!! All the better for Mr. Mulligan, the man in charge of that sweat-shop, to keep them under his thumb… Those university students, on their summer break, were being given NO training whatsoever (I have no doubt that this was contrary to what they had been led to believe). Instead, they were working long office hours doing telesales from a dark, stuffy office. I went there for a job interview, asked Mr. Mulligan some awkward questions, and we both sort of looked at each other and sensed that employing me at his company would be right for either for us…

Posted by matthewslyman | Report as abusive

CORRECTION: “would [NOT] be right for either for us”

Posted by matthewslyman | Report as abusive

[...] among these is last month's class-action filing by Xuedan Wang, a 28-year-old former intern at Harper's Bazaar. She alleges that Hearst Corp., the [...]