Wages in Global Supply Chains

2021 ◽  
pp. 112-147
Author(s):  
Jinsun Bae
Keyword(s):  
Labor Market ◽  
Supply Chains ◽  
Codes Of Conduct ◽  
Code Of Conduct ◽  
Global Supply Chains ◽  
Living Wage ◽  
Hourly Wage ◽  
Private Regulation ◽  
Labor Market Conditions ◽  
Wage Rates

This chapter assesses progress on wages in global supply chains, using AUDCO data. The data include hourly wage rates, the gap between actual wages and minimum wages, the gap between actual wages and take-home pay, and finally the gap between these paid wages and a number of different living wage estimates drawn from 14,315 reliable audits done during the period 2011–2017 in ten countries and seven industries. These data show that wages in all countries have increased and are above the minimum wage (with a few exceptions in a small number of audits). Of course, it is difficult to credit private regulation programs with these increases, given the numerous other influences on wage levels — not the least being local labor market conditions as well as prices paid to suppliers for their product. But the fact that wages paid are above the minimum in most countries is at least consistent with code of conduct commitments. The evidence also shows that wages have been increasing every year — some codes require annual year-on-year increases. Moreover, it demonstrates that wage levels are nowhere near the living wage required by many codes of conduct. The gaps are large, and wages would need to increase considerably to reach the living wage commitments made by global firms in different countries and industries.

Private Regulation of Labor Standards in Global Supply Chains

2021 ◽  
Author(s):  
Sarosh Kuruvilla
Keyword(s):  
Supply Chains ◽  
Codes Of Conduct ◽  
Regulatory System ◽  
Labor Standards ◽  
Global Supply Chains ◽  
Private Regulation ◽  
Labor Conditions ◽  
Voluntary Regulation ◽  
Corporate Codes Of Conduct ◽  
Multi Stakeholder

This book examines the effectiveness of corporate social responsibility on improving labor standards in global supply chains. The book charts the development and effectiveness of corporate codes of conduct to ameliorate “sweatshop” conditions in global supply chains. This form of private voluntary regulation, spearheaded by Nike and Reebok, became necessary given the inability of third world countries to enforce their own laws and the absence of a global regulatory system for labor standards. Although private regulation programs have been adopted by other companies in many different industries, we know relatively little regarding the effectiveness of these programs because companies don't disclose information about their efforts and outcomes in regulating labor conditions in their supply chains. The book presents data from companies, multi-stakeholder institutions, and auditing firms in a comprehensive, investigative dive into the world of private voluntary regulation of labor conditions. The picture painted is wholistic and raw, but it considers several ways in which this private voluntary system can be improved to improve the lives of workers in global supply chains.

Causal Complexity

2021 ◽  
pp. 65-74
Author(s):  
Chunyun Li
Keyword(s):  
Supply Chains ◽  
Working Conditions ◽  
Codes Of Conduct ◽  
Global Supply Chains ◽  
Private Regulation ◽  
Institutional Conditions ◽  
Incentive Effects ◽  
Regulation Model ◽  
International Conventions ◽  
Causal Complexity

This chapter examines causal complexity. The determinants of improvement in working conditions in supplier factories in global supply chains are complex. The complexity arises from the interaction between heterogeneous actors (companies, auditing firms, suppliers) following a multiplicity of practices, combined with the effect of local institutional conditions and industry and workplace context. Along with the general lack of transparency in private regulation, this combination of causal factors leads to uncertainty with respect to cause–effect relationships. The central assumption of the private regulation model is that if standards are set by codes of conduct (whether based on international conventions or local laws), and if supplier factories comply with the codes, sweatshop conditions will be avoided and improvements will be made in the lives of workers in global supply chains. But this assumption may not be warranted; buyers and brands may not have the power to force suppliers to compel compliance. And within the businesses of most global buyers and retailers, sourcing may not be sufficiently well integrated with compliance, so the incentive effects of rewarding good factories that are making improvements in compliance are not realized in practice — even though such incentives are the very basis for the model of private regulation of first-tier supplier factories.

Introduction

2021 ◽  
pp. 1-6
Author(s):  
Sarosh Kuruvilla
Keyword(s):  
Supply Chains ◽  
Code Of Conduct ◽  
Labor Standards ◽  
Global Supply Chains ◽  
Corporate Code ◽  
Private Regulation ◽  
Voluntary Regulation ◽  
Labor Practices ◽  
Global Corporations ◽  
Improve Compliance

This introductory chapter provides a background of private regulation of labor standards in global supply chains. Over the past three decades, there has been a plethora of private, voluntary regulatory initiatives with regard to social (labor) and environmental issues. This proliferation has come about in part because of pressure from antiglobalizers calling for global governance, and consumer and activist movements calling for global corporations to be more socially and environmentally responsible. There are many different methods of private voluntary regulation for labor standards, but the most common is the private regulation model. It has three elements: setting of standards regarding labor practices in global supply chains through a corporate code of conduct generally based on the conventions of the International Labour Organization; “auditing” or “social auditing” that involves monitoring whether supplier factories comply with the code of conduct; and incentives for suppliers to improve compliance by linking future sourcing decisions to their compliance records (penalizing or dropping noncompliant suppliers and rewarding more compliant ones). The book looks at the current state and future trajectory of this form of private regulation.

scholarly journals The Influence of London on Labor Markets in Southern England, 1830-1914

1998 ◽  
Vol 22 (3) ◽  
pp. 257-285 ◽  
Author(s):  
George R. Boyer
Keyword(s):  
Nineteenth Century ◽  
Labor Market ◽  
Labor Markets ◽  
Agricultural Labor ◽  
Market Conditions ◽  
Labor Market Conditions ◽  
Southern England ◽  
Wage Rates ◽  
Short Run

Historians have long acknowledged that London, because of its enormous size and rapidly growing demand for labor, acted as a powerful magnet for migrants from throughout southern England. However, while there is a large literature documenting the flow of migrants to London, there have been surprisingly few attempts to determine the consequences of this migration for southern labor markets. This article attempts to redress the imbalance in the literature by examining the influence of London on agricultural labor markets during the nineteenth century. In particular, the article examines the effect of distance from London on wage rates in southern England at various points in time, and the effect of labor market conditions in London on short-run changes in agricultural wage rates.

scholarly journals Fairness and Freight-Handlers: Local Labor Market Conditions and Wage-Fairness Perceptions in a Trucking Firm

ILR Review ◽  
2007 ◽  
Vol 60 (4) ◽  
pp. 477-498 ◽  
Author(s):  
Eric A. Verhoogen ◽  
Stephen V. Burks ◽  
Jeffrey P. Carpenter
Keyword(s):  
Labor Market ◽  
Causal Relationship ◽  
Research Design ◽  
Economic Shocks ◽  
Local Labor Market ◽  
Market Conditions ◽  
Local Conditions ◽  
Labor Market Conditions ◽  
Fairness Perceptions ◽  
Wage Rates

The authors draw on an internal attitude survey conducted yearly from 1996 to 2000 in the freight-handling terminals of a unionized trucking firm to investigate the effect of local labor market conditions on employee wage-fairness perceptions. Their research design exploits the fact that local managers had no discretion to vary wage rates in response to local labor market conditions; local economic shocks thus generated exogenous variation in the attractiveness of the wage paid by the firm relative to employees' options in the outside labor market. The authors find robust associations between the wage-fairness perceptions of employees in the firm and two indicators of local conditions—the rate of unemployment and the wages of similar workers in the outside market. They argue that these correlations reflect a causal relationship: an increase in unemployment or a decrease in outside wages led workers to perceive their wage to be more fair.

Do Voluntary Labour Initiatives Make a Difference for the Conditions of Workers in Global Supply Chains?

2010 ◽  
Vol 52 (5) ◽  
pp. 561-573 ◽  
Author(s):  
Pamela K. Robinson
Keyword(s):  
Supply Chains ◽  
Codes Of Conduct ◽  
Global Supply Chains ◽  
Minimum Standards ◽  
Nation States ◽  
Consumer Markets ◽  
Major Shift ◽  
Buyer Power ◽  
The Uk ◽  
Market Liberalism

Since the mid-1990s a plethora of voluntary labour initiatives has been introduced in global supply chains that serve northern-based consumer markets. The chief aim of these new systems of labour governance is to establish minimum standards and conditions for workers employed in the production of goods for export. This concern for labour follows a period of market liberalism, a major shift in the regulatory position of nation-states and the globalization of business. Voluntary initiatives, which largely draw on the International Labour Organization (ILO) core conventions, include codes of conduct, certifiable standards and International Framework Agreements (IFAs). The article explores the effectiveness of these initiatives in a highly concentrated industry: the banana trade. The banana trade is dominated on the production side by three North American agri-businesses: Chiquita Brands International, Dole Food Company and Fresh Del Monte Produce. Yet these businesses are increasingly being directed by international retailers, particularly in the UK, where the four major supermarket groups command access to the consumer, and comprise Tesco, ASDA (owned by Wal-Mart), J Sainsbury and Wm Morrison Supermarkets. The continuing increase of retail buyer power within global supply chains, coupled with supermarkets’ intent to respond to demands for social responsibility in the chains that serve them, raises the prospect of better conditions for workers. However, the article argues that although some improvements have been made, while supermarkets continue to drive down costs to benefit consumers, workers ultimately pay the price.

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