Friday, August 29, 2014

Are you supporting substandard labor practices?

Earlier this summer, results of the fifth annual Survey of Footwear Factories in China were released by the Footwear Distributors and Retailers of America (FDRA) and supply chain firm ELEVATE.  The findings were taken from 110 factories across China, where it is now estimated that 80% of the U.S. Footwear Market is produced.  Data is from 2013.

What is good about this survey is that it gives brands of imported footwear a good general understanding of the issues these manufacturers are facing at the production level.  It also offers some transparency to the brands, retailers, and consumers on the labor practices -notorious in third world industrial centers- that are still evident, and continue to blemish the industry.  FDRA has released the survey report to its members and they have created a summary infographic to the public.

The survey reveals the current state of factories that produce footwear in China and how they are addressing challenges facing our industry.  Among them include

  • continued increase in raw materials
  • reduction in labor force
  • increase in wages

With these issues on the supply side along with the added competition among factories for the business, the pressure from the brands to manufacture a lower cost product puts the squeeze on factory owners.  Time and money are paramount.  To cope with these challenges factories turn to substandard labor practices including:
  • longer working hours
  • hiring of underage workers
  • hiring of workers past retirement age
  • paying below minimum wage
Recent factory disasters over the past few years have brought the poor working conditions in Asian factories to light.  Some consumers have used their purchasing power to express disdain for the working conditions of their imported products.  This is one factor in the increase in demand from consumers to purchase US made goods.  Typically, any backlash is forgotten quickly and the consumption of products made under questionable practices resumes until the next disaster is reported.  

Shortly after the results of this survey the FDRA announced the release of a Footwear Production Code of Conduct in an effort to define and uphold better working standards for industry players to apply to their manufacturing partners.  

The factory owners were optimistic in the survey that they would see more business in 2014.  Will that mean more long shifts, underage workers, and wages below scale to keep up?  Now that a major trade group in the Footwear Industry has essentially laid the gauntlet for social standards, will brands and manufacturers comply?  When you buy your next pair of shoes (or sandals), or anything made overseas, will you be promoting the use of 14 year old workers doing 11 hours of work making maybe a dollar a day?