VII. RESEARCH QUESTIONS

Research Question 2: Does the Athletic Apparel Industry pay a living wage?

This study group will sample subcontract factory workers, review factory payroll records, and collect data that will measure and validate various living wage formula. They will also propose action research experiments in alternative wage systems.

Is a living wage too subjective to measure?  Is the legal minimum wage enough to cover living costs?   Finally, is there a reliable and valid method to measure living wage? There is a need to begin testing and calculating the Living Wage Formulae (See one Methodology for Calculating Living Wage proposed by Sweatshop Watch). 

Mihaly and Massey (1997) in an Amos Tuck business school study of wages in Indonesia and Vietnam have suggested a different calculation.  This study group would review the available calculation methods, propose a methodology to test various methods using wage data collected on a sample of third world factories.  The group will propose a maximum possible set of factories and a reliable and valid sample of works' wage reports to study.  At issue is deciding whether to interview workers about their wages and living expenses. Mihaly and Massey's (1997) MBA study group argued that interviewing workers would lead to biased results.  Others (Boje (1998a, Carty, 1999) contend that interviewing workers is absolutely necessary.  The study group could contrast both approaches.  

There are country differences that need to be study. For example, in Indonesia, is Rp 10,000 (about US$1.20) per day is simply not a living wage for a human being to survive.  The situation of workers in Indonesia is considered by most previous studies to be the worst, China comes next, then comes Vietnam. The situation is El Salvador and Honduras is also critical.  Athletic apparel workers paid at the minimum wage rate in Vietnam may not bad by Vietnamese standard, but in Indonesia it does seem workers can barely survive. Academics and others may debate the relative ranking of survivability, but the point is that country comparisons are necessary. 

If we evaluate working conditions just on wages, with regard to Indonesia, the government itself admits that the regional legal minimum wages are too low to meet the basic needs of a single adult. Garment suppliers are only required to pay the legal minimum and the sport shoe suppliers are required by by various logo corporations only a bit more. However, workers in the sport shoe factories are paid for overtime, so when they work a lot of overtime they can earn wages which cover their needs, although still not enough to meet the needs of a family.

In terms of China, it seems that the shoe factories are paying the legal minimum (but this is achieved only by working overtime more than the legally allowed maximum). It is less clear, what the garment factories producing for logo corporations are doing. Generally, these corporations seem to pay a lot more attention to whether sport shoe suppliers keep local wage laws than it does with garment suppliers. In US dollar terms, Chinese legal minimum wages are certainly higher than Indonesian legal minimum wages (in the order of 40% higher), although of course this doesn't tell us how much workers can buy with those wages. 

For wages in Vietnam the question is can workers meet their basic needs? The only wage analyses we've seen on Vietnam is the Dartmouth (Amos Tuck) study (which was and work that Ruth Rosenbaum did in 1998, which suggested that wages paid to contract factories were inadequate to meet basic needs.

There is also a need to study the relationship between third world governments and minimum wage levels set to attract corporate investment. Governments encourage athletic apparel industry investment in their country and in exchange sets the wage rate at or slightly above the minimum allowable by each government. The question is can workers live on such wages? In addition, in assessing wage issues, can one be attentive to well-being and  capability models rather then subsistence? 

It is essential to involve workers in the study of their wage, overtime, and benefit systems. This is a basic tenet of action research approaches to this problem.  Again, we intend to propose and implement alternative wage systems that can be scientifically compared.

Global Alliance has workers to participate in focus groups and interviews before, but we would like the work to be done by academics instead of paid consultants. Global Alliance is a consulting firm, not an academic research operation.  We would also like to have access to samples of workers to review worker perceptions of their wage and overtime situation. And a sample of factories where we could propose and collaboratively implement alternative wage systems.  

For us the next step is action research. The French Taylorism and even the original version of Taylorism that included differential piece-rate systems seems to us a reasonable approach to try. We would like to test this in action by adopting different wage schemes and contrasting results.

The study group will decide the particulars of the methodology, run the study and any action research experiments, and make its recommendations and findings. 

Study Group 2 Volunteers to date (Click on the name link to go to their statement and list of publications):

Items Recommended for Review by study Group 2:

1. Ballinger, Jeff replying to this proposal, sent in this article on 16 September, 2000 Nike: American dream on RI sweat from Jakarta news. 

2. The Olympic Living Wage Project - The Olympic Living Wage Project, sponsored by Press for Change, and done in collaboration with the Nicaraguan Solidarity Committee, NikeWatch, and Call to Action USA, is an international human rights project focusing on the lives of sweatshop workers in Indonesian shoe factories. The Project sets out what it takes to live on Indonesian wages at a Nike factory See http://www.nikewages.org/addressing.html