Global value chains have created many opportunities and many problems. On the one hand, off-shoring production to countries where labour is cheaper while retaining research and design in high income countries really did produce an opening for developing countries to grow an industrial base.

China is the most impressive example of this effect and has by now moved up the value chain a good deal. On the other hand, if labour cost is one of the chief criteria, the international division of labour runs a risk of permanently depressing wages in low income countries, even to the point where a regular income is not enough to live on. The challenge is to balance the different aspects of international labour division in such a way that everybody gets a fair share out of it.

GSN Electronics (Shenzhen) has therefore adopted, a Living Wage scheme which provides not only skilled office staff but also mostly unskilled assembly workers with a fair opportunity to earn a regular monthly Living Wage of at least RMB 3,600 without any overtime work – during a regular 5-day work week of 40 hours with 2 full days rest on the weekend.

The GSN Living Wage refers to the Living Wage report for urban Shenzhen estimated by the Global Living Wage Coalition. As a result, GSN employees in Shenzhen receive a number of benefits that are, sadly, not the norm. These include a Living Wage, full social insurance including a housing allowance, continuous training, regular working hours, fully compensated overtime and an overtime maximum of 9 hours per week. 15 days of paid annual leave are also a part of the package, as are an additional 10 days of paid annual “See Your Child” leave for migrant workers who left their child behind in their hometown. As a result, workers at GSN appear to be happier, work better in teams, are more focused and more productive at work and are loyal to the comany. Worker retention,a perennial problem in China, is not an issue at GSN.