Labor and Employment

John Hosinski is the former senior program officer of the Africa department at the Solidarity Center. He is currently a freelance writer based in Paris, France. The rapid fall of Robert Mugabe and ascent of former ally Emmerson Mnangagwa stunned even those closely following the country’s long-running succession drama. The decisive end of the succession question caught many by surprise, including most Zimbabweans, who poured into the streets to celebrate the end of Mugabe’s thirty-seven year rule. The crowds on the streets testify to both the pent-up energy of people suffering through extended economic malaise as well as the much understood (if unstated) illegitimacy of Mugabe’s personal leadership. Decades of rigged and stolen elections, rampant corruption and nepotism, and outlandish propaganda clearly atrophied support for the nonagenarian president.  Though this is not a democratic transition, it’s clear there is rising public expectation that things will get better—particularly in terms of jobs. Managing the elevated expectations of the people will be a key test for Mnangagwa. He inherits the leadership of an economy that has barely managed to stay afloat. Zimbabwe likely lost over seventy-five thousand formal jobs annually between 2011 and 2014. Another thirty thousand were lost in 2015 and an estimated eighteen thousand in 2016. This decline highlights the country’s two decades of deindustrialization, when formal employment was curtailed in rail, industry, agricultural processing, and transport. This process has resulted in over 95 percent of the country’s citizens making their living through informal employment. These job losses, more than anything, withered what was once the country’s most viable democratic opposition, organized labor. With formal jobs and union membership in decline, it has been workers in the informal economy who not only help Zimbabweans survive economically, but have steadily become more organized and aggressive in their demands for economic access and rights. Street vendors and other informal workers, organized into membership-based organizations, embody both the entrepreneurial as well as associational traditions of Zimbabweans in the face of decades of downward mobility as well as the desire of people for more say.  Informal workers long garnered the negative attention of both Mugabe and the ZANU-PF. Seen as a base of democratic opposition, the government attacked informal workers in 2005’s Operation Murambatsvina (“drive out the trash” in Shona), razing informal markets and settlements and putting almost six hundred thousand people into immediate homelessness. In recent years, well-organized groups of street vendors have faced ZANU-PF authorities in Bulawayo and Harare in arguments over economic access and vendors’ rights, which were somewhat overshadowed by the public and media focus on succession infighting. These arguments often escalated to violent attacks on vendors and took on a more political tone, with Mugabe himself weighing in and threatening action. Zimbabwe’s informal economy is not only where most people earn their living but also where they spend their money and it is a critical link between urban and rural markets. Though President Mnangagwa faces a withered and splintered democratic opposition, a key test for him and his government will be how restive informal workers like street vendors and their associations fare in the coming years. The question remains whether these workers will have more access to formal jobs, rights, and economic opportunities, or whether Zimbabwe maintains an ossified, corrupt economy which only benefits the well-connected at the top.   

As families work tirelessly to increase their income, and nations drive ever harder to spur economic growth, it can be easy to overlook the fact that the secret to growth may be hidden in plain sight. Saudi Arabia realized it when trying to end its “addiction to oil.” It can’t transform its economy without a bigger labor force, and it can’t reach its workforce targets without including women. And so, amid broader political and economic upheaval — from multi-billion dollar mega projects to an anti-corruption purge that detained many of the country’s most prominent officials — Saudi Arabia’s bid to modernize its economy included the unexpected step of permitting women to drive. This is likely not the last groundbreaking announcement from the kingdom. Because until Saudi women can work, travel, file legal claims, and otherwise engage in public life without permission from their male guardians — their father or husband, sometimes even their son —the country won’t realize the economic potential of half its population. And this is just the tip of the iceberg for the region. Widespread legal and cultural barriers restrict how women participate in society, according to a new report by the Organization for Economic Co-operation and Development (OECD), costing the Middle East and North Africa billions of dollars a year in lost income. With only 21 percent of women employed (compared to 75 percent of men), the region has the lowest rate of women’s participation in the labor force. While women are more educated and skilled than they have ever been, few work in the private sector, fewer hold senior positions in any institution, and women-owned businesses tend to be informal, home-based enterprises with little opportunity to grow. Combined this means lower productivity: women generate only 18 percent of the region’s GDP, despite accounting for half the working-age population. The McKinsey Global Institute estimates that increasing women’s participation in the workforce to the same level as men could nearly double the region’s economic output, adding $2.7 trillion dollars to the Middle East and North Africa’s GDP by 2025. Why the disparity? The OECD recently documented dozens of discriminatory provisions in family and labor laws in Algeria, Egypt, Jordan, Libya, Morocco, and Tunisia that prevent women from contributing to their countrie’s economies. In Egypt, Jordan, and Libya, for example, women need the permission of their husbands or fathers to work, and in Libya, it is considered justification for divorce if a wife travels without her husband’s permission. Across the region, laws perpetuate unequal access to assets: Family property is usually in the husband’s name, and women cannot access it if they are widowed or divorced. In Tunisia, a female heir receives half as much inheritance as a male heir; in Jordan, a 2010 regulation tightened the procedures to transfer inheritance rights after countless women were pressured to waive rights to their full inheritance. And because they have fewer personal assets, female entrepreneurs have a harder time securing a loan through collateral. Labor laws restrict women’s working hours and the sectors in which they can work, thereby limiting the employment available to women. Libyan women cannot undertake work that is not “familiar with woman’s nature”; in Jordan, the Ministry of Labor determines from which industries and jobs women are prohibited. And then there’s enforcement: Women face sexual harassment when they travel to or are in the workplace, but judges and police across the region rarely punish the perpetrators of sexual assault. Research elsewhere has documented that legal reforms can directly lead to economic and social gains. Within five years of Ethiopia removing the stipulation that husbands could stop their wives from working, women’s labor force participation increased and women were more likely to work in higher-skilled jobs. When India provided women and men the same rights to inherit joint family property, families spent twice as much on their daughters’ education and women were more likely to have bank accounts. The relationship between how much freedom women have in their homes and how easily they can contribute to society outside the domestic sphere is linear. Until women are able to freely work, travel, and own property, reforms to business regulations or other strictly economic solutions will not be enough to decrease the gender labor gap. Countries with discriminatory laws will continue to lose out until they remove the barriers preventing half their population from contributing trillions of dollars to their economy. This piece appeared originally in The Hill.

I recently hosted a CFR roundtable meeting with Valerie Jarrett, senior advisor to the Obama Foundation, a board member of Lyft and Ariel Financial, and a senior advisor to the media company Attn. As one of President Obama’s closest and most trusted senior advisors from 2008 to 2016, Jarrett raised gender issues to the top of the agenda when she chaired President Obama’s White House Council on Women and Girls and oversaw the Offices of Public Engagement and Intergovernmental Affairs. While working in the Obama White House, Jarrett promoted policies like equal pay, a higher minimum wage, paid leave and sick days, affordable childcare, as well as international women’s human rights. Since leaving office, Jarrett has continued to champion women’s issues, for example in launching and co-chairing the Galvanize Program, which seeks to support women for leadership roles in political and economic life. As a new member of the board of directors for the ride-sharing app Lyft, Jarrett shared her perspective on how the gig economy can benefit women as both employees and passengers of the company. As for the software side of the gig economy, it is well known that women are under-represented in science, math, engineering, and technology—or so-called STEM jobs. As I noted in a CFR report I co-authored last year—“Women in Tech as a Driver of Economic Growth”—training more women to undertake such jobs could help close the gap in the shortage of skilled workers in the tech sector. While that report focused on low- and middle-income countries in information and communication technology, women are also under-represented in the tech sector in affluent countries such as the United States. Lyft itself issued a diversity report indicating that, though 42 percent of its total workforce identifies as female, only 18 percent of its tech team does. According to tech publication Recode, this may be comparable to—or even slightly better than—women’s representation in tech and engineering jobs at other ride-sharing services. Women and people of color appear to be underrepresented not only in jobs at the well-known ride-sharing app companies, but also at big tech companies, such as Google. The same is true of science and engineering jobs more broadly. The National Science Foundation found that, while there is gender parity in educational attainment in science and engineering, the same is not true of employment in the field. Only 18 percent of computer science employees are women, for example. And Blacks, Latinos, and Native Americans are underrepresented in both education and employment in science and engineering. As for the percentage of drivers who are women, while only twelve percent of taxi drivers nationally are women (and only one percent of cabbies in New York City), Jarrett noted that 27 percent of drivers at Lyft are women.  One survey indicates some evidence to suggest that women who drive for ride-sharing apps may earn less than men—by nearly $2 an hour—in part because women are less likely to drive peak shifts late at night on Fridays and Saturdays. One theory is that women have safety concerns about driving strangers late at night. In response to concerns about safety for female drivers and passengers, there has been a steady rise in women-only ride-sharing apps, like Safr and See Jane Go. Other countries, like India and Germany, have instituted women-only train cars. Mexico City and Jerusalem have some gender-segregated buses—motivated, respectively, by concerns about sexual harassment and by ultra-orthodox religious views concerning the mingling of men and women. Are women-only transportation options a step back—towards self-segregation or even forced segregation? Jarrett acknowledged the problem of women’s safety and discussed some of the ways in which ride-sharing services are addressing it—like the accountability provided when such ride-sharing services display a photo and the license plate of the driver. She noted that technology can be used in innovative ways to address safety concerns in this sector. The benefits for women in the gig economy include flexibility and having greater control over working hours. Drawing on her own experience of raising a daughter as a single mother, Jarrett underscored how critical such flexibility can be. The inevitable trade-off in the gig economy, however, is that flexible hours often come with less job stability, inherent in the reality of being a contingent worker. Collecting data and maintaining transparency is critical to closing the pay gap and addressing other workforce issues, Jarrett noted. She told a story about Salesforce. Two female employees approached the CEO Marc Benioff and told him that they didn’t make the same amount as their male counterparts. Benioff, known as a champion of corporate values, was surprised. He checked the numbers, found that the two women were right, and worked to close the pay gap. In STEM jobs, the issue is not just about hiring, but also about retaining women in these jobs. Women stay on average three years in computer science fields, Jarrett pointed out. The number one reason why they leave: culture. The first step to changing this culture, Jarrett implied, is to collect the data that identifies the real issue. Having women in leadership positions within a company (and on the boards of such firms) is important to changing this culture. Maiya Moncino assisted in the preparation of this post.

A third lightning round of North American Free Trade Agreement (NAFTA) talks begins in Ottawa on September 23. Negotiators reportedly made progress during the first two go-rounds in Washington and Mexico City, reaching tentative agreements on intellectual property, e-commerce, and environmental protections, likely following the general outlines hammered out within the Transpacific Partnership agreement, or TPP. Yet the thornier issues – investor dispute settlement options, rules of origin, Buy American clauses, and importantly labor rules and wages – remain. And even as trade negotiators met in round-the clock sessions to get these initial breakthroughs, U.S. President Donald Trump revived his public existential threats, saying he will end up “probably terminating NAFTA at some point.” Commerce Secretary Wilbur Ross chimed in that ending the agreement is “the right thing” to do if the United States doesn’t get what it wants by the end of the year. Trump, along with many Americans, condemns NAFTA for taking jobs. The president repeatedly asserts Mexico is “killing us on jobs and trade” and NAFTA is “a one-way highway out of the United States.” Average Americans echo these fears. In 2016 two out of three Americans believed globalization was good for the overall economy and country, but only forty percent thought it created employment and just one in three thought it protected jobs already here. NAFTA is viewed with particular skepticism, with nearly half of Americans believing the United States got a bad deal. The facts belie these perceptions. The non-partisan Congressional Research Service, reviewing dozens of studies conducted over the last twenty years, found that the trade agreement has had little to no effect on net employment in the United States. Yes, jobs were lost, as others were gained, leading to a net wash. And while these transitions are undoubtedly hard for individual workers, NAFTA-inspired job losses (leaving aside the new positions created by more trade) accounted for less than 1 percent of the nearly 18 million positions eliminated every year. These limited effects reflect the fact that even at $1.2 trillion dollars, North American trade represents just 6 percent of the U.S. economy. In the larger worry over jobs, the United States should be commiserating rather than condemning its southern neighbor. A recent International Labour Organization (ILO) report shows that Mexican workers, like their U.S. colleagues, suffered the most from Chinese competition, not each other. Over the last two decades, Mexico lost nearly 650,000 net jobs to the Asian giant, as textiles, shoes, and computer factories shuttered in the face of cheap imports or as management moved operations across the Pacific. The United States, according to estimates by scholars David Autor, David Dorn, and Gordon Hanson, lost 2.4 million jobs to China over a roughly similar period. Per capita this represents 11 of every 1,000 workers in Mexico, and 14 per 1,000 workers in the United States... View full text of article, originally published in Americas Quarterly.

The challenge of how to help those left behind by rapid economic change—whether caused by technology or global competition—has moved to the center of the U.S. national debate in a way it has not been since the 1930s. Trade competition, especially from China, was a significant factor in the disappearance of nearly six million U.S. manufacturing jobs in the 2000s, and President Trump’s criticisms of U.S. trade policy helped him to victory in November in the Rust Belt states of Michigan, Pennsylvania, Ohio, and Wisconsin. Despite the White House focus on the issue, however, trade is only a small part of the disruption. Retail industry employment is rapidly shrinking in competition with Amazon and other online retailers, self-checkout machines continue to replace cashiers, and autonomous vehicles will soon come to replace truck and taxi drivers. Technology will leave few segments of the labor market untouched: new computer programs are already replacing some forms of entry-level legal work and investment planning, while machines with rudimentary artificial intelligence capabilities are already writing basic news stories. In our new Renewing America Discussion Paper, "A New Deal for the Twenty-First Century," we argue that the central economic policy challenge for the United States and other advanced economies is how to prepare the workforce to manage this rapid pace of change. It is far from obvious that there will be a shortage of work—indeed as the population ages, some countries in Europe are already struggling to fill available jobs, and American companies are complaining of growing labor shortages. The problem will instead be to ensure that the workforce is prepared to fill the new sorts of jobs that will become available as consumers redeploy their savings from automation into spending on other goods and services, and that the labor market and public policy are working together to create rising living standards for more Americans. Young people starting careers should be equipped with the education and skills needed to adapt to multiple job and even career changes over the course of their lives. Older displaced workers will need help to find new jobs, and often alternative careers, that can put them back on a path of rising incomes. There is no other issue on which it is more urgent that Republicans and Democrats find a way to come together than on a “Twenty-First Century New Deal” that helps more Americans find decent work in a time of rapid economic change The worrisome alternative is that Americans will embrace a still more radical politics that threatens to compound the damage. Already, both parties are flirting with populist “quick fix” remedies. President Trump walked away from the Trans-Pacific Partnership trade agreement—which would have helped many of the most competitive U.S. industries—and is calling for a “massive” renegotiation of the North American Free Trade Agreement (NAFTA) with Mexico and Canada. He has threatened to impose reciprocal tariffs on imports that would raise prices on a wide variety of goods, disproportionately hurting low-income consumers, and inviting retaliation that would harm successful U.S. exporters. The Democrats have their own quick fix myths. With most in the party having rejected NAFTA and other trade deals, Democrats will hardly be in a position to criticize any new trade protectionism, even if it backfires. One staple of progressive Democrats is the proposal to double the federal minimum wage to $15 per hour, which would boost the wages of some lower-income workers. But such a large jump in the minimum wage nationwide would discourage hiring workers, while encouraging an even faster adoption of automation that would eliminate even more retail and service jobs. Railing away at large banks or the top one percent, however justified, provides good applause lines but does not address the workforce challenge the country faces. A bipartisan new deal would instead be premised on helping individuals to acquire the education and skills they need to prosper in a fast-changing economy. Washington needs to step up by doing far more to help finance mid-career education and retraining, to remove impediments in the economy that discourage workers from moving to better-paying jobs, and to assist those who are forced to take a significant wage reduction. These propositions should make sense both to Republicans, who stress personal responsibility and hard work, and to Democrats, who believe as well that government has an obligation to offer a helping hand. The approach would have three pillars: First, Congress should establish lifetime career-training loan accounts for all citizens. These accounts could be used for courses at qualified providers of certificate programs, at community colleges or other educational institutions. To prevent rip-offs, loans could be used only to attend schools that regularly report, subject to audit, their permanent job placement rates. Loans could also cover some temporary income support. Importantly, like many college loans today, repayments of career-training loans would be tied to a percentage of future income. Those who find high-paying jobs would be expected to repay the full loan amount, while those who earn less would repay less. The cost to taxpayers would be modest—the estimated subsidies for income-contingent college loans, for example, is roughly $75 billion for more than five million borrowers over the first two decades of the program, less than $4 billion annually. And that number does not take into consideration the additional tax revenues that will result when many individuals are re-employed at higher salaries. Secondly, governments at both the federal and state levels should do more to help Americans move from regions where jobs are being lost to regions where they are being created. The movement of workers from state to state, once a vaunted feature of the flexible U.S. labor market, is falling. High-wage job growth is increasingly clustered in faster-growing cities, and the U.S. workforce has become less mobile. Government is doing little to help. The Trade Adjustment Assistance program, for example, which assists workers who lose their jobs to trade competition, includes financial support for relocation. But that program only covered 58,000 out of the nearly 8 million people who were unemployed in 2015, and the relocation grants are small, covering only 90 percent of moving costs and a lump sum of just $1,250. Aid for relocation should be universal and more generous, helping all displaced workers who need to relocate to find employment.There are other barriers to labor mobility that should be tackled as well. Occupational licensing is much too restrictive, affecting roughly one-quarter of all jobs in 2016, up from just 5 percent in 1970, according to the Council of Economic Advisers. Many states do not recognize credentials earned in other states. While national certification has gained some ground among teachers, for example, most states require a new certification every time a teacher moves from another state. Such regulatory restrictions are a needless burden on people trying to make a better life for themselves. Third, the reality is that re-training is not going to be attractive or successful for all displaced workers, especially those reluctant to move to where better jobs exist. But the government can play an important role in helping these workers get back into the labor market, even if the new jobs pay significantly lower wages than previous ones. This can be done through wage insurance, which since 2002 has been available to only a small slice of American workers: only full-time employees over the age of fifty with pre-displacement incomes up to $50,000 who can prove their jobs were eliminated by trade. This program should be made universal.In 2016, the Congressional Budget Office (CBO) estimated the current annual cost at just $3 billion; even a huge expansion in wage insurance would not come close to what Washington is now paying people not to work. For example, the percentage of workers receiving Social Security Disability (SSDI) benefits has nearly doubled since 1990; even accounting for an aging workforce, the additional cost to taxpayers for is nearly $50 billion for what has for too many become a permanent unemployment benefits program. Wage insurance, in contrast, rewards responsibility and hard work because, unlike unemployment insurance, it only kicks in when a worker accepts a new job paying less than his or her previous one. Much like the last time that economic nationalism reared its head in the 1920s and 1930s, with damaging consequences that worsened the lives of most Americans, what is needed now is a new set of policies that lift Americans, without harming the United States’ economic relations with the world. But for either or both parties to embrace this twenty-first-century deal, they need to shed some of their old shibboleths. For Republicans, it is a way to turn Trump’s rhetorical commitment to the well-being of the working class into actual measures that can help better their lives. So far, the president instead seems to be forgetting those election promises and turning again to the long-standing GOP agenda of cutting taxes on the wealthy and hoping the benefits trickle down. For Democrats, our suggested approach would be a more effective way to help working Americans than the set of policies the party pushed during the last election: the expensive promise of free college education, a nationwide fifteen dollar per hour minimum wage, and opposition to more trade deals. The goal should be to provide what Americans—especially those who feel left behind by technology, globalization, and the rapid pace of change—have made it clear they want: new opportunities for decent, well-paying jobs of the sort that were once well within reach.

This article was co-authored with David Brady, Deputy Director and Senior Fellow at the Hoover Institution and Professor of Political Science at Stanford University. MILAN – US President Donald Trump owes his electoral victory largely to the older white middle- and working-class voters who have missed out on many of the benefits of the economic-growth patterns of the last three decades. Yet his administration is preparing to pursue an economic program that, while positive in some respects, will not deliver the reversal of economic fortune his key constituency was promised. Trump gave voice to a group of voters who had long faced worsening job prospects and stagnant or even declining real incomes – trends that have accelerated since 2000. As the number of middle-class jobs fell, the middle-income group shrank, exacerbating income polarization. This phenomenon, while particularly severe in the United States and the United Kingdom, can be seen in various forms throughout the developed world. The economic challenges facing developed-country middle classes are largely the result of two factors: the rapid loss of white- and blue-collar routine jobs to automation, and the shift of middle and lower value-added jobs to countries with lower labor costs. The latter pattern depressed income and wage growth not only in the tradable sector directly, but also in the non-tradable service sectors, owing to the spillover of displaced labor. The result was surplus labor conditions in the middle- and lower-middle-income ranges, not dissimilar to the surplus labor in early-stage developing countries, where it suppresses income growth (for a period of time) even as the economy expands. A decline in the bargaining power of labor and a falling real minimum wage may have also contributed to income polarization, though these are probably secondary factors. Though the challenges facing the middle class are well documented, US leaders have largely failed to recognize fully the struggles of middle-class households, much less implement effective countermeasures. This has contributed to a growing sense of hopelessness – particularly among men – which has manifested in rising non-participation in the workforce, aggravated health problems, drug abuse, elevated suicide rates, and anti-government sentiment. Countries that experience high and rising economic inequality often face political instability and policy dysfunction. As policymaking becomes erratic, loses credibility, and becomes choked by gridlock, growth suffers, and the chances of achieving a prosperous form of inclusiveness decline. The result is a vicious circle, in which government finds it increasingly difficult to do what is needed. But government intervention is crucial to tackle the problems facing developed-country workers today, which markets can’t address alone. Whether by renegotiating trade arrangements, investing in infrastructure and human capital, or facilitating redistribution, government must work proactively to achieve a rebalancing of growth patterns. The Trump administration now faces at least two major challenges. The first is to steer the political process away from paralyzing polarization, toward some vision of an achievable and more inclusive growth pattern. The second challenge – conditional on achieving the first – is to respond to the legitimate concerns of the voters who helped Trump reach office. On the first challenge, the signs so far are not encouraging. The electoral process is essentially a zero-sum game for the participants. But governance is not a zero-sum game. Treating it that way produces gridlock, political fragmentation, and inaction, undermining efforts to address critical challenges. To be sure, elements of the Trump administration’s proposed economic policy, if implemented, would surely have a positive impact. For example, with the support of a Republican-dominated Congress, the Trump administration could finally be able to end America’s excessive reliance on monetary policy to support growth and employment. Moreover, the public-sector investment in infrastructure and human capital that Trump has promised, if properly targeted, would raise returns on – and thus the level of – private-sector investment, with tax and regulatory reform providing an additional boost. Some renegotiation of trade and investment agreements could also help to redistribute the costs and benefits of globalization, though any changes should fall well short of protectionism. And the impact of the Trump administration’s economic policies is likely to be buoyed by the economy’s natural structural adaptation to technological development. But this will not be enough to combat the forces that have been squeezing American workers. Even if the Trump administration manages to boost economic growth, thereby diminishing the “surplus labor” effect and generating jobs, the labor market will struggle to keep up. At a time of rapid and profound technological transformation, the US also needs a strong commitment from the public and private sectors to help workers adapt. A useful first step would be substantially increased support for training, retraining, and skills upgrading. In his book Failure to Adjust, Ted Alden, a fellow at the Council on Foreign Relations, observes that the US spends just 0.1% of its GDP on retraining, compared to 2% in Denmark. And Denmark and its Nordic counterparts seem to have done better than most in balancing imperatives like efficiency, dynamism, structural flexibility, competitiveness, and economic openness with the need for social-security systems that support adaptation to a shifting employment environment. Furthermore, some income redistribution will be needed, in order to enable low-income workers to invest in themselves – which is impossible when they have just enough to cover their basic needs. Here, conditional cash transfers for training and skills acquisition could be beneficial. Universal access to high-quality education is also critical. Right now, when some part of the US educational system fails, the well-off bail out to the private system, and the rest are left behind. That’s individually rational, but collectively suboptimal. Indeed, without high-quality education at all levels – from preschool through university or the equivalent professional training – it is nearly impossible to achieve inclusive growth patterns. Finally, the Trump administration should rethink its proposed deep cuts to funding for basic research, which would undermine innovation and economic dynamism down the road. While weeding out less promising programs is certainly acceptable, as is fighting vested interests, the money saved should be redirected to more promising areas within the sphere of basic research. The Trump administration’s current economic plan may be pro-growth, but it is incomplete on inclusiveness. Shifts in trade policy cannot be depended on to rebalance growth patterns in favor of middle- and lower-income households. They may even pose a risk to growth. This article originally appeared on project-syndicate.org.

Global trade and the supply chains that support it are undergoing a period of profound change. Supply chains face threats including a resurgence of protectionism, climate change, decaying infrastructure, and human rights abuses. The Development Channel’s series on global supply chains will highlight experts’ analysis on emerging trends and challenges. This post is from Beth Keck, a member of the Council on Foreign Relations and practitioner in residence at The Johns Hopkins University School of Advanced International Studies. She was formerly senior director of women’s economic empowerment at Walmart Stores, Inc.  As global supply chains have proliferated, so too have efforts to enhance good business practices within them. The most recent experiments involve multistakeholder and multi-sector organizations that try to address the deficits of government and individual company approaches. For decades governments have issued laws and regulations to set labor and environmental baselines. Coming out of the 1930s, the United States passed landmark fair labor regulations banning child labor, setting a minimum wage, and capping workers’ hours.  Today regulations in the United States and beyond encompass everything from installing emergency exits to disposing of toxic dyes.  But national laws rarely transcend borders, rendering them ineffective in our world of transnational production. In supplier countries such as China and Bangladesh, there are huge gaps in regulatory oversight. Too many governments still lack the capacity, and sometimes will, to ensure compliance with their own laws. And although 187 countries belong to the UN’s International Labor Organization and endorse its worker standards, the international body doesn’t have the power to enforce its norms. With the spate of news stories about poor working conditions in developing country factories—which did serious damage to some brands’ reputations—companies began to police their own behavior. The first impulse was for retailers and brands to develop their own environmental, health, and safety factory audit programs. While well-intentioned, this quickly resulted in many sets of overlapping standards and requirements, as well as confusion and inefficiency for manufacturers. For instance, a textile factory in Dongfang, China, could in any given month be manufacturing shirts for Lacoste, Hanes, and Fruit of the Loom for sale in Marks and Spencer, Walmart, Sears, and Tesco. Each brand and retailer would audit the factory, using a different checklist and asking for different data. Factories hired compliance staff fixated on managing visits and pulling payroll forms and timesheets. There was little time left to focus on training and other investments that could improve workers’ wellbeing. These individual company programs quickly created audit fatigue and increased costs. And they tended to focus only on final assembly factories, missing problems hidden deeper down the supply chain. In response, companies began working with human rights advocates, academics, and others to improve and streamline audit programs with industry-wide schemes emerging. In 2000 the American Apparel and Footwear Association backed a new independent nonprofit to identify and reduce sweatshop conditions in apparel and footwear factories. Three years later the toy industry got behind its own protocol specializing in workplace audits and standards for its factories. With still many disparate audit systems, some of the world’s largest retailers collaborated to create a single harmonized set of standards that apply to many sectors rather than focusing on just one industry, to oversee everything from toys to towels. The Global Social Compliance Programme, started in 2006, brought together dozens of apparel, food and beverage, and other consumer goods companies to cut back on repetitive, inefficient audits through sharing results and best practices. These efforts have helped improve worker protections, particularly in the first tier factories that hold contracts with global brands, suppliers and retailers. But the Rana Plaza collapse in Bangladesh, which killed over 1,000 people, was a reminder of unfinished business. Academic studies show better factory conditions improve productivity and profits. Now companies and governments need to go beyond factory inspections and traditional compliance to educate owners and managers on how ensuring workers’ rights and safety boosts a factory’s bottom line.