Ensuring Decent Work

Abstract

Introduction

Decent work is the focus of Sustainable Development Goal (SDG) #8. Arguably attainment of SDG #8 is challenged by the nonstandardization of the concept's definition as well as oversight with respect to enforceability, given that often the regulatory relationship to workers' rights is negatively correlated with a country's development status. For many developing countries, trade is central to economic growth, which is measured by gross domestic product (GDP). Though the measure is problematic given shortcomings related to the GDP metric and sustainability, further issues exist. Evidence suggests that trade-led growth obscures the relationship between a government and its people, rationally trading off the welfare of a demographic for the aggregate growth rate of the whole. In a developed country, the issue of decent work is similarly positioned as it is the most vulnerable, either due to migration status, skill level, or discriminatory practices that appear to be less protected. In both the developed and developing country scenarios, the power dynamic, level of enfranchisement, and the participatory nature of government define the domestic means for workers' rights; however, in most cases, cultural and socioeconomic factors that affect participatory behavior are exacerbating factors.

Given that the SDGs are global goals whose implementation is largely left to individual countries, there is a domestic dynamic with respect to the attainment of the goals within any nation. In the discussion of decent work, this involves domestic regulatory intervention and promotion of equity, living wages, and elimination of gender wage disparity alongside safe working conditions. However, an overlap between countries with respect to decent work occurs in trade. An evaluation of trade and trade agreements also highlights another central element of the SDGs—gender equality. The following discussion highlights the specific issues related to decent work that are attributed to corporate social responsibility, trade, and the disproportionate representation of women in occupational roles where the provision of decent working environments is characterized as limiting comparative advantage.

Decent Work and Corporate Social Responsibility

Corporate social responsibility (CSR) is the vaguely defined term for the broad concept of business conduct that aligns with social expectations of integrity, transparency, fairness, and generally accepted social values (Hollerer, 2012). Events, such as the 2012 Ali garment factory fire in Karachi, Pakistan, that killed 300 workers and the massive collapse of Bangladesh's Rana Plaza factory in May 2013 that killed more than 1,100 workers, “sparked renewed concerns about the lack of national labor regulations and the inadequacy of existing private social auditing schemes that seek to ensure a basic level of safety and decent work conditions for laborers in export-oriented industries located in developing countries” (Lund-Thomsen & Lindgreen, 2014, p. 11). Further, these tragedies, given that they occurred within the supply chain of multinational corporations, catalyzed end consumer activism, resulting in a push for greater transparency and ethical conduct across the production-to-consumption cycle.

In these circumstances, consumer behavior prompted interest in CSR to include a broader goals strategy (Weyzig, 2009). This form of CSR “emphasizes goals beyond increasing a firm's net present value” and involves corporate partnerships with nongovernmental organizations (NGOs) and civil society organizations as well as bottom-of-the-pyramid initiatives (Weyzig, 2009). In this context, CSR implies an active contribution of business to sustainable development and poverty reduction. However, evidence suggests that the goals and cooperative nature of this strategy have a significant Global North bias. “Northern-based consultants, academics, and NGOs have dominated the defining and implementation of cooperation” between developed and developing countries, while “the voices of developing country suppliers have remained largely silent” (Lund-Thomsen, 2014, p. 17).

To the extent that international buyers still command the most rents in the value chain, through their control of design, branding, market and distribution of consumer products and services, shifting to a cooperation paradigm is unlikely to increase supplier incomes substantially enough to sustain improvements in work conditions and living standards. (Lund-Thomsen, 2014, p. 18)

Though seemingly at odds with the prevailing neoliberal perspective of CSR in which companies operate under the assumption that their value is solely found in maximizing profitability (Weyzig, 2009), from this perspective, CSR programs implementing a broader goals philosophy are, in practice, aligned with the profit motivations of neoliberalism. In this respect, consumer brand loyalty and premium are most often associated with CSR interest in the equality and equity attributions to the supply chain. As Utting (2007) notes:

The CSR agenda … has broadened to embrace labor rights and other human rights. Progress in terms of realizing rights, however, lags well behind the rhetoric. Aspects related to empowerment remain weak, while redistribution still figures only marginally on the CSR radar. (p. 709)

Going forward, the role of CSR in promoting equality and equity within labor markets may be significant if CSR can be formalized to include contribution metrics that identify social justice and environmental justice parameters (Gugler & Shi, 2009). Hughes and Haworth (2011) point out that the vulnerability of the poor is often exacerbated by underfunded and dysfunctional national policy frameworks and as a result, engagement with worker and employer organizations as well as ministries has become an important precondition for the implementation of poverty reduction strategies (Hughes & Haworth, 2011).

Newell and Frynas (2007) propose that CSR has a dual purpose: CSR can be both a business tool with a focus on output and also a development tool. Successful implementation of the latter requires attention to the process of CSR to include the needs of the labor force, as well as an embeddedness of CSR within a corporation's operations (Hah & Freeman, 2014.

Gender issues in many ways exemplify some of problems associated with current CSR approaches. At the design stage, the neglect of gender issues often means codes of conduct fail to address the unique needs of women workers, as research on Africa and Central America clearly shows. (Newell & Frynas, 2007, p. 676)

At present CSR remains a potential channel for promotion of attributions of decent work as defined by working conditions, gender equality, and wage growth as well as environmental protection. The actualization related to these parameters, however, is tied to the brand proposition of CSR as it relates to the values of end consumers as well as financial market investors. As information asymmetries between production and consumption impacts continue to decline with increased transparency, arguably, there will be a significant opportunity for CSR to promote decent work if indeed social justice and environmental justice are elements of end purchaser decision making (Öberseder et al, 2014; Sen & Bhattacharya, 2001). The causality between CSR and social and environmental outcomes in trading partners still requires further assessment to determine the relationship between CSR outcomes and the expectations and demands of end product consumers (Kitzmueller & Shimshack, 2012).

Decent Work, Trade, and Gender Equality

Trade is often addressed through a neoliberal lens that assumes the benefits embraced in economic theory are fully realizable. Basically, the perspective is that trade allows a country the opportunity to benefit from production and specialization in products and services whereby a distinct efficiency advantage may result in above average production returns relative to other countries' production of the same goods and services. Replicated across trading entities on a global-scale, each having a different production advantage, there is essentially more available for all with no greater resource utilization, given the caveat of specialization based on efficiency (Nelson, 2005; Ushie et al., 2013).

However, the theory is a simplification that does not incorporate: the costs and potential for exploitation; the rationale for prevailing cultural norms—including the prevailing perception of gender roles and their influence on educational, employment, and enfranchisement access; informational asymmetries; the significance of unpaid work; and the most significant to the discussion of sustainability, the adverse impact to ecosystems when production specialization results in environmental degradation, habitat destruction, and loss of species diversification (Perkins, 1997). These holistic elements can be characterized as unrecognized trade distortions that impact efficiency gains between trading partners. Unfortunately, the measure of the benefit from trade, GDP, which albeit is founded on the market value of trade, reduces the assessment to a simple quantitative measure that may further exacerbate the inequalities between trading parties (Agarwal et al, 2003; Beneria, 2003; Nelson, 1996; Nelson, 2004). In large part, this result is due to the focus on the macroeconomic landscape without balance incorporated on the activities impacting the microeconomic environment where disparities are more obvious. Given the disparity between the macro and micro outcomes, economists have strongly suggested that “neoliberal thinking does need to be challenged on the a priori grounds that it, in fact, lacks any actual intellectual validity” (Nelson, 2005, p. 58).

Inequities that may exist in a given society due to social norms and accepted practices as well as expectations can further distort the internal transmission of benefits from participation in trade on a national level. This can be specifically identified with respect to gender. On a global scale, which is magnified in countries characterized as the Global South, women are disproportionately represented as living in poverty. Due in large part to cultural and institutional barriers specific to both educational access and employment opportunities, women represent a labor class that can be easily exploited. The lack of skills, size of their population, and need on the part of women to provide financially for their families makes them vulnerable to insecure employment conditions and exploitation. Further, in many countries women are limited and even barred from participation in collective action or labor unions as a result of information asymmetry, fear, and potential threat of job loss. Simply stated without a union or representative body to lobby for their interests, women as a group are weakly positioned, given a lack of bargaining power emanating from their domestically discriminated status (Kohler, 2010).

Kabeer (2003) highlights yet another issue related to trade. She notes that theoretical comparative advantage, which underpins neoliberal trade, is in reality unfair advantage in practice. In her research, which came out of a larger research study (Jenkins, 2005), she states that trade has allowed for a relocation of the low-value-added stages of labor intensive manufacturing away from the highly paid and organized labor in the Global North to the poorer, low-wage, labor surplus economies of the Global South, bringing workers, often women workers, in geographically dispersed and economically differentiated locations into direct competition with each other. In other words, not only does trade not create a trickle-down equity impact to all workers, given that it centers on highly competitive unskilled products, it creates competition between countries resulting in a downward spiral in the wages of the most vulnerable, who often are disproportionately women. Given the observable outcomes, there has been increased lobbying in trade discourse for social clause parameters to be adapted to protect the most vulnerable, specifically women. Progressive academics have supported the enforcement of global labor standards on grounds focused on social equity, particularly for women (Cagatay, 1996; Hensman, 2000; Ross, 1997).

From the neoclassical economics perspective, free trade leads to increasing competitive pressures, which should make it more expensive for individuals and firms to discriminate based on gender (Becker, 1971). In other words, discrimination against female workers should diminish over time with increased competition.

In addition, progress in trade openness and integration would be expected to expand job opportunities, with an increasing number of women being absorbed in export-oriented industries (Ozler, 2000). Further, the Heckscher-Ohlin model of trade predicts that factory prices will be equalized among countries that trade, reflecting the idea that trade liberalization will prompt a narrowing in the gender-based wage differential. According to this theory, countries abundant in unskilled labor tend to specialize in unskilled labor-intensive exports. Thus, demand for lower-skilled labor will rise and the wages of unskilled labor will therefore increase relative to skilled labor. Given that due to prevailing cultural norms, women in developing countries are more often employed in lower-wage and lower-skilled jobs than men, in theory, trade centered on unskilled labor as a competitive advantage would increase their wages and reduce the gender wage gap.

Gender outcomes are very context-specific, depending both on initial conditions and on public policies (Cagatay, 1996). Korinek (2005) insists that the gender outcomes of trade are also different in the short term (increased vulnerability of female employment) and long term (improved gender parity). Most interestingly, Safa (2018) underlines that an increase in employment does not necessarily mean an increase in well-being.

The literature (e.g., Cagatay, 1996; Ozler, 2000) concludes that globalization has resulted in the feminization of labor. However, the participation of women is focused on selected sectors. This is particularly visible in the textile sector (Cagatay, 1996) and in agriculture (Ventura-Dias, 2010).

Decent Work and the Gender Wage Gap

Women's employment has increased as the result of globalization (International Labour Organization, 2015b; Korinek, 2005 van Staveren, 2007). However, female employment is different in many aspects from male employment. On the demand side, these differences are in the labor market and concern the type of jobs women are more likely to be offered and the sectors that have a large share of female employment. Given their culturally affirmed gender roles, women are more likely to choose and to accept lower-paid jobs that are more “flexible” or precarious (including part-time, etc.) (International Labour Organization, 2015b).

There is no theoretical consensus about the effects of international trade on the gender differential in wages; trade liberalization may have a widening as well as narrowing effect on the gender wage gap. A large body of empirical literature concludes that following globalization, the overall wage gap is decreasing (Korinek, 2005). This conclusion is controversial and methodological debate is ongoing (van Staveren, 2007). Simplified, these theories see women's lower wages as a source of comparative advantage, which, they argue, evens out over time.

However, trade liberalization may also worsen the gender wage gap. In a more integrated (but also more competitive) world economy, export-oriented firms usually compete on cost reduction and therefore use the wage differential as a competitive tool. From this perspective, the bargaining power of unskilled workers will not increase, while that of skilled workers will rise. In many developing countries men have, on average, higher levels of education and labor skills than women, which generally leads to a widening of the gender wage gap.

Empirical research on the impact of trade on the gender wage gap uses mostly country-level data, and results are mixed. Some studies support the idea that trade openness reduces gender wage discrimination (Artecona & Cunningham, 2002; Juhn et al., 2013). A cross-country study (Oostendorp, 2009) argues that trade liberalization is associated with narrowing gender wage gaps (at least in richer countries). Fontana and Wood (2000) find that trade liberalization in Bangladesh narrowed the gender wage gap with an increase in female-intensive manufactured exports such as clothing. In examining the change in the gender wage gap in the manufacturing sector in Mexico over the trade liberalization period (1987-1993), Artecona and Cunningham (2002) found that trade liberalization led to a decrease in wage discrimination, and that the gender gap decreased more in industries that had been more affected by trade than in other industries. These findings support Becker's (1971) theory of discrimination according to which firms that are competitive are limited by the market from wage discrimination.

Other studies, however, argue that trade liberalization increases the gender gap. A study by Berik et al. (2004) of the impact of competition from international trade on the gender wage gap in Taiwan and South Korea between 1980 and 1999 shows that greater international competition in concentrated sectors is associated with larger gender wage gaps attributed to wage discrimination against women. Similar findings by Menon and Rodgers (2009) for India over the 1983 to 2004 period show how increasing competitive forces from India's trade liberalization affected women's relative wages and employment. Contrary to the neoclassical theory, their results suggest that increasing openness to trade is associated with larger wage gaps in India's concentrated manufacturing industries. Korinek (2005) and Higgins (2012) also found that trade leads to the increase of inequalities or polarization.

High-skilled female workers are likely to benefit from trade, and for this type of worker the gender wage gap narrows; however, low-skilled workers experience a widening wage gap and deterioration of their working conditions. It is important to emphasize that women are more likely to be low-skilled workers; they are also likely to be replaced by men when the job type changes, and more skill is required in competitive industries (Ozler, 2000). This is partially confirmed by a cross-country study by Oostendorp (2009) which investigated the impact of international trade openness on the gender wage gap for more than 80 countries from 1983 to 1999. The results of the study suggest that trade is associated in richer countries with narrowing gender wage gaps. However, it found little evidence that trade also reduces the occupational gender wage gap in poorer countries. Similarly, Chamarbagwala (2006) notes that international trade in India's manufacturing sector benefited skilled men but hurt skilled women.

A more recent study by Juhn et al. (2013) suggests that trade openness increases female employment in blue-collar positions in Mexico. However, there was no evidence that trade liberalization improves relative outcomes of women in white-collar occupations. Vijaya (2003) insists that the existence of low-skilled jobs in export-led sectors for women can become a trap, as women will be pushed into this employment and unmotivated to increase their skills to find a better opportunity. This is consistent with the evidence and recommendations described by Bhattacharya & Rahman (1999) for the case of Bangladesh.

As a result of the issues outlined, and in response to both a protectionist stance on the part of developed countries as well as an interest to comply, albeit perhaps superficially, with the SDGs, trade agreements are increasingly taking a proactive position with respect to acknowledgement and representation of the SDGs. This is taking place within their frameworks and is particularly noticeable in agreements between developed and developing countries. However, given the focus on GDP growth and pre-existing infrastructure and social inequities, it is too soon to tell if trade agreements will catalyze domestic policy aligned to decent work as proxied by wages.

Additionally, there is room for concern with a less discussed issue. Trade agreements and development in general foster a Western-centric perspective on cultural norms of social stratification, gender roles, and economics; specific to the economic framework, trade may be promoting a single perception of standard of living and gender equality. Further, by focusing on income-based metrics related to decent work, the cost of employment in terms of women's roles in unpaid work may be obscured, leading to a net gain that may be significantly lower than income increases may depict.

Decent Work and Poverty Alleviation

The key to the relationship between decent work and poverty alleviation has often been simplified to an increase in income. However, there is a complexity to the nature of poverty that income does not fully capture (Bavier, 2008; Kaplow, 2008; Pritchett, 2006, Ringen, 1985; Subramanian, 2011). This is referenced by the International Labour Organization (2015a) specific to its current mandate: “The primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity” (p. 1), as well as, by the United Nations (n.d.): the manifestations of poverty “include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion as well as the lack of participation in decision making.” Poverty is multidimensional and much more complex than the threshold income measure of $1.90 a day (United Nations Development Programme, 2019). Additionally, poverty is not equally pervasive; there is direct evidence that some social groups bear a disproportionate burden of poverty (United Nations, n.d.).

Lötter (2011) positions poverty as a moral issue, stating that “poverty is an inhuman condition that we have a moral obligation to root out completely” (p. 177) and declares that “To be poor thus means to suffer as a result of all the consequences of not having enough economic capacities. Poor people experience the humiliation of not being able to live fully human lives as specified by their society” (p. 177). Building on the broader impact of impoverishment, Lötter (2011) notes that “many morally sensitive people experience moral outrage that humans are allowed to suffer such deplorable conditions” (p.177). Shah and Khan (2015), propose that

the true solution of poverty is a paradigm shift where freedom of the individual is judged on the basis of its consistency with the moral objectives set for the society as a whole. … In this regard, a fundamental requirement is that an individual has to judge his behavior on the basis of some ethical constraints. For instance, he has to give up pursuing his self-interests if it clashes with the interests of society. (p. 678)

The literature and expressed sentiment indicate that though decent work is a parameter of poverty alleviation, it is not a sufficient threshold to eliminate poverty. From this perspective, wages and working conditions as well as other parameters that define decent work should be assessed within the context of other living conditions, including the ability to partake in the broader society. The United Nations has attempted to assess the multidimensions of poverty through the Global Multidimensional Poverty Index (MPI) (United Nations Development Programme, 2019). The categories captured by the index include health, education, and standard of living; though arguably the measures as provided in Table 1 can be correlated with income, they also have cultural attributions and are easily accessible measures of an ability to participate in society.

Table 1.

Global Multidimensional Poverty Index

Dimensions of Poverty	Indicator	Deprived if Living in the Household Where…	Weight
Health	Nutrition	An adult under 70 years of age or a child is undernourished.	1/6
	Child mortality	Any child has died in the family in the five-year period preceding the survey.	1/6
Education	Years of schooling	No household member aged 10 years or older has completed six years of schooling.	1/6
	School attendance	Any school-aged child is not attending school up to the age at which he/she would complete class 8.	1/6
Standard of Living	Cooking fuel	The household cooks with dung, wood, charcoal or coal.	1/18
	Sanitation	The household's sanitation facility is not improved (according to SDG guidelines) or it is improved but shared with other households.	1/18
	Drinking water	The household does not have access to improved drinking water (according to SDG guidelines) or safe drinking water is at least a 30-minute walk from home, round trip.	1/18
	Electricity	The household has no electricity.	1/18
	Housing	Housing materials for at least one of roof, walls and floor are inadequate: the floor is of natural materials and/or the roof and/or walls are of natural or rudimentary materials.	1/18
	Assets	The household does not own more than one of these assets: radio, TV, telephone, computer, animal cart, bicycle, motorbike or refrigerator, and does not own a car or truck.	1/18

Source: United Nations Development Programme, 2019.

The 2019 MPI represents a revised measurement tool from the original launched in 2010. The revised indicator coincides with the start of the third decade on poverty reduction (2018-2027) and reflects consultation and input from academics, UN agencies, national statistics offices, and civil society organizations.

Summary

Decent work is not a simply defined concept. It is contextually bound and affects not only income but quality of life parameters that include societal inclusion. Given the breadth of the impact of decent work, it is important to measure it in the context of a nation and in terms of both quantitative and qualitative variables. Therefore, though income is often used as a proxy for decent work and increasing changes in income over time are attributed to the attainment of decent work, income reflects only one parameter. The ability to partake in societal activities, acceptance in social settings as well as safety and dignity within and outside a work environment are all significant and important elements of decent work that require measurement and assessment on a routine basis. From this perspective, decent work is both an absolute and relative attribute; it has a minimum threshold but is relative to the context of the society in which the threshold is being applied. Further, given the dynamic elements of society, the threshold parameters for decent work require adjustment with time to capture the changing conditions of the workplace and cost of living as well as other parameters defining decent work.

Decent work is culture specific as well, and this attribution needs to be included in its evaluation. Limiting an evaluation of decent work to only quantitative characteristics may bias the benefits derived from the measure due to the exclusion of cultural attributions that may be omitted, such as the value of unpaid work.

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