Workplace bargaining for decent wages

What is the most effective way for workers to get decent wages? The practical experience of the Karnataka Garment Workers’ Union (KOOGU) in Bangalore, India could hold the answer to this question. 

In September 2021, the union demanded a Rs. 1,500 monthly salary adjustment last year from the management of India’s largest supplier to fashion brands. Management strongly responded with the argument that their profit margins are “too narrow” to allow for a wage increase due to low purchasing prices dictated by the brands. 

In good faith, KOOGU was convinced there was truth in this argument and moved on to demand that the brands shoulder the adjustment by increasing their purchasing prices. Most of the brands ignored the letter while the few that answered pointed their fingers at suppliers. 

KOOGU did not give up and continued calling on the brands with the support of international labour rights organizations to increase the pressure, often quoting the brands’ own CSR commitments. The union now aims at using the existing human rights due diligence laws of Germany, France and Norway on erring brands, while anticipating the passage of a similar measure by the EU. 

KOOGU’s collective bargaining approach directly confronts the reality of brand dominance across global supply chains, with workplace unions themselves using due diligence regulations as leverage and with the added pressure of advocacy campaigns by international labour rights organizations. Although a work in progress, this strategy cuts through the rhetoric and throws the following fundamental questions to all stakeholders, especially the brands: Is there an imbalance in the sharing of profits in the global supply chain? Is the purchase price really the ceiling for setting decent wages? If it is not, then what is it? If it is, then why not just increase it?  

The strategy uses all available tools in the labour rights arsenal to target the root of low wages in production countries. To use a battlefield analogy, advocacy actions are the “air support” to the union’s “ground operations,” or continuous collective bargaining at the enterprise level. 

KOOGU’s approach provides for ongoing, non-stop, and long-lasting pressure at the factory level and on brands. This can help unions throughout the supply chain to demand more effectively for decent wages and restrain the hand of management from suppressing their growth. It can also help suppliers gain a bigger share of profits within the supply chain, enabling them to increase wages and benefits to levels that can improve relations with their workers and enhance their public image. 

If more and more unions from production countries adapt KOOGU’s strategy to their own work, pressure will accumulate and not only will due diligence commitments be translated into real improvements, but the game will be fundamentally changed. 

Back to Basics

Yet, in order to bargain with employers from a position of strength, trade unionism needs to go back to its 19th-century roots.

Union pioneers saw organizing and collective bargaining as continuous and integral tasks, especially when it comes to negotiating for better wages. As workers only join unions that show concrete results, unions had to constantly deliver tangible gains if they wanted to recruit more members.     

Workplace unions that formed federations created further possibilities for improving workers’ rights on a larger scale, later evolving into industry-level collective bargaining and participation in national governance on behalf of the labour sector. With growth also came wider recognition of labour rights, encouraging the integration of human rights in business conduct and adding more instruments into the workers’ CB toolbox. 

A Two-Pronged Strategy for Decent Wages

Although brands declare in their CSR commitments that they expect suppliers to provide the legally-mandated minimum wage, the stark reality is that minimum wages in production countries are not even close to decent wage standards, and those wage adjustments, when they happen, merely cover for the cost of inflation. 

But for unions in the Global South that are strong enough to reach CB agreements with employers, wage increases can be guaranteed over several years and in levels that can be higher than the national or sectoral living wage. A legislative approach to wage setting is, by contrast, a tortuous and lengthy process that often results in minimal and irregular gains for workers, if or when they happen at all.

In today’s globalized reality, purely localized collective bargaining is no longer sufficient. Unions in production countries must now contend not just with their immediate management but also with a hidden employer – the brands, whose procurement practices exert a powerful influence on decisions to increase wages in global supply chains.  

KOOGU’s approach highlights how labour standards and due diligence regulations are more effective when unions exist on the ground and are trained to use these tools for the workers’ collective gain. Without the active role of unions, these standards and regulations are not only failing the labour sector, but can even be used by brands to whitewash their abuses and boost their image. 

It is never easy to sustain a union at the workplace, and it is even more difficult for a factory-level union to bargain with employers. But as labour rights abuses often occur at the workplace, unions at the frontline of global supply chains are strategically positioned to flag these abuses and ensure through collective bargaining that employers and brands are held accountable for any wrongdoing. 

Facing challenges and dealing with difficulties is the life of the trade union movement. Collective bargaining requires faith in the process and an attitude of never backing down on basic rights. Finally, for the strategy to succeed, it needs more unions from production countries to come on board and join the fight for decent wages through continuous workplace organizing and collective negotiations. 

Sebastian Devaraj is the Executive Director of the Foundation for Educational Innovations in Asia (FEDINA), a Bangalore-based NGO that creates awareness of existing labour laws through training and assists workers to bargain collectively for better working conditions and wages.