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Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain
PURPOSE: This paper explores the issue of fairness in global supply chains. Taking the Western European clothing supply chain as a case study, we demonstrate how applying a normative indicator in Social Life Cycle Assessment (SLCA) can contribute academic and practical insights into debates on fairn...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Springer Berlin Heidelberg
2017
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6428394/ https://www.ncbi.nlm.nih.gov/pubmed/30956414 http://dx.doi.org/10.1007/s11367-017-1390-z |
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author | Mair, Simon Druckman, Angela Jackson, Tim |
author_facet | Mair, Simon Druckman, Angela Jackson, Tim |
author_sort | Mair, Simon |
collection | PubMed |
description | PURPOSE: This paper explores the issue of fairness in global supply chains. Taking the Western European clothing supply chain as a case study, we demonstrate how applying a normative indicator in Social Life Cycle Assessment (SLCA) can contribute academic and practical insights into debates on fairness. To do so, we develop a new indicator that addresses some of the limitations of the living wage for SLCA. METHODS: We extend the standard form of living wage available for developing countries to include income tax and social security contributions. We call this extension ‘living labour compensation’. Using publically available data, we estimate net living wages, gross living wages, and living labour compensation rates for Brazil, Russia, India, and China (BRIC) in 2005. We then integrate living labour compensation rates into an input-output framework, which we use to compare living labour compensation and actual labour compensation in the BRIC countries in the Western European clothing supply chain in 2005. RESULTS AND DISCUSSION: We find that in 2005, actual labour compensation in the Western European clothing supply chain was around half of the living labour compensation level, with the greatest difference being in the Agricultural sector. Therefore, we argue that BRIC pay in the Western European clothing supply chain was unfair. Furthermore, our living labour compensation estimates for BRIC in 2005 are ~ 35% higher than standard living wage estimates. Indeed, adding income taxes and employee social security contributions alone increases the living wage by ~ 10%. Consequently, we argue there is a risk that investigations based on living wages are not using a representative measure of fairness from the employee’s perspective and are substantially underestimating the cost of living wages from an employer’s perspective. Finally, we discuss implications for retailers and living wage advocacy groups. CONCLUSIONS: Living labour compensation extends the living wage, maintaining its strengths and addressing key weaknesses. It can be estimated for multiple countries from publically available data and can be applied in an input-output framework. Therefore, it is able to provide a normative assessment of fairness in complex global supply chains. Applying it to the Western European clothing supply chain, we were able to show that pay for workers in Brazil, Russia, India, and China is unfair, and draw substantive conclusions for practice. ELECTRONIC SUPPLEMENTARY MATERIAL: The online version of this article (10.1007/s11367-017-1390-z) contains supplementary material, which is available to authorized users. |
format | Online Article Text |
id | pubmed-6428394 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2017 |
publisher | Springer Berlin Heidelberg |
record_format | MEDLINE/PubMed |
spelling | pubmed-64283942019-04-05 Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain Mair, Simon Druckman, Angela Jackson, Tim Int J Life Cycle Assess Societal Lca PURPOSE: This paper explores the issue of fairness in global supply chains. Taking the Western European clothing supply chain as a case study, we demonstrate how applying a normative indicator in Social Life Cycle Assessment (SLCA) can contribute academic and practical insights into debates on fairness. To do so, we develop a new indicator that addresses some of the limitations of the living wage for SLCA. METHODS: We extend the standard form of living wage available for developing countries to include income tax and social security contributions. We call this extension ‘living labour compensation’. Using publically available data, we estimate net living wages, gross living wages, and living labour compensation rates for Brazil, Russia, India, and China (BRIC) in 2005. We then integrate living labour compensation rates into an input-output framework, which we use to compare living labour compensation and actual labour compensation in the BRIC countries in the Western European clothing supply chain in 2005. RESULTS AND DISCUSSION: We find that in 2005, actual labour compensation in the Western European clothing supply chain was around half of the living labour compensation level, with the greatest difference being in the Agricultural sector. Therefore, we argue that BRIC pay in the Western European clothing supply chain was unfair. Furthermore, our living labour compensation estimates for BRIC in 2005 are ~ 35% higher than standard living wage estimates. Indeed, adding income taxes and employee social security contributions alone increases the living wage by ~ 10%. Consequently, we argue there is a risk that investigations based on living wages are not using a representative measure of fairness from the employee’s perspective and are substantially underestimating the cost of living wages from an employer’s perspective. Finally, we discuss implications for retailers and living wage advocacy groups. CONCLUSIONS: Living labour compensation extends the living wage, maintaining its strengths and addressing key weaknesses. It can be estimated for multiple countries from publically available data and can be applied in an input-output framework. Therefore, it is able to provide a normative assessment of fairness in complex global supply chains. Applying it to the Western European clothing supply chain, we were able to show that pay for workers in Brazil, Russia, India, and China is unfair, and draw substantive conclusions for practice. ELECTRONIC SUPPLEMENTARY MATERIAL: The online version of this article (10.1007/s11367-017-1390-z) contains supplementary material, which is available to authorized users. Springer Berlin Heidelberg 2017-08-30 2018 /pmc/articles/PMC6428394/ /pubmed/30956414 http://dx.doi.org/10.1007/s11367-017-1390-z Text en © The Author(s) 2017 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. |
spellingShingle | Societal Lca Mair, Simon Druckman, Angela Jackson, Tim Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain |
title | Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain |
title_full | Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain |
title_fullStr | Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain |
title_full_unstemmed | Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain |
title_short | Investigating fairness in global supply chains: applying an extension of the living wage to the Western European clothing supply chain |
title_sort | investigating fairness in global supply chains: applying an extension of the living wage to the western european clothing supply chain |
topic | Societal Lca |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6428394/ https://www.ncbi.nlm.nih.gov/pubmed/30956414 http://dx.doi.org/10.1007/s11367-017-1390-z |
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