Fair pay and why it’s the biggest wash and hush of them all
Getting into the living wage narrative and why we can't duck away from our responsibility to make them possible
You asked for it, we listened! In our last poll the topic of “Fair Pay“ was most requested. So here we go, this issue of The Crisps is jam-packed with knowledge on living wages. We dive into the basics, explain the differences between living and minimum wages, and analyze price transparency examples of brands in communication. If you are not subscribed yet, here’s your chance.
Hush! That’s pretty much what most brands do in the context of living wages–or any wages for that matter. And we’ve got proof: Every year Fashion Revolution publishes the Fashion Transparency Index tracking 250 of the world’s biggest brands and retailers in fashion. Guess how many brands are transparent about living wages? Almost none! According to the Fashion Transparency Index 2021 only 2 of the 250 brands disclose data on the people in their supply chain who actually earned a living wage. So a sad 99 percent of participating fashion brands don’t.
And then there are brands that publish claims like “we’re paying fair wages to our textile workers“ that are simply incorrect. But we’re not here to bash. We’re here to inform and give advice on how to make it better. So let’s get down to the basics. (After voting in this poll – please.)
Living wages are a human right – period.
Despite decades of talking and several NGOs campaigning for living wages, workers have seen little progress. They still earn wages they and their families cannot live on. The UN’s Universal Declaration of Human Rights, Article 231 can be understood to claim that a living wage is a human right as every person is entitled to earn a wage that supports a dignified life. It’s as simple as that and the reason the UN Global Compact SDG Ambition on Living Wage asks all businesses to pay living wages to their workers.
What does a dignified life mean in detail? Here is the definition of a living wage, which the Global Living Wage Coalition agreed upon: “The 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 dependents.”
There’s a lot of confusion about the difference between living wages and minimum wages. The major differences: A minimum wage is put into place by the government to supposedly ensure that workers can cover their basic needs with the wages they earn. It is defined for the entire country and does not take into account the costs of living in a certain area or the differences between sectors.2 That's why the minimum wage is oftentimes not enough to actually lead a dignified life. One example: the legal minimum wage in Bangladesh is set to 8.000 Bangladeshi Taka (2018)3, the living wage under the Asian Floor Wage is calculated at 53.104 Bangladeshi Taka (2022).4
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Yes, brands are responsible, too!
Brands have several excuses why they are not committing to fair pricing to reach living wages. What’s your favorite one? “It’s the responsibility of suppliers, not ours“? Or “It’s impossible to pay as it would make our products too expensive“? How about our favorite: “Consumers don’t want to pay more”?
Let us just say this: The responsibility to respect human rights cannot be outsourced or pushed away. The UN Guiding Principles on Business and Human Rights (UN Guiding Principles), clearly state the role and responsibilities of businesses and states (governments).
So there’s shared responsibility between the state and businesses. In detail that means, governments have an obligation to protect the human right to a living wage by setting the legal minimum wage. Businesses have to respect the human right to earn living wages and therefore have to pay living wages or fair prices for products and services.
One of the myths we were busting in our social washing issue was that brands pay fair wages to garment workers. Usually, brands don’t own the factories where their clothes are made. Instead, they are outsourcing their manufacturing. The vast majority of the people who produce clothes are directly employed and paid by suppliers; not brands. So it’s the manufacturers paying textile workers wages. Brands pay prices for the products they buy from their supply chain partners. That actually means that the whole narrative around this topic is misleading.
Let’s get practical
With this critical topic, we don’t come empty-handed. We’ve got some examples we want to discuss now. While we love that brands like The Slow Label, ASKET, dariadéh, and more are disclosing their costs, we still have questions. And some suggestions on how to break down costs even more so that they are really transparent and correctly communicated–especially the labor costs. Don’t miss the suggestions that we will publish in our pro issue next week.
Example No. 1: The Slow Label
First up, we really like the approach The Slow Label did here. But we see one issue in how they define labor. The Slow Label aligns labor costs with production costs. From our experience, the labor cost (garment workers using their hands on the product, no management salaries included) make up only 7 to 10 percent of the production costs of a garment. The manufacturing cost is also costs on e.g. rent of the factory, or land, costs on water usage, costs on energy, etc. So the consumer might get confused thinking the total production costs go to the workers in Poland, which they do not.
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Example No. 2: ASKET
ASKET is doing an awesome job in taking up responsibility for the impact scenarios created around making a garment. And we almost feel bad to criticize. But then again, we only learn if we also criticize good solutions to make them even better. Just like in the first example, also the cost breakdown of ASKET doesn’t split up actual labor from the manufacturing costs. So you really can’t tell what workers earned.
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Example No. 3: Ivy Oak
Third time’s the charm? Nope! By now, you hopefully already notice it yourself. Also in this example by Ivy Oak, the production costs are summarized and don’t give any indication of the amount of labor costs and what textile workers earn.
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Example No. 4: Good on You
It’s just as important how the media is covering the topic of wages as they hold an influential stake in informing the end consumers. So let’s have a look at this article by Good On You. It’s great that they put a focus on living wages and discuss this topic with their readers. But the headline in itself is already misleading. Because in most cases brands don’t pay the textile workers directly. They pay prices for the products and the manufacturers pay their textile workers wages. Plus, within the list, there is only one brand, Birdsong London, which is paying living wages for their London-based seamstresses. All other brands mentioned in this article neither clearly disclose wages on the factory level nor the methodology behind their supposed living wage pricing.
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Example No. 5: dariadéh
The cost breakdown of a garment is pretty much the same as in the other examples. But in their FAQ dariadéh is doing a great job at transparently publishing how much the seamstresses in Portugal earn on average–even though it’s not a living wage. Just one more note: Of course, it’s not “their” factories, but the factories they order their garments from. And we would also be careful with Global-South shaming and statements like “standard of living is low” without explaining what it refers to.
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We could continue talking about this topic for another 5 issues but we’ll leave it here for now. We’ll slide into your inbox again next week – if you’ll let us – and go even further. Learn more about living wage benchmarks and how to incorporate wages into your communication by choosing a pro subscription.
It’s up to you if you want to commit for an entire year or just stick around for a month. You’ll receive interviews with leading experts, additional tips, and access to the entire archive. So every time you’re working on that communication strategy or Instagram post, you’ll have a great resource at hand.
In the meantime, we’ve got some additional information down below.
Happy reading,
Tanita & Lavinia
Ressourcen/Links:
Where to find more information and what you can do right now to support legislation for living wages: Good Clothes, Fair Pay
Worth a read: The complicated issue of paying 'living wages' in the Daily Star by Mostafiz Uddin
Which steps to take to implement a living wage program? United Nations Global Compact, Achieving the Living Wage Ambition: Reference Sheet and Implementation Guidance has some answers.
Promised solutions from companies and organizations on tackling low pay in supply chains from the United Nations Global Compact Program, Improving Wages to Advance Decent Work in Supply Chains.
On December 10, 1948 the General Assembly of the United Nations adopted and proclaimed the Universal Declaration of Human Rights. Article 23 “Right to work” define that 1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. 2) Everyone, without any discrimination, has the right to equal pay for equal work. 3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. 4) Everyone has the right to form and to join trade unions for the protection of his interests.
United Nations Global Compact. What is a Living Wage? https://bhr-navigator.unglobalcompact.org/issues/living-wage (accessed 07.05.2023)
Fair Wear Foundation (2023). Wage ladder. https://fwf.my.site.com/livingwage (accessed 05.05.2023)
Asia Floor Wage (2022). Living Wage. https://asia.floorwage.org/living-wage (accessed 10.05.2023)