http://www.businessweek.com/articles/2014-09-22/h-and-m-other-fashion-brands-back-minimum-wage-hike-in-cambodia
A number of fashion brands
including Swedish H&M have backed a minimum wage hike for workers in
Cambodia. Garment workers in the Asian
country have been protesting for a hike in minimum wage for a significant
amount of time. In January of last year, a police crackdown left several dead
in said protests. Recently, the protests
have not been in the form of strikes but as protests during factory lunch
breaks. The strategy seemed to work as eight major fashion brands submitted a
letter to the Cambodian deputy prime minister backing a minimum wage hike. The
letter addressed fair living wage, changing purchase practices and prices to
account for this hike. The letter did not address specific figures but is a big
step in creating fair wages for outsourced jobs.
As we learned in class, companies that willingly pay higher wages are hoping for higher quality of work and lower turnover, but the higher wages will lead to higher unemployment. It will be interesting to keep an eye on what actually happens to the workers after minimum wage rises.
ReplyDeleteWhen employers have tight budgets and the minimum wage is raised, oftentimes they can no longer compensate the same number of employees at a higher rate; as a result, they must lay off workers in order to remain within budget. This means that while some employees are making slightly more money, others are left unemployed. Additionally, employers may raise the prices of their products in order to generate enough revenue to support their more highly paid minimum wage employees.
ReplyDeleteThis does not surprise me at all. If workers are underpaid they are less motivated to do work, and their productivity will be low as well. Although raising wages will increase unemployment, it could potentially benefit the company in their productivity. Something should be done about these protests, and the most humane option is to increase wages, and if need be increase prices to keep the same amount of workers, which could potentially lead to more productivity.
ReplyDeleteI think these workers definitely deserve an increase in their pay. Many workers overseas are overworked and underpaid. If the minimum wage hike is applied, employees may become more productive as a result of higher wages, benefiting not only themselves but the companies they work for as well. However, companies wouldn't be able to employ as many people, increasing overall unemployment as well as the prices of the products that the companies produce. It will be interesting to see what ends up happening with this proposal.
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