Posted on 05/07/2023 10:46:55 AM PDT by devane617
Want to make a positive difference in the wage conditions of developing country factory workers churning out products for multinational firms?
Paying them more seems an obvious first step. But research looking at the experience of clothing retailer H&M Group suggests a less direct approach—by intervening at the management practice level—can empower workers and significantly raise wages in sustainable ways, multiplying the impact of the company's investment many times over.
In 2013, following activist pressure for reform, H&M went to its suppliers and asked them to voluntarily implement two programs designed to raise workers' pay. A workplace dialogue program promoted workers' awareness of their rights and formal opportunities for communication between management and workers or their labor representatives.
A separate wage management system included the creation of clear and transparent pay grids aimed at fairly compensating workers based on their education, experience, skills and performance. H&M also implemented standardized systems to measure and track workers' wages.
Across some 1,800 factories in nine countries, almost all in Asia, wages went up an average of five percent by the third year of implementation. This represented about $44 U.S. per worker annually, compared to H&M's investment in the initiative of $4.57 million—or $1.62 per worker.
"A separate wage management system included the creation of clear and transparent pay grids aimed at fairly compensating workers based on their education, experience, skills and performance. H&M also implemented standardized systems to measure and track workers' wages."
“Want to make a positive difference in the wage conditions of developing country factory workers churning out products for multinational firms?”
No.
When I see the words ‘empower’, ‘sustainable’, ‘awareness’, and ‘rights’ within the first several paragraphs, I stop reading.
The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009.
https://www.dol.gov/general/topic/wages/minimumwage
Try this:
Raising the minimum wage does nothing in the long run because raising the minimum wage causes compression where those who worked and got raises and are earning more find themselves either back earning the minimum or closer to it again. So they want raises and it cascades up the wage scale where everyone wants a raise.
As wages rise, the price of goods and services rise because costs have increased. Businesses determine prices on a profit margin which is a percentage. The profit is the businesses wage and they want a raise too since all the others are now getting raises.
If the cost of labor is $10,000 / week and the minimum wage and other wage raises causes the cost of labor to go to $15,000 / week ($10/hr raised to $15/hr average) and the profit margin in a simple markup basis which is simpler to understand is 30% (most businesses use a markdown basis which would actually result in higher prices). We will say the cost of materials stays the same. It won’t because all the suppliers’ labor costs are going up too so they will raise prices too. But for simplicity, we’ll make that assumption. So materials is $10,000 and labor was $10,000 for total cost of $20,000. Adding the profit margin we add 30% of $20,000 to the costs and come up with $26,000 for the price of what the business produces.
Now labor has gone to $15,000 which is an increase of $5000. But the price does not rise by just $5000. The new price is ($10,000 + $15,000) × 1.3 (to add 30% to total costs) which equals $32,500. That means the price of the goods produce raised by $$6,500.
Get it?
Raising the minimum wage hurts in the long run. It is a never ending cycle where the guy on the bottom gets less and less.
Back in 2007-8ish Netflix had a video on this. I think about the IMF and smaller countries becoming slaves to it. One thing they were pushing was a global minimum wage. There was good information and alarming information. I’ve got to figure out what it was and look at it again.
Empower your nation to sustain sovereignty by awareness of where the stuff you buy is made. Make sure you exercise your right to buy American for America First.
The official minimum wage has been effectively been repealed by reality.
Businesses are having trouble finding workers at $15/hour, forget about $7.25/hour. No one can afford to live at those wages.
Government spending too much is the cause of inflation not workers demanding enough money to live a very basic lifestyle.
Okay, you got me. I read your entire post. 😁
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