Nice Work? Are workers taking the strain in the economic downturn?


Read the full PDF report here: Nice work? Are workers taking the strain in the economic downturn?

Impactt has launched an update of our prevalence data of labour standards issues from 2006 – 2012.

Based on a data set of 678 production sites and 17,500 workers in the apparel, electronics, toys, homewares and food industries, our report highlights how workers continue to pay the price of the global financial crisis. The level of worker exploitation has increased over the last 6 years with people working harder, for wages which can buy them less of what they need, without the ability to bargain for more.

According to our report:

  • Employers around the world report difficulty in attracting and retaining skilled workers. Average labour turnover levels are 7 – 10% in China, 12% in Bangladesh & 15% in India.
  • Rather than incentivising workers to stay, many businesses are still focusing on finding ways to force workers to remain. We found forced labour practices at 33% of sites visited in 2012.
  • Workers continue to have poor access to effective trade unions, with workers at 91% of sites saying that they do not have access to fully effective worker representation mechanisms.
  • The percentage of sites where workers work more than 60 hours per week remains high at 85%.
  • We are seeing improved compliance in paying the legal minimum wage (78% of sites paid local legal minimum wages in 2012; compared to 16% in 2006). However, the gap between workers’ actual wages and the amount needed to support a household continues to widen globally.

Our data raises four key questions for stakeholders in global value chains:

  • As alternative employment opportunities appear in many economies, working in offices, service-sector jobs, in ‘clean’ electronics factories rather than in ‘dirty’ garment factories, how long will skilled workers be prepared to continue working to service the markets of the West?
  • Where many of these jobs are held by migrants, will alternatives open up for these people to move up and out of manufacturing and take up jobs closer to home?
  • As workers become more demanding in terms of job quality, skilled labour becomes scarcer, costs continue to rise and buyers’ technical specifications become more demanding, how can manufacturers continue to service Western brands and retailers?
  • How can retailers and brands in the West maintain their access to product when new markets are opening up in Russia, across Asia and in the Middle East with buyers who are less demanding?

It is clear that no single actor can create change at the required scale alone. Our report provides recommendations for employers, brands & retailers, consumers, trade unions and governments to improve workers’ welfare & livelihoods through trade and ensure the future sustainability of our supply chains.

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