In what has to be one of the strangest financial incentives ever, and one that must be unintended, Foxconn Technology in China is paying six to 10 years of gross salary to families of its workers who commit suicide at the factory.
The payments of as much as $15,000, according to a New York Times story, are settlements with the families that some factory workers may have viewed as incentive to kill themselves, knowing their families would be helped by the tremendous windfall after they died. It's a grim way for a poor Chinese worker to help his parents out for raising him.
There have been 13 suicides or suicide attempts this year on two Foxconn campuses in Shenzhen, China, where employees live and work. The factories have about 400,000 employees and make products for global companies like Apple, Dell and Hewlett-Packard.
As reported on the Freakonomics blog, Foxconn is paying £11,000, or 110,000 yuan, in compensation to every person who jumps. For a worker earning the basic rate of 900 yuan a month, it amounts to more than 10 years of gross salary, according to the London Telegraph. For a worker who is doing overtime and earning 1,500 yuan a month, the compensation is still worth six years of salary.
And those numbers may be increasing, as Foxxconn has raised salaries twice in the last five days in an effort to improve working conditions and stop suicides. A Times story on the factory's first death this year showed that even with overtime, the man who killed himself earned the equivalent of $1 an hour.
According to the Times, the company announced the latest increase on Sunday, saying that after a three-month trial period, the basic salaries of many of its workers in China could reach nearly $300 a month, more than double what they were a few weeks ago.
Young Chinese workers may no longer want to endure being part of the cheap labor army of China, but giving them a way out by paying their families after their suicides is a poor way of showing how much Foxxconn cares for its workers.
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