WUNRN
A LIVING WAGE – GLOBAL SUPPLY CHAINS – NARROW THE
INEQUALITY GAP, BREAK THE CYCLE OF POVERTY, FOR WOMEN & GIRLS
Sweatshop in China – Women & Girls
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Bangladesh’s
vast garment industry, safety questioned, produces clothers for top Western
companies.
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What would it take to deliver a living wage in supply
chains?
By Rachel Wilshaw
Ethical Trade Manager - 10 Dec 2014
The concept of a living wage is not
something new, but with recent reports warning of the lag between wages and
productivity and outlining the failures in trickle down economics, it is in the
spotlight. On Human Rights Day, Rachel Wilshaw
talks about what has been done and what more companies can do to ensure that a
living wage is paid.
Almost every day this week fresh evidence
has been presented of the corrosive effect of growing inequality on society and
the economy. On Friday the ILO published a global wage
report warning of wages lagging behind productivity in many
countries. On Monday the Archbishop of
Canterbury expressed concern about hunger in the UK, linked to low
wages and a weakened safety net. On Tuesday an OECD report
discredited 'trickle down economics' and said inequality is holding back
economic growth. This week a bill on modern
slavery is being debated in the British parliament, while Anti Slavery
International marks 175 years of campaigning and laments that its
work remains so much in need.
Companies often talk about the number of
jobs they create, but these are usually measured by quantity, not
quality.
These communications echo Oxfam's own
analysis in our report Even It Up: Time
to End Extreme Inequality. This reported that, amongst other
things, ordinary workers are taking home an ever-dwindling slice of the
economic pie, as a declining share of GDP goes to labour and ever more goes to
investors and executives.
Companies
often talk proudly about the number of jobs their businesses create, but these
are usually measured in quantity rather than quality. With the UN Framework on
Business and Human Rights raising the bar for corporate
responsibility, it is time for companies to take a hard look at the number of
unacceptably 'low road' jobs in their supply chain, and what it would take to
move them to the 'higher road' end of the Work Spectrum.
Based on my
experience as Oxfam's Ethical Trade Manager, there are THREE drivers of poverty
wages:
1.
Unfair share
of value in the chain: Companies
are pushing their costs and risk onto the most vulnerable people. Recent Oxfam
reports found poverty wages being paid by businesses in Malawi, Vietnam and
Kenya that were supplying some of the UK's most successful companies. We
calculated that Kenyan flower
workers' wages could be doubled if just 5 pence was added to a £4 bunch of
roses.
2.
Absence of
collective bargaining: In Denmark,
an employee flipping burgers for Burger King gets $20 an hour, based on a
collective bargaining agreement; a US employee in the same company but denied this
bargaining opportunity gets just $8.90. Something like 90% of
workers in food and garment supply chains cannot negotiate terms with their
employers.
3.
Inadequate
minimum wages: The minimum wage for banana workers in the
Dominican Republic is just 40% of a living wage; for Bangladesh it is nearer
20%.
These factors taken together create an
almost perfect recipe for growing inequality. The average income of CEOs in the
UK's top 100 companies has nearly doubled in ten years, while many workers have
seen wages decline in real terms. This is unfair and unsustainable.
How does the growing disconnect between
wealth at the top and bottom of supply chains fit with companies' values?
What are the forces driving companies
forward to address low wages, both the narrow financial business case and the
broader one of regaining society's trust?
What are other companies doing in this
area, and what has been learnt from the steps they have taken? What hinders
further progress?
Today, Oxfam publishes Steps towards a
living wage in global supply chains. This issue briefing attempts to
answer these questions. We look at what's driving the problem and give credit
to companies which are taking steps in the right direction. But though these
are all welcome, we also go into why we believe more systemic change is needed,
so that governments set minimum wages that people can genuinely live on,
workers can negotiate the terms of their employment, and employers have the
know-how and commercial flexibility to provide better jobs.
We hope that the briefing helps companies
get it right on this challenging issue, described by the head of the Business and Human Rights Resource Centre
as 'one of the most powerful tools for business to contribute to their workers'
human rights.'