Working conditions and labor issues remain among the most pressing issues affecting US and European trade policies, as illustrated by renewed, and potentially ineffective, government efforts to block imports that might be produced with forced labor. On April 19, 2021, the Mosbacher Institute for Trade, Economics, and Public Policy at Texas A&M University and the United States office of the International Labor Organization (ILO) addressed those issues in a cohosted, solutions-oriented, online webinar titled “Sustainability in Global Value Chains: Improving Wages and Working Conditions.”
The panel of speakers included Desirée LeClercq, Employment and Labor Law Assistant Professor in the School of Industrial and Labor Relations at Cornell University; Klara Helmbold, a Program Manager for Global Social Sustainability at H&M; and Arianna Rossi, Senior Research and Policy Specialist for the ILO/IFC Better Work Program. Raymond Robertson, Director of the Mosbacher Institute, moderated the event, and Sarah Morgan, ILO-USA Senior Government Relations Officer, gave a welcoming introduction.
The debate surrounding working conditions has taken on a particular focus on global value chains (GVCs) as offshoring and outsourcing production to developing countries have increased. The workshop included dynamic discussions around these pressing issues and how they relate to global trade policies. Possible solutions were discussed, such as labor provisions in trade agreements; the impactful Better Work Program; and private sector initiatives, which have been linked to improvements in working conditions.
LeClercq explained labor provisions within trade agreements, their evolving objectives, and the implications of growing trade sanctions that may also punish foreign workers. She stressed the need for empirical research to better understand the effects well-intentioned policies may have on workers.
Helmbold discussed H&M’s global wage strategy as a way to improve wages in H&M factories within its supply chains. She explained the necessity for brand and firm collaboration in order to be more effective. Although H&M found that wages increase by 5 percent after implementation of certain wage structures in its factories, those same structures must be agreed to by other brands sharing the factory to see real impact in increasing minimum wages.
Rossi explained how the Better Work Program has shown a significant impact in improving labor conditions while also promoting competitiveness. The program covers nine countries, 2,000 factories, and over 2.5 million workers. By using transparency measures to improve compliance with ILO labor standards, the program has seen significant improvements in factory working conditions and enhanced productivity and profitability. She cautioned that for the model to become scalable, it must empower global supply chain actors to use the lessons learned through the program to implement them in their own operations.
During the moderated discussion, Robertson posed several questions from the audience about the shifting role of stakeholders, the challenges of policy enforcement, and shaping incentives for factories. The panelists spoke very clearly about the strengths and limitations of the various approaches and their interest in learning from the others to inform their own work on the topic.
You can view “Sustainability in Global Value Chains: Improving Wages and Working Conditions” on the ILO-USA website.