Ratcheting Labor Standards: Regulation for Continuous Improvement in the Global Workplace

Abstract:     
It is a brute fact of contemporary globalization?unmistakable as activists and journalists catalog scandal after scandal?that the very transformations making possible higher quality, cheaper products often lead to unacceptable conditions of work: brutal use of child labor, dangerous environments, punishingly long days, starvation wages, discrimination, suppression of expression and association. In all quarters, the question is not whether to address these conditions, but how.

That question, however, admits no easy answers. Globalization itself has freed capital from many of its former constraints?national workplace standards, collective bargaining, and supervisory state agencies and courts?designed to humanize working conditions. A natural response, best expressed in the ILO's core labor standards, has been to attempt to build global versions of national institutions by establishing universal minimum standards of work and international inspectorates and courts to monitor and enforce them. But the machinery to compel global producers to adopt those standards does not exist and will be quite difficult to build. Alternatively, some multinational corporations and non-governmental organizations have struck out on their own, agreeing voluntarily to adopt various codes of conduct and allowing outsiders to verify compliance with these codes. In some cases these efforts have yielded impressive gains. But their piecemeal character highlights the difficulties of generalizing independent monitoring into an encompassing labor regulation regime.

In this paper, we develop a third approach that attempts to harness some of the drivers and methods of contemporary globalization to the goal of improving international labor practices. An on-going globalization of information flows and advocacy campaigns around labor and human rights issues has successfully pressured a number of firms to significantly alter their production practices and labor conditions. Leading firms in the world economy, who have mastered the disciplines that foster excellence and innovation among their own workers and suppliers globally, are being motivated to turn these practices to social concerns. The impressive gains that have been achieved in product quality, diversity, price, and innovation in global markets, can, we assert, be extended to focus these disciplines on the improvement of labor and environmental conditions, and social performance more generally. We offer "Ratcheting Labor Standards" (RLS) as a regulatory strategy that does just this; rather than devising institutions that attempt to constrain the rapidly changing forces and processes of globalization, RLS attempts to redirect some of these energies toward the advancement of social ends.

Working Paper Series