Decent work.. How can the cycle of poverty in global supply chains be broken?
In recent years, international trade has expanded and the interconnectedness of global economies has increased, but achieving decent work represents a challenge for millions of workers participating in global supply chains. Although these workers contribute to the production of goods and services that generate significant returns in international markets, estimates indicate that about one in five people working around the world still live in poverty, which highlights the challenges associated with the distribution of value within global supply chains.
This reality has re-highlighted the necessity of providing wages and working conditions that enable workers and their families to live at a decent standard. In this context, the International Labor Organization adopted in 2024 a groupIt is one of the general principles for determining and calculating decent living wages in various countries, in a step that reflects the growing global interest in improving the conditions of workers and linking economic growth to social justice.
Researchers believe that the challenge in the past was to recognize the right of workers to obtain an income that would ensure a decent life, but now it is centered around finding practical mechanisms that ensure this is achieved within global supply chains that extend across multiple continents and include economic parties with varying negotiating capabilities.
This trend is consistent with the objectives of the eighth goal of the Sustainable Development Goals (SDGs), which emphasizes that providing job opportunities should be accompanied by fair wages and working conditions that ensure a decent life for workers and their families.
Studies show that one of the reasonsA key factor in the persistence of working poverty is the way global supply chains are organized. Many agricultural, industrial and service products are produced in low- and middle-income countries, while being sold in wealthier markets where large companies make the bulk of the profits.
These chains depend on a complex network of international suppliers, producers and buyers. Often, large global companies, such as supermarket chains and international brands, have great power to set prices, purchasing conditions and required standards, giving them broad influence within the production chain.
This disparity in bargaining power results in suppliers and workers obtaining a limited portion of the final value of the product, while the economically stronger parties capture the largest share of the returns. And to maintain its capacityCompetitiveness: Supplier companies find themselves under constant pressure to reduce costs, and wages are often the top item affected by these pressures.
This results in what is sometimes known as a “cost-cutting race,” where some companies or markets compete to reduce labor costs to maintain contracts and markets, which can lead to persistent poverty even among people with regular jobs.
When standards do not achieve the required results
Over the past two decades, many governments and companies have sought to improve working conditions through accreditation systems, certifications, and quality and sustainability standards. These initiatives included requirements relating to working conditions, occupational health and safety, and in some cases improved wage levels.
Despite the importance of these efforts, a number of studiesIt indicates that achieving the desired results requires more than supervisory standards. So as not to cause unintended negative effects. Examples include supermarkets in Europe and the United Kingdom, which impose strict standards on product quality and working conditions on the South African fruit export sector, but import fruit at low prices; Fruit exporters therefore incur additional costs to be able to comply with these standards.
In an attempt to maintain their competitiveness, some producers resort to reducing labor costs by expanding the employment of seasonal workers instead of permanent workers, or increasing workloads and reducing some benefits. Thus, standards designed to improve working conditions may contribute to increasing the fragility of some jobs rather than improving them, which highlights that formal adherence to standards is not sufficient to achieve the eighth goal of development.Sustainable work, as decent work requires addressing economic imbalances that affect the distribution of value within supply chains, and not simply imposing regulatory requirements on producers.
Promising models for promoting decent work
On the other hand, some initiatives showed more positive results. Because it relied on long-term cooperation and partnerships, rather than just oversight and compliance with standards.
Chili pepper cultivation in South Africa
Nando’s PERi Farms initiative is an example of this approach. The initiative works with small-scale chili farmers in Malawi, Mozambique and Zimbabwe, by providing technical support, agricultural inputs and ensuring the purchase of the crop.
This model helpedIt has helped many farmers increase their incomes and improve their living conditions, and it has also allowed them to invest in education, housing and improve the standard of living for their families.
Coffee in Uganda
Also in Uganda, Mountain Harvest takes a different approach: dealing directly with coffee farmers and paying higher prices for the crop, allowing the farmers to capture a greater share of the economic value of the product.
The Foundation also supports the diversification of sources of income by encouraging the cultivation of additional crops such as avocados and macadamia, which reduces complete dependence on one crop and enhances the economic stability of agricultural families.
The experience also demonstrated the importance of understanding local conditions, especially with regard to seasonal female coffee bean sorters, a group that often benefits least from improvements.Economics within supply chains.
Tourism in South Africa
As for the tourism sector, the Fair Trade in Tourism organization in South Africa has developed a model that relies on more than just adherence to traditional standards. This model combines adequate wage requirements, guidance and training programmes, exchange of experiences and support for participating institutions.
Participating institutions indicated improved working conditions, high employee retention rates, and improved quality of services provided, which reflects both the economic and social benefits of decent work.
Why were these experiments successful?
The three case studies reveal a set of common factors that contributed to better outcomes for workers and suppliers.
First: These initiatives recognized that improving workers’ conditions requires rethinking how value is distributed along the supply chain, including paying fairer prices to suppliers and producers.
Secondly: These experiments relied on building long-term relationships between buyers and suppliers instead of short-term transactions, which provided greater stability and encouraged suppliers to invest in their workers.
Thirdly: These models were based on cooperation between companies, non-profit institutions, and local entities, which helped design solutions more closely related to the local reality and the needs of the target communities.
Finally: These initiatives dealt with workers as an essential element in business successAnd its sustainability, and not just a production cost that can be reduced whenever economic pressures intensify.
Decent work and sustainable development
If experts believe that achieving decent work within global supply chains requires deeper changes than imposing standards or issuing regulations; Companies are required to reconsider their pricing and purchasing policies and their relationships with suppliers, to ensure a more equitable distribution of economic returns.
Governments and international institutions also have an important role to play in supporting business environments that encourage fair trade practices and link economic development with improving the conditions of workers. At the same time, consumers can contribute to this change by supporting companies that prioritize workers’ rights and fair wages.
In conclusion, she confirms The Earth Guards Foundation The importance of promoting decent work as one of the basic pillars of achieving sustainable development and reducing poverty and inequality. It also emphasizes that building more equitable and sustainable supply chains requires cooperation between all parties concerned, ensuring that workers receive a more equitable share of the value they contribute to producing, and supporting decent livelihoods for individuals and communities.
