Academic journal

Wages trump safety standards for global garment workers

According to a new study from the ILR School to be published in the British Journal of Industrial Reports.

More than two decades ago, after attention was drawn to sweatshop conditions in supplier factories, multinational apparel and fashion companies adopted codes of conduct regarding labor rights. labor and working conditions for their factories in the supply chain. Critics have suggested that apparel companies instituted this system – commonly referred to as private regulation – primarily to gain legitimacy in their home markets.

But according to Sarosh Kuruvilla, Andrew J. Nathanson Family Professor of Industrial and Labor Relations, factory workers rate their working conditions differently.

“These companies want to portray themselves as good, responsible global citizens,” Kuruvilla said. “One of the main motivations is that they want to look good in front of their customers. So supplier factories are being told by their global buyers that they have to follow all these rights and standards embodied in the codes, including payment of ‘a wage that allows workers to live decently. However, global buyers do not necessarily pay a higher price for their product at the factory. So the factory is in a hurry.

This pressure forces factory owners to cut as many corners as possible to survive, he said. The resulting poor working conditions result in considerable turnover – up to 50% per year in some regions. In his new article, “Corporate Codes of Conduct and Labor Turnover in Global Apparel Supply Chains,” published August 27 in the British Journal of Industrial Relations, Kuruvilla finds that the main reason for turnover comes from wage and benefits violations.

For the study, Kuruvilla and his co-author, Chunyun Li of the London School of Economics and Political Science, secured supply chain data from a multinational company, dubbed Pangia, and compared code violations and turnover rates at 622 factories in 28 countries.

“Only wages matter,” Kuruvilla said. “The workers are ready to face all sorts of other hardships – not having air conditioning, being exposed to dangerous chemicals – they won’t leave the factory for that. But promises made by the company that its suppliers would pay workers a living wage – enough to meet basic needs and provide discretionary income – have not materialized.

Kuruvilla, whose 2021 book examines the effectiveness of corporate social responsibility programs on improving labor standards in global supply chains, said the new research will inform the rules being developed under of two new European Union laws, which will now impose what was previously private voluntary regulation and hold companies accountable for the effects of their environmental and social policies on their supply chains. The first law, known as the Mandatory Due Diligence Act, will also allow aggrieved supply chain workers to sue European companies in European courts.

“My research is the first, and indeed the only, to examine worker turnover rates in the global low-cost apparel supply chain,” Kuruvilla said. “The study’s finding underscores the importance of paying higher wages and holding companies accountable to their promises to pay a living wage in their supply chain factories.”

Kuruvilla, the academic director of the Global Labor Institute, is consulting with some European governments as they consolidate how these laws will be implemented.

Julie Greco is a senior communication specialist at the ILR School.