WSI Mitteilungen 01 2021

: Issue 01/2021

WSI-Mitteilungen 1/2021, pp. 3-11

Kristoffer Marslev, Cornelia Staritz, Gale Raj-Reichert, Leonhard Plank

Social Upgrading und Worker Power in Global Value Chains


This article criticises the conventional social upgrading concept in global value chain (GVC) research based on an inadequate consideration of how power relations affect workers’ conditions. The authors present a re-conceptualisation based on a critical understanding of worker power that is conditioned by different relationships on a vertical axis and local capital-labour and state-society relations on a horizontal axis of GVCs. They also call for an analysis of the intersectionality of worker identities in power relations and the exercise of power. Hence, worker power, discussed in this article as structural and associational power, is exercised at the cross-section of the vertical and horizontal axes and embedded in state-society relations and multiple identities of workers. An exemplary analysis of the clothing sector in Cambodia shows how the re-conceptualisation can be useful to assess social up- and downgrading processes. more … (in German)

WSI-Mitteilungen 1/2021, pp. 12-19

Christina Teipen, Fabian Mehl

Social Upgrading and Industrial Relations in the Global South


Discussion on the effects of integration in global value chains for workers in the Global South commonly oscillates between references to posi­tive employment effects on the one hand and low wages and violations of labour standards on the other. This article presents a comparative analysis of four industries and six emerging and developing economies to examine the necessary conditions for social upgrading. In particular, the authors focus on the influence of different national systems of industrial relations. It is shown that economic upgrading alone (as in the case of China) has only a limited effect on social upgrading if it is not coupled with independent collective representation of workers’ interests. On the other hand, it is shown that in countries with strong democratic trade unions, substantial successes in collective bargaining have been made at the sectoral level. However, it is also observed that social downgrading has occurred in industries where, as in the Vietnamese and Indian garment industries, there has been neither economic upgrading nor the establishment of recognised trade union representation structures. more … (in German)

WSI-Mitteilungen 1/2021, pp. 20-27

Do Quynh Chi

The Lack of Economic and Social Upgrading in the Clothing and Electronic Industries of Vietnam. Risks of Systematic Barriers


With reference to the literature of global value chains (GVCs) and industrial policy, this article discusses the (lack of) economic and social upgrading in the clothing and electronic industries of Vietnam. The focus of the analysis is placed, on the one hand, on the export-oriented policies of the country, which concentrate on the manufacturing industries and foreign direct investment. Focus is also on the industrial relations institutions (including the trade unions) which have remained largely unchanged since the time of the centrally planned economy. Research found that the clothing and electronic industries are locked into the lowest value sections of their GVCs due to the supply chain strategies and purchasing practices of the lead firms. The Vietnamese government’s discriminative policy against the domestic private sector has stifled its ability to upgrade and exacerbated the adverse impacts of buyer-driven GVCs. In turn, to sustain the comparative advantage of low labour costs, the government has to continue to restrict workers’ basic labour rights and continue being lenient on employers’ violations of labour standards. This has become a vicious circle, deeply integrated in the industrialisation strategy of Vietnam. more … (in German)

WSI-Mitteilungen 1/2021, pp. 28-36

Mark Anner

Price Pressure in Global Value Chains and Its Impact on Violence and Harassment at Work


Power asymmetries in Global Value Chains (GVCs) have been associated with low wages, long hours of work, and violations of freedom of association rights. Less studied has been the impact of GVC power asymmetries on work intensity and violence and harassment at work. This article seeks to fill that gap through original survey research on the Indian garment export industry. It finds that 64 per cent of workers report that they experienced verbal abuse, most often for not meeting a management-imposed production target. Addressing these issues requires ratification of ILO Convention 190 and changes to domestic regulation. And it requires that enterprises at the top of GVCs change purchasing practice that contribute to violence at work and their acceptance of binding agreements in their value chains to end violence and harassment at work, in accordance with the recent agreement on the textile and clothing industry in Lesotho. more … (in German)

WSI-Mitteilungen 1/2021, pp. 37-43

Boy Lüthje

Platform Capitalism Made in China: Digitalisation of Low-wage Production


The article examines the current digitalisation of Chinese manufacturing from the perspective of socially-shaped technological transformation. Referring to e-commerce-based manufacturing the author examines the simultaneous changes in technologies, value chains and work. For this purpose, reference is made to the current international discussion on the digitalisation of production and introduces the automation strategies under the “Made in China 2025” programme in classical industrial manufacturing. This is followed by an empirical analysis of the new e-commerce-based manufacturing platforms of China’s largest online retailer, Taobao, and their implications for work organisation and working conditions. The conclusion discusses perspectives for the upgrading of work within platform-based manufacturing models and some implications for labour and industrial policies. more … (in German)

WSI-Mitteilungen 1/2021, pp. 44-52

Christoph Scherrer, Ismail Doga Karatepe

Collective Action as a Prerequisite for Economic and Social Upgrading. Theoretical Considerations and Examples from Agricultural Supply Chains


This article highlights the importance of collective action and the role of the state in upgrading the social and economic conditions of farmworkers and smallholders. It is argued that economic upgrading does not automatically translate into social upgrading for workers and small producers and explores the conditions conducive to social upgrading. The asymmetric power relations among actors in the agricultural value chain erect barriers that hinder social upgrading of smallholders and farmworkers. Collective actions of those who are currently underprivileged in the agricultural value chains and the efforts of states can dismantle these barriers. Based on Keynesian development theory, labour market theories and the power resource approach, the article documents three successful examples from Pakistan and Brazil where collective action and state involvement have partially dismantled barriers against upgrading. more … (in German)

WSI-Mitteilungen 1/2021, pp. 53-60

Petra Dünhaupt, Hansjörg Herr

Economic Upgrading in Global Value Chains. How Much Space do Developing Countries Have for Industrial Policy?


On the basis of regulations issued by the World Trade Organisation (WTO), bilateral investment agreements and free-trade agreements, industrial policy today takes place within the framework of extensively de-regulated international markets. Despite some restrictions, the WTO allows comprehensive industrial policy, whereas bilateral investments and free-trade agreements involve stricter restrictions for industrial policy. The article argues that comprehensive cluster policy is possible: through coherent interactions of technology policy, qualification measures for the work force, general subsidies, development banks, state-owned enterprises and institution building. Industrial policy in developing and emerging economies should concentrate on combining economic cluster policies with economic and social upgrading in global value chains. more … (in German)

WSI-Mitteilungen 1/2021, pp. 61-65

Frank Hoffer

National Collective Bargaining Agreements plus Global Purchasing Practices – a Track to Living Wages


In the global garment industry, labour and wage standards are under constant international competitive pressure, especially since the end of the multi fibre agreement. Traditional national wage and collective bargaining policies must therefore be linked to the social responsibility of global corporations for their supply chains in order to remain or become relevant. This is new institutional territory. The article discusses the ACT approach, in which 21 global companies have signed a Memorandum of Understanding with the global trade union federation IndustriALL in order to enforce national collective agreements with living wages for textile workers through their purchasing practices. more … (in German)

WSI-Mitteilungen 1/2021, pp. 66-70

Stefanie Lorenzen

A German Due Diligence Law for Supply Chains – How Will it Become Effective?


Deficient working and human rights conditions remain principally unresolved problems of global value chains. Increasingly, national mandatory due diligence legislation is passed to attribute enterprises with responsibility for duty of care in global value chains. This article examines which elements of such a German supply chain due diligence law would ensure positive impact to prevent human rights violations, enhance social upgrading and create access to the law for possible victims. It is argued that enforcement which offers mechanisms for sanctions may improve impact. At the same time possible external hindrances need to be taken into account. more … (in German)

WSI-Mitteilungen 1/2021, pp. 71-72

Frank Zach

Responsible Corporate Governance in Global Value Chains


In recent months there has been a vehement debate about whether and to what extent companies should be held legally responsible for upholding human rights in their global value chains. The result has been a climax in the debate on the legal implementation of the UN Guiding Principles for Business and Human Rights in Germany and Europe. It fundamentally concerns the negative impacts of the existing business model of globalisation which is based on low cost production, in part exploitative wages and a lack of safety and environmental protection. Legal regulation as is to be found in the Supply Chain Act, which is currently in preparation, has long been overdue. It will be an important contribution to fair globalisation, but also in other areas of politics the aims of humane working conditions and social and economic opportunities in global value chains must be consistently pursued. more … (in German)

WSI-Mitteilungen 1/2021, pp. 73-75

Bernd Lange, Tim Peter

Regulation of Supply Chains – the European Task


The Corona crisis has highlighted to an alarming extent the fragility of a globalisation that is built on cost reduction and efficiency. The consequence has been the partial collapse of supply chains and shortages of urgently needed products. These events add an important aspect to the long-running debate on decent and humane working conditions in global supply chains and underline the urgency to act. The authors argue that the answer to the experiences of the recent months and years must be a regulation of supply chains at European level – focused on creating resilience and sustainability. more … (in German)