Business Accreditation: To Enhance Global Labor Standards - international labor and wage standards - Brief Article

Humanist, March, 1999 by William III Raynor

International concerns about labor abuses have been well documented for several years. The problem is receiving significantly more attention as global competition increases and watchdog groups continue to bring the issue to the public's attention. Private-sector accreditation (modeled from the accreditation system in academia) may be one method to address labor abuses. Voluntary business accreditation would be an ongoing process that continues to evolve and assure that labor standards are being met.

Labor standards have become even more controversial because of economic recession in many parts of the world. This downturn--combined with constant improvements in technology--has led to a global overcapacity of manufacturing abilities. The worldwide glut in supply capabilities has increased layoffs and sweatshops and reduced wages in many regions of the world.

In many business sectors, there is legitimate concern about reduced profit margins. In other areas, firms have enjoyed exceptional profit levels through technology improvements and low wage rates. Regardless of profit status, however, there has been little incentive for most firms to improve wages or working conditions. The exception: when watchdog groups bring violations to the attention of the firm's customers and the public.

Public policy has also been ineffective in protecting worker's rights. Even with comprehensive policies like the North American Free Trade Agreement (with a separate labor side agreement), there has not been enough attention paid to workers. According to Mark Levinson, chief economist for the Union of Needletrades, Industrial, and Textile Employees, speaking before the City Club of Cleveland on September 4, 1998:

   NAFTA is about setting the rules in this new global economy.... What we
   didn't do was protect the rights of workers ... so the problem with NASA is
   that it protects the rights of corporations ... but it doesn't protect
   worker's rights.... There is a side agreement that is ineffectual.... We
   protect the rights of the freedom of movement of capital--we don't protect
   the rights of workers to organize.

Furthermore, public policy is often too slow or cumbersome to adequately address labor problems in turbulent global environments. Critics are also quick to point out that there are always loopholes firms can take advantage of--at the expense of workers.

There are several advantages for society, workers, and companies themselves to consider voluntary business accreditation structure to enhance international labor conditions.

First, accreditation would assure better labor conditions and a legitimate living wage. Accreditation members, for example, might agree that minimum wage rates should be no less than 20 percent of the average of the three highest wage rates in the region. The incentive to consider proposals like this would be greater in an accreditation setting where competitors might also agree to do the same. Because there could be regional accreditation bodies (like in academia), individual business environments (in Asia, Latin America, and the like) could be taken into consideration.

Second, a better public image would be obtained by the firm's employees, customers, and suppliers, as well as the local, regional, and international communities. As accreditation gains acceptance and becomes the norm, rogue firms may be shamed into joining or at least modifying unacceptable labor practices. Furthermore, as watchdog groups (and whistle-blowers) increase their presence, many firms will be forced into modifying their behavior toward labor anyway.

Third, companies would enjoy enhanced cooperation with public policymakers on other issues (since they would be considered an outstanding member of the community via accreditation).

Fourth, firms could use accreditation as a new marketing tool. Advertising, packaging, and the like would be enhanced by communicating higher company standards.

And fifth, labor consistency, regionally and globally, would be enhanced. If firms can develop standard manufacturing processes (for example, ISO 9000 components), why can't consistent approaches toward labor be taken? Labor, after all, is an arguably greater concern by almost any measure.

Accreditation would not have to be a costly process that unnecessarily burdens firms. Representatives of the firms themselves could be included among the members of the accrediting body. This would help eliminate fears that liberal, over-protectionist measures are being sought by groups with little understanding of economics and international business issues.

Accreditation would be voluntary, as well. While it isn't necessary in academia, final customers (students) question the institution's existence if it isn't accredited. The same could eventually be said for the private sector, as public pressure for meaningful labor reforms increase. The firm's final customers (consumers) may also eventually question why the firm cannot obtain accreditation.

In both academia and the private sector, a case can be made that conforming to accreditation standards is worth the price to assure minimum standards and a positive public image. Accreditation may not guarantee success but it could help firms avoid devastating trouble areas (being boycotted as a labor abuser, for example).