I recently spent a week traveling around China and spending time in factories and government offices talking to people about the much publicized labor contract law, which came into effect on January 1, 2008. Readers will recall that this law was two years in the making and was published for comment in 2006. Over 190,000 submissions were received from the public, including loud objections from prominent U.S. organizations. The law was finally adopted in mid-2007 amidst the public outcry that followed media reports of the use of child slaves in brick kilns.
In a nutshell
It has become very fashionable to criticize Codes of Conduct and monitoring, and to hold them responsible for all sorts of unpleasant realities in workplace conditions – from sub-minimum wages to excessive overtime. At one level, such criticisms fail to recognize that wage and hour issues predate the wave of codes and monitoring that arose in the mid-1990s. In fact, codes were a reaction to such basic labor law violations.
Many companies have internal audit teams that are truly dedicated to making human and labor rights a reality in their global supply chains, often by working with local civil society groups. So why are there still so many factories that do not pay the hourly minimum wage and work 60, 70 or more hours per week? The first reason is that they operate in jurisdictions where there is no culture of compliance. None of their competitors is paying the hourly minimum wage or sticking to the legal limits on working hours, so why should they?
China has been through 30 years of unbridled growth based on its low-cost labor market structure. During this period, the state’s priority was employment creation. The laws and regulations issued were intended to support the low value-added processing industries that were flourishing at the time, but they were poorly enforced and created an unstable labor supply.
Many countries have adopted plans designed to help their economies recover from the global financial crisis. Unfortunately, those have mostly concentrated on saving banks and companies on the one hand, and on stimulating consumption on the other. Amazingly, there has been relatively little emphasis on the labor market policies needed to save jobs and protect wages. One wonders who is meant to do all the consuming if unemployment keeps rising and wages keep falling (at least in real terms)?
Authored by Marsha Dickson, PhD
How many young fashion designers graduate and take their first jobs having had the opportunity to visit an apparel factory? As a professor of fashion and apparel studies involved with several different design programs over the last two decades, my educated guess is that “virtually none” have had this experience. This number is even smaller when asked if the apparel factory is in one of the developing countries where over 95% of clothing sold in the United States is manufactured.
This post was originally a contribution to the Institute for Human Rights and Business of which I am a member of it’s international advisory board. For more info on IHRB’s work please visit www.institutehrb.org.
The global economic crisis has shaken the manufacturing industry to its core over the last couple of years, and the impact on workers has been palpable around the world.