Foxconn’s compensation debate highlights Taiwan’s wage problems

The Taiwanese company has come under criticism for comments its chairman has made about starting salaries for employees

Foxconn has been in the international spotlight for a few notorious reasons — one being its rash of employee suicides over the last couple of years. Its association with Apple device manufacturing has put it front and center in the human rights arena. But a recent debacle dubbed the “Liang Xiaohua incident” has brought the company further into controversial crisis.

The Taiwan-based company’s chairman Terry Gou has come under criticism for saying that he would be interested in buying any tech company that pays their college graduates $22,000 New Taiwan dollars (US$729), based on the notion that a company that could pay employees that salary must be a company worth focusing on. The controversy came when an anonymous employee posted online as Liang Xiaohua, and said that she receives only $22,000 New Taiwan dollars a month. 

The Wall Street Journal has reported that Liang Xiaohua is a technician at a Foxconn subsidiary that makes LCD panels called Innolux. Her comments have sparked fury across Taiwan about unfair wages and the available opportunities for workers in the country. What has aggravated the sentiments are the increased number of employees who have come forth to report that their wages are similar to hers.

This wage problem has come to light especially in regard to executive compensation reported by the company. But other companies in Taiwan have come forth with similar problems — or at least their employees have. Taiwanese electronics manufacturer Quanta Computer Inc. has reported that low average salaries are a product of the sluggish Taiwanese economy. Quanta’s Barry Lam stated: “The low salaries are an indication of the nation’s competitiveness.”

Online employment service provider 1111 Job Bank has reported that new college graduates in Taiwan are offered average starting salaries of $25,671 New Taiwan dollars. That figure is 2.64 percent up from figures in 2012. Whether or not the Liang Xiaohua incident will affect Foxconn’s work with U.S. technology companies is yet to be seen.

 

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Contributing Author

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Juliana Kenny

Juliana Kenny is a contributor to InsideCounsel.com, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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