Human Labor is Integral to the Supply Chain

In honor of Labor Day, we decided to do some research to identify and share various pressing labor issues that deserve the attention of procurement professionals. As shown by current issues ranging from the ongoing fast food wage protests in the U.S. to child labor and safety concerns abroad, many diverse aspects of labor (present circumstances, proposed legislation, worker discontent, etc.) impact procurement activities.

Workforce violations and labor discontent within our suppliers – or suppliers’ suppliers – is something we should all pay greater attention to. After all, human labor is integral to the supply chain. Imagine if all Starbucks employees decided to walk out of the job one day – I think we’d have to close our office given the productivity loss.

On a more serious note, here’s the labor round-up list below. And please take at least a few minutes today to remember the importance of labor in history – and procurement.

Activists across the globe are pushing for an end to child labor. Time Magazine reports that last week, more than 300 people walked to India’s parliament to deliver a petition with one million signatures, in hopes that lawmakers will soon pass the anti-child-labor legislation that has been under consideration since May 2012. The proposed legislation would prohibit employing children under 14 and provide stricter punishments for those who use underage labor. Many of the protesters were children, as the WSJ reports. In this age of subcontractors, hardly any global company is safe from labor violations. Remember Apple, Inc.’s child labor scandal from January?

Worker safety remains a big concern. While it’s been a few months since the Bangladesh building collapse that led to more than 1,100 deaths, an editorial in the New York Times argues that little has been done to compensate the victims and their families. As the editorialist writes:

After the disaster at Rana Plaza, a poorly constructed eight-story building outside Dhaka, the capital, Ms. Hasina [Bangladesh’s Prime Minister Sheikh Hasina] promised to give the relatives of those who died about $1,250 in cash and $19,000 in savings certificates — amounts that far exceed the roughly $1,250 that factory owners are legally required to pay per victim, but far from sufficient, considering that many victims were young women and men who had a whole lifetime ahead of them. The money was supposed to come from the government and from private donations by, among others, the factory owners. But the government has yet to distribute most of that money. It has provided sums ranging from $1,250 to $5,000 to about 777 families, far short of the total compensation it had promised.

Looking at labor news in the U.S., can fast food workers manage to double the minimum wage? Last Thursday in New York, fast food workers began a new wave of protests for a higher wage. According to the Los Angeles Times, organizers of the protests are aiming for the movement to spread to 50 cities nationwide and 1,000 stores. Chances are, if you live in urban or suburban America, over the next few weeks you can see (or participate) in one of these protests. The great majority of fast food workers are paid minimum wage, which is $7.25 or slightly higher. Since the first fast food wage protest took place last November, there have been several rounds of protests in the major cities, including Chicago. And the goal of the protests remains the same: to receive a $15 hourly wage.

Considering that President Obama’s efforts to increase the federal minimum wage to $9 were shot down, the protesters are in for a long fight—if they even ever accomplish the $15 wage. However, as Jena McGregor wrote in The Washington Post, “What’s unusual about their efforts is that they aren’t protesting the actions of a single company… they’re trying to enact change at the national level, altering federal law.” The workers are going to all this trouble in large part because an increasing number are in this industry for the long term. According to QSR, turnover in the fast food workforce has been steadily dropping in the past few years.

Editorials in The Boston Globe and The Wall Street Journal argue in favor and in opposition of the wage increase.

If you’ll excuse the bathos, not only does Wikipedia cover labor issues here and there, they’re also quite humble about the “disputed neutrality” of various items, as you can see below:

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