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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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