Worker Rights and the Pricing and Sourcing Squeeze in Global Supply Chains
These quantitative findings are complemented by field research in Bangladesh, which allowed us to explore in detail how declining prices paid by lead firms appear to have contributed to a lowering of the price paid to labor per unit produced and a lowering of supplier factory profit margins. We also found evidence of how short production order lead-times and dramatic fluctuation in contract volumes contributed to chronic overtime, as well as unauthorized outsourcing. This is not to say that all employers are struggling economically, or that all worker rights abuses are the result of lead firm practices. Certainly, there are many employers who have accumulated significant wealth in the sector, and workers’ rights violations are often the result of abusive local employers and state representatives. But the evidence suggests that lead firm pricing and sourcing dynamics are also a very significant contributing factor to worker rights violations.