The global supply chains of 50 companies employ only six per cent of people in a direct employment relationship. Yet they rely on a hidden workforce of 94 per cent according to new research from the International Trade Union Confederation ITUC.
“Just 50 companies including Samsung, McDonalds and Nestle have a combined revenue of $3.4 trillion and the power to reduce inequality. Instead they have built a business model on a massive hidden workforce of 116 million people,” says Sharan Burrow, ITUC General Secretary.
An unsustainable business model
The ITUC report, Scandal: Inside the global supply chains of 50 top companies exposes an unsustainable business model. Its global footprint covers almost every country in the world. It profiles 25 companies with headquarters in Asia, Europe, and the United States.
The research shows:
- The cash holdings of 25 companies of $387 billion could increase the wages in their combined hidden workforce of 71.3 million by more than $5000 for a year;
- The combined wealth of 24 companies in the US from including Amazon, Walmart and the Walt Disney company, could buy Canada;
- Nine companies in Asia including Foxconn, Samsung and Woolworths have a combined revenue of $705 billion, the equivalent value of the UAE;
- Seventeen companies in Europe including Siemens, Deutsche Post and G4S have a combined revenue of $789 billion, the equivalent value of Malaysia.
“Profits are driven by low wages levels that people cannot live on. These profits risk safety with the result of indefensible workplace injuries and death. These profits are increased by tax evasion or tragically linked to pollution of community land and water.”
“When global business won’t pay the moderate demands of workers for a minimum wage on which they can live with dignity, $177 in Phnom Penh, $250 in Jakarta, $345 in Manila – then this is knowingly condemning workers and their families to live in poverty. It’s greed pure and simple,” said Sharan Burrow.
5 recommandations for companies
The International Trade Union Confederation ITUC has set out five recommendations for companies to address the scandal of global supply chains:
- Supply chain– know whom you contract from and publish this;
- Safe work – inspect sites, fix hazards and recognise workers’ right to safety committees;
- Secure work – end short- term contracts;
- Minimum living wages – pay wages on which people can live with dignity;
- Collective bargaining – for wage share and decent wages and working conditions.
Global framework agreements
“The number of global framework agreements between multi-national companies and global union federations which address these problems and establish a sustainable footing for the global economy are on the increase, but we still have a long way to go. Governments must not neglect their responsibilities,” said Sharan Burrow.
Labour leaders at the World Economic Forum in Davos will be putting forward a four step plan to transform the business model of global companies and address inequality:
- Employers ensure fair distribution of wealth through minimum living wages and collective bargaining based on the fundamental guarantee of freedom of association;
- Safety standards are respected with workers in engaged in safety committees;
- Government leaders should implement and enforce the rule of law, mandating the due diligence that the UN Guiding Principles for Business and Human rights demand;
- Governments prioritise the dignity of the social protection floor for their people.
“Only by exposing the practices of these companies to consumers and citizens around the world will companies begin to take responsibility for their supply chains and follow the rule of law,” said Sharan Burrow.
This report was released on the eve of the World Economic Forum in Davos. Sharan Burrow, ITUC General Secretary is a co-chair of the World Economic Forum in Davos.
Publication date 05 02 2016