Foxconn finds itself in the position of paying 110,000 yuan (£11,000) in compensation to every person who jumps. For a depressed Foxconn employee, who still feels an obligation to repay his family for the cost of his or her upbringing and who would like to give his parents a lump sum that could transform their lives, this is a very tempting sum.Even in China, you get what you pay for and that's why incentives matter.
For a worker on the basic rate of 900 yuan a month, the compensation amounts to the equivalent of over ten years of gross salary. For a worker who is doing overtime and earning 1500 yuan a month, the compensation is still worth six years of salary.
If these enormous payments don’t stop, the suicides are unlikely to either.
Thursday, May 27, 2010
There have been a dozen suicides at the Foxconn factory where Apple's iPad and iPod are manufactured. The incentive structure in place means that Foxconn cannot stop the suicides: