Ratcheting Labor Standards: Regulation for Continuous Improvement in the Global Workplace
Author(s)
Sabel, Charles; O’Rourke, Dara; Fung, Archon
Abstract
Ratcheting Labor Standards (RLS) is a regulatory alternative that aims to improve the social performance of firms in the global economy. Under RLS, firms disclose to a certified monitor, information on their social performance, minimally including working conditions, hours, and wages. The monitors rank firms on the basis of their current social performance, and their rates of improvement, and make these rankings, and the methods on which they are based, accessible to the public. This process, it is argued, encourages leading firms to strive towards superior social practices. Competition among firms, and monitors will help establish two kinds of standards: ” best practices ” defined by the most advanced firms, and ” rates of improvement ” , shown to be feasible at various levels of development. Both continually ” ratchet ” upward as the best practices get better still, and firms find ways to accelerate improvement, in a race to the top. These, and other RLS mechanisms, would create incentives for firms to dedicate a portion of the ingenuity, and resources now devoted to product development to the continuous improvement of labor practices.
