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)?
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.
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?
In a nutshell
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.
Take a look at this fascinating article about America’s truly absurd (and growing) addiction to bottled water. As the article notes, in 1976, the average American drank 1.6 gallons of bottled water a year, according to Beverage Marketing Corp. Last year, we each drank 28.3 gallons of bottled water–18 half-liter bottles a month. We drink more bottled water than milk, or coffee, or beer. Only carbonated soft drinks are more popular than bottled water, at 52.9 gallons annually.
There are some interesting new postings on the FLA web site related to the FLA’s Syngenta project. As FLA groupies know, that project relates to the FLA’s unique application of its methodologies used in the apparel industry to agriculture. Several years ago the FLA was asked to address the problem of the use of child labor in the Indian seed supply chain. The FLA commissioned two independent studies to assess the risks and then, based on the result of these studies , developed a new approach to internal and external monitoring of labor standards.
Last month, the FLA held a Stakeholders Forum in the Dominican Republic entitled “After the MFA: Challenges for Promoting and Protecting Workers Rights in a Changing Market Environment.” The broad cross section of individuals who participated helped make this a fascinating and rewarding event. In addition to the general interchange of ideas, the group heard the presentation of a report commissioned by the FLA on the specific implications of these changes for the Dominican Republic. Among those in the audience was DR Vice President Alburquerque. View a summary of the meeting below.