Purchasing practices and low wages in global supply chains: Empirical cases from the garment industry

Abstract

This paper attempts to explain why brands and retailers do not implement better wages on a larger scale. It analyses the hurdles buyers face when trying to implement higher wages in their supply chains, and assesses how they try to raise wages. It particularly examines how lead firms' purchasing practices affect wages, and how they improve working conditions in their supply chains. The three main research questions are: 1. What root causes do low wages in the supply chain have? 2. How do buyers try to raise wages in their supply chain? 3. How do purchasing practices enable suppliers to implement, or prevent them from implementing higher wages and decent working conditions? The paper has an empirical focus. It examines 14 brands and retailers, most of which are small and medium enterprises (SME), and most of which have a policy to implement a 'living wage' at their supply factories.

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