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Nokia pays most of its employees in India well below a living wage

Helsinki (19.09.2011 - Juhani Artto) What does one do if the wage for full-time employment is not enough to cover the living costs of even a small family? This is an urgent question in Sriperumbudur in Southern India where Nokia and its subcontractors employ tens of thousands of workers in the manufacturing of mobile phones and related jobs.

Nokia's contract workers and trainees are paid no more than EUR70 per month. At the two Foxconn factories they receive EUR80 per month. Contract workers' and trainees' wages at Flextronics and Salcomp are approximately on a par with the other two.  

It is not unimportant how much contract workers and trainees are paid as a majority of employees belong to these categories. Among Nokia's personnel they make up slightly less than half of all employees but a clear majority at Foxconn, Salcomp and Flextronics.

As such meagre wages on offer to the majority of employees would mean severe deprivation for anyone trying to support a family it is no wonder that a large majority of the employees are single young men and women. On average the employees are only 22 years of age.

Nokia is keen to point out that even its lowest wages exceed by 25 per cent the official minimum wage in the state of Tamil Nadu but rest assured, this fact draws cold comfort from the low-wage employees. The local union and NGO activists estimate that a wage earner must of necessity bring home at least EUR130 per month to guarantee a minimum source of livelihood for his or her family. Nokia pays its permanent labour force anything from EUR95 to EUR186 per month, and Nokia's subcontractors in Sriperumbudur significantly less.

This data is made available in the report* published last week by Cividep, Finnwatch and SOMO. Prior to the publication Nokia and the other concerned companies had the opportunity to comment on the report, and they do not attempt to disclaim or deny the data in the report.

One may conclude from the report that the companies are seeking to reduce their labour costs by taking clear advantage or abusing the over-supply of labour. Although most employees have a very low wage and no prospects for career advancement, there are plenty more people out there willing to work as contract workers and trainees than there are jobs available. This enables Nokia and the other companies to maintain the unfair two-story structures of their personnel.

Where Nokia and Foxconn score better is in their recognition of the union organizations that have been set up by activists. Recognition came about as the result of a hard struggle on behalf of employees but, still, this kind of union recognition has been something new in the history of the Special Economic Zones in India. Both companies have also recognized employees' right to collective bargaining and agreements. The agreements signed in 2009 and 2010 following industrial action have significantly improved wages.

In order not to paint too rosy a picture of Foxconn's readiness to recognize employees' fundamental rights one needs to be reminded that during the dispute the company suspended hundreds of strikers. Some of them were still suspended at the time of the report being written and, according to the report, Foxconn has discriminated "in subtle and overt ways" against those who took part in the strike after a settlement was reached.

*Phony Equality. Labour standards of mobile phone manufacturers in India, September 2011, (52 pdf-pages)


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