Production Chains and Workplace Law Violations: The Case of Apple and Foxconn

Abstract

For decades U.S. based multinational companies have outsourced production of goods to developing countries with low labor costs and weak implementation of protective legislation. The consumer electronics giant Apple is a prime example: it outsources virtually all of its manufacturing to companies such as Foxconn, a Taiwanese original equipment manufacturer, which employs over a million assembly line workers in China. In the last several years Foxconn's operations have been under scrutiny for violation of Chinese domestic employment law. This paper focuses on the problem of compulsory overtime, a violation of both Chinese law and international labor standards, and various measures brought to bear on the problem. The analysis concludes that no single instrumentality is likely to eliminate compulsory overtime, but that a combination of pressures — better enforcement of domestic law, reports by non-governmental organizations, oversight provided by corporate social responsibility programs, and consumer reaction — may ultimately prove effective. Ameliorating the working conditions for workers abroad may also inure to the benefit of American workers through the process of reverse diffusion of labor norms.

Keywords: China, Taiwan, Apple Outsourcing, Labor, Employment, non-governmental organizations, corporate social responsibility, consumer boycotts

JEL Classification: J40