Worker wages, how much?

Discuss The Industry
1

Hello, new and I just have a general question about fairphone.

first, I am aware this phone company produces phones in China, and while I understand it claims it does so in a more “ethical” way, does anyone here know how much the workers in their chinese factories actually make and how different it is than for workers in the same country who make parts for other phone companies ?

I’m not trying to pass judgement on this company one way or the other, but I was just wondering about this specific piece of information.

1 Like
2

You should be able to calculate it from the data given within post Don't read our 2023 Impact Report. Read this instead and also be able to find more details following the links mentioned there.

5 Likes
3

I look at that post and I don’t know where any information that specifically relates to pay for chinese factory workers is mentioned.

4

I was referring to

Screenshot_20241007-103646_Vivaldi
Screenshot_20241007-103646_Vivaldi1080×416 29.3 KB

and I’m quite sure you’ll find more details in the linked impact report.

2 Likes
5

I just saw this question and was curious too.
From this passage in this article on living wage:

On average, that means a month of extra salary per year for every worker we impacted.

I understand that what Fairphone adds (the difference with respect to another phone company) about a month of salary.

This may not seem much, but if it can allow to bridge the gap between a normal working week and decent living conditions it can make the difference. Especially if it’s well done and helps compensate for inequalities (but this is just speculation, I didn’t dig enough to find out)

2 Likes
6

tldr: more reading and actual numbers and calculations. The premium on the price of the phone ($1.20) to bridge the gap to living wage standard is much cheaper than I thought.

There actually is much more information in the article I linked above.

They say that for 8 hours/day, it’s $15/day (I have no clue if it’s 5 or 6 days/week, so from 315$ to 390$ a month) for a standard phone company.

They want to bridge the gap for the employees making Fairphone devices, so increase it to 21$/day (now maybe meaning around $500/month)

However, they say that they spread this bonus among all low-wage workers in the factory, not just the ones making fairphone (which I remember reading was the factory workers decision). So it only accounts for 15% of the gap to living wage for each.

They add that on the total price of the phone, this only makes up for a premium of about $1.20, which does make it seem ridiculous that other companies don’t do it too.

Although this last number seems really low to me, and makes me wonder if I’m not missing some info.

For example, how much does the assembly labor account for in the total labor needed to make the phone?

This would as well mean that the total assembly cost of the FP5 is 1.2×15/(21−15) = $3 and thus 7 phones can be assembled in 8 hours by one worker. To my surprise this seems to be the actual time needed.
My above calculation means 1 worker can make 25×21/(1.2×15/(21−15)) = 175 phones/month (21 worked days/month)
Page 14 of this report : https://www.fairphone.com/wp-content/uploads/2022/07/Fairphones-Guide-to-paying-living-wages-in-the-supply-chain.pdf (everything is in this report actually) there is a table showing 15000 phones/month / 88 workers = 170 phones/worker/month

Fairphone_Premium-cost-for-living-wage_report-p14_2024-10-07
Fairphone_Premium-cost-for-living-wage_report-p14_2024-10-07505×515 27.4 KB

Oh, and we now have the actual living wage salary/month: 4265 RMB so 607.66 USD.

Last note: they have a whole webpage on living wage: Living Wage - Fairphone, where I found the report above, and with a calculator to download for other companies to estimate the price premium needed to reach living wage standard for their own products (but the tool didn’t seem very useful to me to gather more info)

Anyway, I’m done for now, sorry for the wall of text :grimacing:

6 Likes
7

$950,000/6200 workers= $153 bonus per person.

Does paying a worker in china an extra $153 a month sound like they are now making a “living wage” to you ?

that term has a very specific meaning which the article itself talks about, it clearly states a living wage is $21 an hour.

edit I saw your follow-up comment after I typed this. the original article is very confusing overall because it talks about a factory worker making 15 dollars " on average". Maybe factory workers in the west make that, but since their phones are made in china, all this talk about “boosting” pay from $15 an hour to $21 makes no sense since their workers were never making that much to begin with. There seems to be a bit of playing word games here.

Overall, it feels like this company is confusing wages of people in first world countries and other places and not being clear who among their actual employees is earning what.

8

Ah, we posted simultaneously. I don’t think the calculation is that simple as you can see. They state $21 per day, not per hour…

It’s still far from good, but at least it’s actual progress.

Or do you mean to imply that we should never buy new smartphones? I understand, it’s a reflection I’ve had

Edit: indeed, $21/day. Is there somewhere in the article where it’s writen $21/hour? I think that is a lot even for a first world worker (I don’t even earn that much for a much more “qualified” job)

1 Like
9

you’re right, I’m totally wrong and it was talking about per day and not per hour.

So I guess this company’s position is that they are paying their workers a “living wage”
because they make 21 dollars a day instead of 15.

you can decide if you agree with that or not. Personally, that is not how I have heard the term
“living wage” defined and I think it’s irresponsible to hijack the term (for marketing purposes) for a wage which doesn’t actually fit the definition. But that’s my take.

10

I must admit that the number of “6200” workers helped seems astronomical. I have no clue how they get this number, except if they count every single person their money has touched (but this means tremendous turnover and/or part time), or maybe just count every worker again each month.

From my research above we can see they employ about 90 full time workers at a time, and the $950000 where spread over 5 years.
This grossly means about 950000/(90×12×5) ≃ $175/month, which kind of seems to fit the initial average living wage gap I found.

2 Likes
11

Well sure, go ahead and put words in my mouth and act like I said something I never did.

12

I agree, I think the problem is not just phones then: every single advantage you have in first world countries is basically based on the fact that the rest of the world is paid very little and some populations actually enslaved… that’s depressing and if lot’s of people do actual efforts, we’re definitely in denial about this (and about other stuff. Climate change and biodiversity loss are turning into more and more impossible problems to solve as we’re incapable of switching to societies not based on economic growth, and even perceived experts can’t agree. That’s just my opinion though).

To focus again on Fairphone, it’s not just the marketing department deciding what a convenient “living wage value” is for them, but an actual foundation, the WageIndicator Foundation, working seriously it seems (not that I knew them before).
In the living wage article they point to this link, where I think we can track down the numbers they use: Living Wages for Workers, Employers and Trade Unions - WageIndicator.org

Keep in mind that at least food and many basic commodities are much less expensive in other countries, so you still can’t really compare salaries 1 to 1, etc.

1 Like
13

It wasn’t rhetorical, but an actual question !
Sorry if you took it as an offense, no harm meant :slight_smile:

Edit: clarifying form, I tend to forget that in writing the tone is not conveyed well :grimacing:

14

no worries, it is sometimes hard to read tone online. I’m not that radical as far as buying phones go.

and I’ll take your point if 21 a day is truly what is considered a “living wage” according to some regional organization, although this “wageindictator.org” seems to require email verification just to check that info which is really suspicious, like they want to track people who wish to look up what living wages are.

However…I think the issues of employing people in a country like china, go far beyond issues like modest pay bump. I think a company that truly claims to care abut its workforce would recognize that workers in china simply have no rights at all given that countries system of government.

1 Like
15

Good point… I must admit my preferred aspects were always the customisability of fairphones, and the fact that they’re designed to last, so I wouldn’t need to change every 3 years (much less waste and harm done)

The fair aspect isn’t just wages either: minerals extraction often involve slavery, and I think that’s more of a priority that Fairphone deals with quite well.

Communication wise, I believe they’re as well juggling with constraints: if they start bashing on China, I imagine they could end up losing their supply chain here, and losing the trust of their investors for example.
But they definitely could state every time they talk about their workers something like “Keep in mind China isn’t a democracy, but our actions do make a difference on a small scale, which is better than nothing”.
And not brag too much on that yes…

I’m stopping now for today, I wish you a good day :wink:

16

Out of curiosity, what definition are you referring to?

17

They help 90 people? That’s it?

I have to say, I’m surprised. When I read the 6200 number I expected them to actually help… 6200 people.

18

Just a thought before I dig into data.
Since they spread the benefit of the living wage to all the factory workers (including those not employed by FP), wouldn’t that mean that everyone gets a smaller amount? That might explain the discrepancy in numbers…

19

Yeah, after looking at the pdf this user mentioned, it seems they do indeed employ around 90 full-time workers, or 88 to be exact.

I thought just like you and I hate when companies (including apparently ones with a good-hearted mission statement) employ these kind of misleading tactics.

As another factor, the pdf is also interesting because it talks about how the company “consulted” workers about how best to distribute the bonus. Frankly, it’s a ridiculous position to put someone in. Imagine your boss calls a meeting to decide who among the company workers
deserves the most bonus money, or who deserves the least.

Why are they distributing “bonuses” in the first place and not just giving everyone a pay increase ?

1 Like
20

Well Ingo, I guess the only thing that really matters is whether or not it fits
your own definition of a living wage, so I won’t tell you what to believe.