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Last week Play Fair at the Olympics published a new report: “Clearing the Hurdles: Steps to Improving Wages and Working Conditions in the Global Sportswear Industry” which demonstrates that “substantial violations of worker rights are still the norm for workers in the sportswear industry.” In particular

• Wages for sportswear workers are still well below a local living wage.
• In some cases, workers are not even receiving the legal minimum wage, despite working 12-13 hours a day.

This very much echoes the results of Impactt’s report Progress not Perfection which found that workers were not receiving the legal minimum wage at 60% of the factories we visited.

The report critiques the activities of sportswear brands like Nike and adidas on introducing “lean” manufacturing systems as a way of improving wages and reducing working hours.  The problem is that managers are tempted to hang on to increased profits from efficiency gains, rather than handing them over to workers in the form of higher pay.  Purchasers are also keen to get a slice of the cake asking for better prices from more efficient factories.

We at Impactt agree that this is a big problem.  One of our productivity experts in China comments:

“The report tells the truth about lean manufacture.  Even if a factory makes massive improvements in efficiency, it does not guarantee that the managers will share the benefits with workers. Some well-managed factories only pay workers the legal minimum wages, not what we consider to be living wages.  We have some concerns about the outcomes of productivity improvement.  Sometimes it seems we are helping factories get more money through increasing their productivity, but we do not have the power to request managers share the benefits with workers.”  

In the battle to increase wages, productivity improvements are a necessary tool, but they are not alone sufficient to make a difference for workers.  Where workers are able to bargain collectively, workers themselves can speak up for their share of the benefits.  But in the vast majority of the world’s workplaces, workers do not have the power to do this.  Instead, we are forced to rely on the goodwill of management.  But where management is genuinely committed to providing a better deal for workers, productivity measures (together with training better managers and supervisors and the development of routes for workers to express their views) are vital in supporting better wages and reducing working hours.