Description
While multinational corporations tend to influence global value chains most through their governing power, the importance of sovereign states are also pointed out lately. The global garment industry is a big employer in labor-intensive industries and in countries and regions, where cheap labor is accessible. Furthermore, the examination of social upgrading is crucial. Countries on Europe’s Eastern periphery are subcontractors to mainly Western-European multinational fashion corporations. Meanwhile, sweatshop-like conditions can occur in the region and differences between minimum and decent living wages tend to be even bigger, than in Asia. The author states that policymaking on the nation-state level even have a bigger role in shaping social upgrading. The paper explores the importance of policymaking on the social upgrading opportunities of garment workers in Hungary through qualitative research methods, such as document analysis and research interviews. The findings show that high tax and associated costs, related to labor intensive sectors squeeze employers, who often employ workers without proper contracts. The ‘practice of norms’ allows employees receiving even less than the national minimum wage. The ‘flexible working hours’ legal regulation allows the transfer of overtime in peak seasons to months, where the firms suffer from the lack of orders.
