It’s no secret that garment workers are largely underpaid, making poverty wages working for fashion companies around the world — but it doesn’t have to be this way. Ensuring living wages for all makers and humans in the supply chain must be a priority for the fashion industry.
Guaranteeing a living wage shouldn’t be asking too much — yet, an estimated 98% of garment workers don’t earn a living wage, according to ethical fashion brands Nisolo and ABLE. [Cover image is from ABLE’s Wage Campaign page.]
And Clean Clothes Campaign’s Tailored Wages 2019 Report found that 19 of 20, or 95%, of brands surveyed, could not show evidence of paying living wages to any makers. Only one brand, Gucci, could prove that they paid living wages to some percentage of the makers (which were all in Italy) in their supply chain.
Finally, consider this: it takes just four days for a CEO from one of the top five fashion brands to earn as much as a garment worker in Bangladesh earns in her entire lifetime.
So how do we ensure the most vulnerable in the supply chain are actually earning wages that they can live on? Let’s dive in.
What is a Living Wage?
Before we get too far in, we should discuss what exactly a living wage is.
But first, let’s talk about what a living wage is not, which is an area’s minimum wage.
A country or city’s minimum wage is usually not enough to actually live on in most places in the world — in countries like the US or in major garment-producing countries like Bangladesh.
Clean Clothes Campaign found that a living wage in India would be 2.8 times what the minimum wage is in the country and a living wage in Bangladesh would be 4.8 times the minimum wage there.
Labour Behind the Label interviewed workers in Sri Lanka who reported that they worked 10 to 12 hours a day, sometimes working 100 hours overtime per month. Despite working up to 40 hours more per month than what is even legally allowed, workers did not earn living wages. They were being paid an average of just £3.23 per day and many shared a small (3×3 meters) apartment with multiple other workers and 75% reported that they did not have access to a tap or running water and had to use a shared outdoor bathroom.
And a group of garment makers in India who were interviewed earned 6,284 rupees ($92) per month on average but reported that they would have to be making at least 13,000 rupees ($190) — or more than double their actual wages — to cover basic necessities.
So, if a minimum wage is not a living wage, what exactly does a living wage entail?
A living wage is supposed to ensure that employed individuals earn an hourly wage or salary that actually enables them to afford necessities while working a reasonable workweek, taking into account the cost of living in that area.
Global Living Wage Coalition (GLWC) has taken over 60 definitions and descriptions of a living wage and put it into one concise definition. According to GLWC, a living wage is:
“Remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transport, clothing, and other essential needs, including provision for unexpected events.”
How Do You Calculate a Living Wage?
For the US, there’s the MIT Living Wage Calculator and in Southeast Asia, there’s the Asia Floor Wage Alliance, which shares their methodology here.
There’s also an organization called Wage Indicator that publishes country-by-country living wage calculations each month based on the cost of living in that area.
And then there’s the Global Living Wage Coalition, which is is a group of multiple organizations, like Fairtrade International, GoodWeave International, and Social Accountability International, that have joined together to calculate, publish, advocate for, and implement living wages around the world. They’ve calculated wages for 21 countries so far.
Is a Living Wage an Ethical Wage?
The effort and research put forth by organizations like the Global Living Wage Coalition is a massive stride in the right direction and there is a lot we can work with within the current living wage standards.
But determining and paying a living wage can still be an ethical dilemma.
This is all to say that setting any sort of living wage means that you have to determine a standard of living — which inherently, is a moral question.
As TelaStory founder Hannah Neuman put it in her Telastory Living Wage Course, “at the very core of setting a living wage is the question, what quality of life does a seamstress deserve to have? That’s really the choice we’re making when we’re setting the living wage.”
So, defining a living wage is not necessarily an end goal, but one that will continually evolve and require inclusive discussions and negotiations. That said, the majority of garment workers are not even earning a baseline living wage — a problem that the rest of this post will be dedicated to addressing.
Why Are Brands Not Paying Living Wages?
There are a few common objections (or really, excuses) from brands for not paying living wages, which I’ll break down below.
EXCUSE 1: Brands say paying higher wages would increase their costs and consumers want cheap clothes. It might be convenient for brands to put the onus on consumers, but the reality is that labor is just a fraction of a brand’s overall costs and would likely not meaningfully increase the prices of individual garments.
Clean Clothes Campaign calculated that wages for garment production are rarely more than 3% of the final retail price of a garment.
And a report from Oxfam found if brands paid garment workers living wages in the supply chain, it would increase the final cost of a piece of clothing by just 1%.
Or, it might not even have to increase costs at all for the final customer if the brand was willing to reprioritize.
Fast fashion retailers have profit margins of 16% — more than double what other apparel stores bring in (7% on average) and the industry has produced some of the richest men on earth.
At the time of publishing, Zara founder Amancio Ortega is one of the richest men in Europe with a net worth of $68 billion and H&M co-owner Stefan Persson is Sweden’s richest man with a net worth of $18.5 billion.
Labour Behind the Labor calculated that if H&M paid all of its garment workers in Cambodia a living wage, it would cost them just 1.9% of their annual profits.
And Oxfam reports that “it would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers from the average wage to a living wage. This is the equivalent of a third of the amount paid out to shareholders by the top five companies in the garment sector.”
TL;DR: It’s not about the money not being there to pay garment makers living wages — it’s a matter of priorities.
EXCUSE 2: Brands say that it’s too difficult or cumbersome to calculate a living wage. As we illustrated above, there are plenty of resources available for calculating a living wage. And if there isn’t a resource available for a particular city, brands can simply survey workers and calculate averages.
EXCUSE 3: Brands put the blame on factories for not paying living wages. The reality is that in an effort to reduce costs and increase their profits, many brands aggressively negotiate with factories to produce their garments for as little as possible, forcing a race to the bottom among factories in a particular area.
As Oxfam explains, buyers “often apply a practice called called ‘underground bidding’ to find the cheapest garment manufacturer. This involves buyers using the quoted prices of one factory to get another factory to lower their price. Buyers then choose the factory that commits to the fastest turnaround and the lowest price. This pushes down wages and working conditions.”
And as one factory supervisor put it, “at times, buyers offer less than
the production cost, the owner takes the order to run the factory, [so] how will the owner give more to the workers?”
Another factory owner was quoted as saying, “Increasing the prices [paid by brands to factories] is the ultimate way to increase workers’ wages. Owners have reached [their] bottom price… I support the campaign to establish buyers’ contributions to increasing workers’ wages. Otherwise, the day-by-day profit is shrinking. That’s why owners are taking orders and even incurring losses.”
What’s important to note here is that brands hold the power in this relationship as the buyers. While brands may not always know if a factory is paying living wages or not, it should be part of a brand’s due diligence to ensure this is the case. And just as brands pressure factories for lower prices, they can pressure factories to provide transparency into costs of production (material costs vs. overhead costs vs. labor costs, etc.) to ensure factories are paying living wages.
While H&M has a long way to go to ensure ethical production, the brand’s efforts may prove that it is, in fact, possible for brands of this size to take action on living wages. (Not that we really believed it was ever impossible to begin with.)
Hendrik Alpen of H&M shared the approach in Fashion Takes Action’s webinar, Putting People First in Fashion’s Supply Chains, “one important point is [that brands should] isolate labor costs from price negotiations.” He also emphasized that “it is not impossible to achieve living wages, but I think we have to do it in the right way. The ‘right way’ in my view is to create collective bargaining systems that bring suppliers, workers, with a component of responsible purchasing practices [from brands] together with governments on proper regulatory and systematic feet.”
We’ll see if H&M actually takes action on this (not holding my breath), but I think this is an interesting approach to highlight.
Solutions for Paying Living Wages
Now that we understand what a living wage is, why it matters, and have proven that it is indeed more than possible for brands to pay living wages… how do we get there?
Brands Must Take Action
Oxfam has a great overview of what actions brands need to take to ensure their makers are earning living wages.
- Adopt basic human rights practices. Be transparent about suppliers, allow workers to organize and consult with unions and worker representatives, and develop mechanisms to deal with human rights abuses.
- Develop a specific living wage roadmap. Not only should brands make a meaningful commitment to paying living wages and consult unions and worker representatives along the way, but they should have some accountability built in to ensure they actually achieve these goals.
- Regularly report on progress. Brands have failed to deliver on living wage promises before (looking at you, H&M) and so engagement with governments, industry associations, and the public is crucial.
Brands leading the way on the living wage front are ABLE and Nisolo, who have launched the Lowest Wage Challenge. These brands are publicly posting the lowest wages they pay in their supply chain to push for a new level of transparency in the industry.
Christy Dawn is also a leading brand on this front, offering full transparency into the costs of their garment production on their website.
Another approach for ethical brands is to work with worker-owned co-operatives, which puts the power back in the hands of workers. In these models, workers can lead the way, setting their own wages and determining standards for working conditions. Raven + Lily is a brand that uses this model.
Governments Must Take Action
Commitments from brands without legal teeth or legal accountability can only go so far. So, governments must also step in. Oxfam outlines the following recommendations:
- Create a national action plan on business and human rights based on the UN’s Guiding Principles on Business and Human Rights. There are many countries that have developed action plans, including the UK, Netherlands, Germany and Norway.
- Require large companies to report on how they’re dealing with human rights risks — including risks of not paying living wages in their supply chains — by law and introduce penalties for non-compliance.
- Invest in educating companies on human rights’ responsibilities.
- Promote discussion and action for labor rights in international forums.
Remake’s Pay Up Fashion campaign also offers actionable steps that brands can take to encourage governmental action on these issues — instead of trying to prevent legal reforms. Their calls to action include:
- “Legal reforms in buying and supplying countries that hold brands and retailers responsible for human rights violations in their supply chains.
- Reforming bankruptcy protocols to protect garment workers when suppliers are forced out of business.
- Reforming government bailouts to shore up garment worker protections. The current system where brands shore up their own balance sheets and rely on public monies for bailouts must be corrected.”
What Actions Are Being Taken?
When it comes to getting Western fashion companies to take responsibility for global labor abuses, the EU is leading the way.
According to Vogue Business, Raphaël Glucksmann, vice-chair of the Subcommittee on Human Rights of the European Parliament, “is working on an EU legislative initiative that would make human rights and environmental due diligence mandatory for companies through their entire supply chain, based on a duty of care, which is a legal obligation to adhere to a standard of reasonable care. In effect, a European parent company will be legally liable for the failure of due diligence not only in its owned operations but on all levels of the supply chain no matter where they are in the world.”
At the time of Vogue Business’ publishing, the legislation was slated to be voted on in December 2020. Time will tell what comes of the proposed laws, but the framework is certainly in the right direction for cleaning up the fashion industry’s vast human rights abuses and protecting the most vulnerable in the fashion supply chain.
What We Can Do
First and foremost, if there is relevant legislation being voted on in your area, advocate for worker rights and for increased corporate accountability. Two examples are the Garment Worker Protection Act in Los Angeles, CA and the EU Mandatory Human Rights Due Diligence Legislation in the European Union.
Be an ambassador and advocate for the makers of your clothes. Support Remake and their PayUpFashion campaign.
Commit time or money to a garment worker advocacy organization, like Asia Floor Wage Alliance, Clean Clothes Campaign, Labour Behind the Label, Remake, The Garment Worker Center, and Awaj Foundation. This page from Support Garment Workers also has a list of campaigns to support.
Support ethical brands when you make a purchase. I have no shortage of ethical & eco fashion brand guides on this blog! This isn’t to say we should buy things we don’t need from ethical brands, but when we do purchase something, choosing to spend money with an ethical brand if we are able to can be a great way to help drive change in the markets.
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