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Latest Foxconn Controversy: The Apple Supplier Exploits Student Interns

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Another day, another Foxconn controversy.

Yes, Foxconn, now probably world-renowned for being the assembler-in-chief of Apple’s (AAPL) iPads and iPhones, and which also assemble products for Amazon (AMZN), Sony (SNE), Dell (DELL), Microsoft (MSFT) and Hewlett-Packard (HPQ), has made headlines in the past few months for the harsh working conditions it imposes on its factory workers in China.
In response to an audit by the independent authority, the Fair Labor Association, or FLA, that revealed the company flouted numerous labor laws, Foxconn head honcho Terry Gou pledged on Monday to increase work pay and cut working hours for workers at its plants.
However, just a day after he made his remarks, a fresh controversy has erupted over Foxconn’s labor policies. This time, it’s allegations that the company is reliant on tens of thousands of student interns to augment its labor force, and that some of them, possibly as young as 16, could be on non-voluntary internships.
Making the allegations was the group, Students and Scholars Against Corporate Misbehaviour, or Sacom, which accused Apple, Foxconn and the FLA of deliberately disregarding the issue of forced internships, the Guardian reported.

In December, 1,500 students were sent by just one vocational college in Henan, China's most populous province, for internships at Foxconn's Zhengzhou plant, which Apple chief executive, Tim Cook, visited last week. The Yancheng Evening News, which exposed the practice, interviewed students who said they were going against their will and that their schools were acting as "labour agencies".

In March, Sacom published a public letter to Apple CEO Tim Cook, urging him to call on Foxconn to stop the use of student workers. The letter said:

"Students who major in subjects such as pharmacy, tourism and language end up working as interns at Foxconn. Some students even complain that if they refuse the 'internship' at Foxconn, they will be forced to drop out of school. This is a form of involuntary labour, which is approved by Apple in producing its products."

According to the findings of the FLA report, Foxconn averaged 27,000 intern hires each month. The report also recommended that interns work no more than eight hours daily for five days a week, and that they should never have to work for more than six days in a row.
However, Sacom claimed that that it was actually commonplace for Foxconn interns to work 10-hour days and 6-day weeks. The Guardian corroborated Sacom’s findings.

Now, is this really outrage-worthy? Perhaps not, argues Tim Worstall of Forbes. Worstall notes, correctly, that while Americans routinely pick up unpaid internships on their way up the career ladder (those in the media industry can certainly empathize), the Foxconn student interns actually get paid, even if it is a pittance.
As Wostall surmised:

So, the latest complaint about Foxconn’s dastardly exploitation of Chinese workers seems to boil down to the idea that vocational students are told to get a vocational placement in order to graduate and they’re paid better than almost any intern in the English speaking world while they do so.

Some oppression, huh?

To be fair to Sacom and other concerned groups, there is perhaps a difference in the treatment of interns here in the US and in China.
While unpaid interns here might be subjected to nightmare supervisors like Miranda Priestly from The Devil Wears Prada, Foxconn student interns have to, as one told the Guardian, “spend a shift removing badly applied paint from parts using cloths soaked in a chemical, butanone” with only a "simple face mask."
Regardless of where you stand on this issue, the FLA has quickly responded to this latest controversy, telling MSNBC that it “and local organizations will continue to closely monitor the internship program at Foxconn.”

(See also: Maybe We Should Stop Blaming Apple for the Woes of Chinese Factory Workers
POSITION:  No positions in stocks mentioned.