Extending Labor Standards to Informal Workers at the Base of Global Garment Value Chains: New Institutions in the Labor Market. (original) (raw)

November 11, 2017. Ever since work became splintered and distributed across the globe through highly mobile value chains, a central concern among labor advocates and regulators has been: how and under what conditions can good labor practices and safe working conditions be extended to the most vulnerable workers in lower tiers of global value chains? These spaces at the base of global supply chains are often hidden from view by layers of opaque, contingent and exploitative contractual ties that create new informalities at the bottom of even the most formalized production networks. A wave of recent industrial accidents—factory fires and building collapses—many of them in the garment districts of Bangladesh (e.g., Tazreen, Rana Plaza, but also elsewhere), has focused fresh attention on this dilemma. On the one hand, after more than twenty years of experimentation with private voluntary forms of regulation that emerged in the mid-1990s in the wake of anti-sweatshop movements in the US and later Europe, there is widespread agreement today that company codes of conduct and their elaborate monitoring systems, though important, are generally unable to reach beyond the top tiers of global supply chains. Private systems have evolved from the auditing-policing model of the late 1990s-early 2000s, to the more consultative and collaborative model of global partnerships and multi-stakeholder engagement of the last fifteen years (ETI, SAI, Better Work, FLA, WRC, The Alliance and the Accord). Despite these efforts there has been limited success in enforcing labor protections in lower tiers of global chains, let alone beyond them. One global trade unionist associated with a multi-stakeholder initiative went so far as to say that the CSR business had done little more than generate a " $60 billion industry… Imagine what could have happened if those funds had gone to the workers, we wouldn't still be trying to define what a living wage should look like. " 1 At the same time, it is also true that without any private regulation there would be many more Tazreens or Rana Plazas. Therein lies the dilemma for the world of private governance: how to ensure a wider socialization of safe and improved working conditions that can reach further and deeper down the value chain, and even beyond it, in the face of intensified competition, short lead times, low margins, relentless price pressures and the powerful search for low costs. On the other hand, and despite important advances, national and sub-national governments have also found it equally challenging to enforce or scale up the extension of formal protections and labor laws to the many tiers of informal work associated with both export and domestic production. Indeed, many countries are caught within dualistic debates about the effects of labor market regulation. Do regulations add to labor market rigidity, and thus " cost jobs " , or does undermining labor welfare undermine long term growth of productivity and hence employment? The outcomes of these debates, which turn upon the notion that low factor costs act as a draw for 1 Interview, LB, 2011.