Beyond Minimum Wages in Corporate Codes of Conduct
Corporate codes of conduct that only commit companies to pay minimum or market wages to their workers have proven– in most key sourcing countries– insufficient in the task of ensuring workers are fairly compensated. To do their share, global brands must commit to a higher standard than just paying minimum wages.
This report was featured as a chapter in “GLOBAL WAGE DEBATES: POLITICS OR ECONOMICS?” a joint report co-authored by the global partners of JustJobs Network.
Around the globe, debates over the minimum wage continue in many countries where global brands buy and make their products.
In Myanmar, the garment employers’ association argues for keeping garment workers’ wages lower than the other industries, ostensibly to spur investment in the country. In Haiti, workers and companies debate the disparity between the legal minimum daily rate and legal minimum piece rate. And in some countries disagreements over minimum wage levels can be so intense they result in mass demonstrations and—as in Cambodia in 2014—violent suppression of wage protests.
Despite these serious debates, workers find that even when a minimum wage is adopted – or its level increased – they often remain unable to afford a basic standard of living. Minimum wages in many countries are simply too low, or government enforcement is lax.
For this reason, corporate codes of conduct that only commit companies to pay minimum or market wages to their workers have proven—in most key sourcing countries—insufficient in the task of ensuring workers are fairly compensated. To do their share, global brands must commit to a higher standard than just paying minimum wages.
The companies that affiliate with the Fair Labor Association (FLA) and similarly designed initiatives have accepted this higher standard, and in February 2015 the FLA launched its Fair Compensation Work Plan – a strategy for buyers, suppliers, and unions to move companies toward meeting their Code of Conduct obligations on fair compensation, and for the FLA to hold them accountable for measurable progress.
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