Bad Labor Footprint | Social Impacts in the Supply Chain
As many products are being exported to other countries, and as the products that we consume are often produced elsewhere, the question arises: “How does consumption relate to bad labor conditions around the globe?”. Laura Golsteijn, Technical Analyst for PRé, contributed to the development of the new study: “Bad Labor Footprint”. In this article, she explains how the study offers a new perspective on how to account for the social impacts of globalization.
The social impacts of consumption are getting more and more attention by frontrunner companies in the sustainability arena. Recently, PRé launched the new Handbook for Product Social Impact Assessment, which helps companies to understand and address the social impacts of their products. As many products are being exported to other countries, and as the products that we consume are often produced elsewhere, the question arises: “How does consumption relate to bad labor conditions around the globe?”
Together with scientists from the Norwegian University of Science and Technology and the Radboud University Nijmegen, I was involved in the development of the “Bad Labor Footprint”. In this study, we came up with a new perspective on how to account for the social impacts of globalization. We quantified the connection between consumption and poor labor conditions worldwide, by mapping the poor labor conditions associated to production, and the flows of goods and services from the place of production to the final consumer (see Figure 1, the example of occupational health damage).
Figure 1. Gross flows of bad labor embodied in traded goods leading to occupational health damage. Size of the circles indicate domestic trade (big circles mean high volume) and thickness of the arrows indicate the volume of bad labor embodied in the flows between regions.
Indicators of Bad Labor
Bad labor conditions can be measured, for instance, by occupational health damage, resulting from occupational injuries or occupational exposure to asthmagens, carcinogens, noise, and ergonomic stressors; vulnerable employment; gender inequality; predominance of unskilled and low-skilled labor in the workforce; child labor; and forced labor (see Table 1). The global consumption was aggregated into eight sectors: food, clothing, shelter, construction, manufactured products, mobility, services, and trade.
Table 1. Different indicators of poor labor conditions associated to consumption were mapped, distinguishing sectors and regions in the world.
We calculate the bad labor footprints from two perspectives:
1. Where does the bad labor occur, and who consumes the final product? This approach allocates the poor working conditions to the production sectors where they occur, and results in flows of bad labor from one region to another.
2. What drives the bad labor footprint? This approach allocates all bad labor associated with the upstream supply chain to the final consumed products.
Obviously, there is no difference in the total bad labor footprint per region between the both perspectives. However, the perspectives are crucial to identify the hotspots and causes, and thereby provide insights in how to handle and improve the impact of globalization.
Flows of Bad Labor – Expected and Surprising Outcomes
As expected, most bad conditions are associated with intra-regional trade, and poor labor conditions flow predominantly from developing to developed regions. The majority of bad labor associated with exchanges flows from the Asia Pacific and Africa regions to developed regions.
However, the study showed that developed regions’ lifestyles are supported by bad labor conditions in both developed and developing countries. In rich countries in North America and Europe, around one third of the bad labor impact occurs from the production of domestically traded goods. That means that domestic production and trade also play a significant role in linking bad labor conditions to consumers.
Drivers of Bad Labor
Around one third of workers worldwide are employed in the services sector, which makes this the largest sector of employment. Nevertheless, this sector is not the largest cause of bad labor conditions.
More than half of all workers employed in food production are in a vulnerable situation. This corresponds to 40% of all vulnerable labor in the world. Furthermore, food consumption is connected to 40% of low-skilled workers, and over 40% of child and forced labor.
The occupational health damage is high for construction works. One fifth of the burden of disease is related to this sector. Furthermore, this sector has the lowest proportion of female workers; only 26% of all workers in activities related to construction are women.
Bad Labor Footprint – Comparative Risk Assessment Between Economic Sectors and Regions
The results from our “Bad Labor Footprint” approach provide insights in the social impacts of globalization. The approach facilitates a comparative risk assessment between economic sectors, as well as between regions. This way, we can answer questions like: “How much emphasis should we put on the supply chains of the T-shirts and soccer balls consumed in developed countries when addressing the poor labor conditions around the globe?”
As our “Bad Labor Footprint” approach showed that around one third of the bad labor impact in North America and Europe occurs from the production of domestically traded goods, there are improvements to be made in every geographical region.
Value for Practitioners
The current study maps the worldwide poor labor conditions associated to production, and the flows of goods and services from the place of production to the final consumer. However, if you want to evaluate the social impacts of a specific product rather than for an economic sector or region as a whole, I recommend you to use the new methodology proposed in the Handbook for Product Social Impact Assessment. Since there are large data gaps in the inventory data for social impacts, the results from the current study could be useful proxies for practitioners who want to perform Product Social Impact Assessment based on the Handbook.
If you want to learn more about the study "Bad Labor Footprint", please send me an e-mail, I will be delighted to share more insights with you.