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Abstract
Workers’ rights violations have been pervasive in many global supply chains. In the apparel sector, production workers often face precarious working conditions, including persistently low pay, excessive and often forced overtime, unsafe buildings, and repression of their right to form unions and bargain collectively. This article explores how purchasing practices of lead firms adversely affect working conditions and workers’ rights in supplier factories. It attributes these trends to a price squeeze and a sourcing squeeze in which lead firms pay increasing lower prices to suppliers while also imposing short lead times and high order volatility. To test this argument, trade data of apparel imports to the United States and the European Union are explored. The article then turns to original surveys of Bangladesh supplier factories and workers carried out in 2016 and 2017. The final section of this paper examines the impact of the squeeze on working conditions and workers’ rights using the Labour Rights Indicators.
Acknowledgments
The author thanks Teri Caraway, Matthew Fischer-Daly and Richard Locke for comments on earlier versions of this paper. The paper also greatly benefited from collaboration and many long discussions on the Bangladesh apparel industry with Jennifer Bair and Jeremy Blasi. Funding for this research was made possible, in part, by a grant from the Embassy of the Kingdom of the Netherlands in Bangladesh, for which the author is extremely grateful.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 The literature also uses the terms ‘global value chains,’ ‘global commodity chains,’ and ‘global production networks,’ and there is considerable debate over the meanings of these terms (Bair, Citation2009). I use the term ‘global supply chains’ as a more neutral term and one that has been adopted by the International Labour Organization. The ILO defines GSCs as, “the cross-border organization of the activities required to produce goods or services and bring them to consumers through inputs and various phases of development, production and delivery” (ILO, Citation2016, p. 1).
2 Jason Zweig, “The Disturbing New Facts about American Capitalism.” The Wall Street Journal, March 3, 2017.
3 Cited in Zweig, “The Disturbing New Facts about American Capitalism.” The Wall Street Journal, March 3, 2017.
4 Neil Irwin, “Are Superstar Firms and Amazon Effects Reshaping the Economy?” The New York Times, August 25, 2018.
5 See Lakhani, Kuruvilla, & Avgar (Citation2013) for how this topology corresponds to employment relations practices.
6 According to World Bank data, China’s 787 million workers account for 22.81% of the world’s worker. See: https://data.worldbank.org/indicator/SL.TLF.TOTL.IN (accessed September 12, 2018).
7 CNBC, “Amazon's 100 million Prime members will help it become the No. 1 apparel retailer in the US.” April 19, 2018. https://www.cnbc.com/2018/04/19/amazon-to-be-the-no-1-apparel-retailer-in-the-us-morgan-stanley.html
8 Laura Stevens and Amrith Ramkumar, “Amazon Hits $1 Trillion Valuation.” The Wall Street Journal, September 4, 2018. See: https://www.wsj.com/articles/amazon-hits-1-trillion-valuation-1536075734?mod=searchresults&page=1&pos=2
9 A shorter, online version of this survey was developed with considerable input from Jeremy Blasi and Jennifer Bair, for which the author is very grateful.
10 See: http://database.dife.gov.bd/.
11 A handful of suppliers completed an online version of the survey, and some of these suppliers did not identify their sub-districts.
12 The sample size yields a confidence level of 90%, with a margin of error of 5.4%.
14 Due to financial and time restraints, this survey was more limited than the supplier survey.
15 For gender, Kabeer, Haq, and Sulaiman (Citation2019) purposively selected their sample to be made up of 66% of women and 33% of men.
16 Center for Global Worker's Rights. (2019). Labour Rights Indicators. Retrieved April 1, 2019, from http://labour-rights-indicators.la.psu.edu/
17 For more information and a full, detailed explanation of the methodology see Kucera & Sari (forthcoming).
19 In 2015, the year the WTO reported USD 26.60 billion in clothing exports from Bangladesh, the World Bank reported USD 34.85 billion in total exports of goods and services from Bangladesh and USD 195.07 billion in GDP.
20 The fourth disaster was the Triangle Shirtwaist factory fire of 1911 in which 146 garment workers in New York City lost their lives.
21 Of course, factory deaths are the most extreme, but not the only indication of unsafe buildings. Data gathered from factory inspections by the Bangladesh Accord indicate that, as of April 2019, the Accord had detected 21,799 structural violations, 46,932 fire safety violations, and 73,239 electrical safety violations in garment factories. The Accord covers 1,688 factories, which indicates that, on average, these garment factories had 84 violations per factory (see Bangladesh Accord, https://bangladeshaccord.org/, accessed April 29, 2019). Unfortunately, these data are not available for the 1990s, and thus do not allow for a comparison across time periods.
22 It may also be conducive to unauthorized sub-contracting, but we were not able to explore this possibility through our structured interview.
23 See: http://www.ilo.org/wcmsp5/groups/public/—ed_norm/—relconf/documents/meetingdocument/wcms_543646.pdf
24 Solidarity Center, Dhaka Office.
26 Observation (CEACR) – adopted 2016, published 106th ILC session (2017) Right to Organize and Collective Bargaining Convention, 1949 (No. 98) – Bangladesh (Ratification: 1972).
27 Ibid.
28 Cited in Leonie Barrie, September 11, 2018. “Overtime Up in Line with Garment Worker Pay in Cambodia.” Just Style.
29 Wall Street Journal, September 4, 2018: https://www.wsj.com/articles/amazon-hits-1-trillion-valuation-1536075734?mod=searchresults&page=1&pos=2
30 Clause 17 of the Bangladesh Transition Accord. The full clause states: “In order to induce factories to comply with upgrade and remediation requirements of the program, participating brands and retailers will negotiate commercial terms with their suppliers which ensure that it is financially feasible for the factories to maintain safe workplaces and comply with upgrade and remediation requirements. Each signatory company may, at its option, use alternative means to ensure factories have the financial capacity to comply with remediation requirements, including but not limited to joint investments, providing loans, accessing donor or government support, through offering business incentives or through paying for renovations directly.” http://bangladeshaccord.org/wp-content/uploads/2018-Accord-full-text.pdf.
31 Ibid.
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Mark Anner
Mark Anner is an Associate Professor of Labor and Employment Relations and Political Science at the Pennsylvania State University. He is the founding director of the Center for Global Workers' Rights and the founding director of the Penn State MPS Program in Labor and Global Workers' Rights, which is part of the Global Labour University network. He holds a Ph.D. in Government from Cornell University and a Master's Degree in Latin American Studies from Stanford University. He has been researching workers' right in the global apparel industry for the past two decades.