PUMA, New Era and Maxport worked with the Fair Labor Association over three years (2017-2019) to identify and address root causes of low wages and long hours with facilities in China and Vietnam. Suppliers replaced or adjusted insufficient piece-rate systems, allowing workers to earn higher base wages and diversified bonuses rewarding skills, quality and productivity. Workforce training and engagement ensured feedback was integrated into new systems.
Improved buyer practices included improved sampling, improved communication internally and with suppliers, systems to include new minimum wages and social security benefit increases in pricing, product life-cycle management systems to track order placement and lead times. New Era increased communication with their Chinese contract factory about production capacity and upcoming orders. In Vietnam, the Maxport Limited production facility engaged with trade union representatives and modified worker performance-based incentives, changed its production planning schedule to a shorter workweek, built-in time for unanticipated delays, and set stricter procurement guidelines for its customers, considering local cost of living alongside business factors, to enable increases in real wages for workers. The results were that net wages increased from 29% to 57%, enabling workers to earn a living wage without working overtime.
Note from ILO – It should be noted that efforts to realise wage improvements are best sustained through a process of social dialogue between workers and employers. More information the ILO position on wages can be found here.