Corporate Social Responsibility and Wages in the Global Apparel Supply Chain

Abstract

Through corporate codes of conduct, apparel companies seek to ensure that basic labor rights and standards are upheld in their global supply chains. Wages, a key subject in corporate codes, have received less attention in part due to the difficulty of accessing firm-level wage data from suppliers. In this paper, we analyze longitudinal wage data from a global auditing company and cross-sectional wage data from a global retailer's supply chain to evaluate whether wages paid to supply chain workers in six major apparel production countries have been sufficient. We find that workers in these countries received wages higher than the legal minimum but substantially below living wage estimates. We also test a long-held assumption that wages are likely to increase in the presence of stronger exercise of workers' associational rights. We find that suppliers are likely to pay higher wages relative to the legal minimum in countries with greater institutional support for freedom of association and collective bargaining.