The international standards as set by the United Nations state: “Wages and benefits paid for a standard working week should meet at least legal or industry minimum wage standards and always be sufficient to meet the basic needs of workers and their families and to provide discretionary income.”
It clearly states that basic living conditions should be considered while setting up wages for the labors as per international standards. The benefits of the above are:
This will preserve the workers’ right for a healthy living condition
It also benefits the suppliers in two ways:
Enhances supplier competitiveness
Increasing wages will boost standard of living and economic growth in the respective countries of the suppliers which would only be beneficial for the suppliers in the long run.
If the workers’ conditions in the factories are improved, it will contribute towards social responsibility and companies would acquire goodwill in society
This would create a positive image in the mind of customers and would lead to improvement of customer relations and eventually lead to increase in sales
Additionally, increase in wages means increase in purchasing power of the low-wage workers, this money will flow into the market and ultimately go into the kitty of various other companies
So yes, we believe companies like Gap Inc. should ask their suppliers to pay more than industry standard when it is insufficient to live on so that the workers are able to meet the basic living conditions and this would be a win-win situation for all the stakeholders.
We also think that the case study discusses a lot of ethical dilemmas that are