Let's talk wages, labor costs and living wages

Plus, the existing living wage benchmarks and what brands can do to advocate for living wages

Hello there, glad you’re diving deeper into wages and prices with us! Last week we talked about minimum wages and living wages. In this issue, you will learn which living wage benchmarks exist and how to interpret the information around prices, wages, and labor costs. Plus, we’ve got some recommendations on how to communicate labor costs in your supply chains and why it matters.

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It’s a good start. We see more and more brands publishing price breakdowns of their products on their website. And that’s not at all the norm. So we really appreciate any brand opening up about their pricing structure. But the way it’s done at the moment is misleading to consumers and, in fact, the industry itself.

Because a big part of the problem is that most professionals (except buyers that are in direct touch with the supply chain partners and some very engaged CSR managers) don’t know how production costs are calculated. So most might think that the production cost is what textile workers earn. Well, it’s not.

To make the entire topic comprehensible and to move the needle towards living wages, brands need to be more transparent and contextualize better. A good way to do that is by splitting up production and labor costs. (More at the bottom.)

In last week’s poll, some said their supply chain partners don’t open up about their textile workers’ wages. Just know, most of the time the problem lies in brands not paying up and not in suppliers being intransparent. But we know how frustrating it can be if you want to make sure living wages are paid in your supply chain. That’s why we’ve got some tips on how brands can advocate for living wages.

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How to advocate for living wages as a brand

🔹 Don’t solely rely on voluntary standard initiatives for change. Because until now they still fail to implement living wages. 

🔹 Living wage benchmarks are a useful tool to support collective bargaining and discussions with stakeholders when negotiating fair prices. Instead of taking the minimum wage as a starting point for labor cost negotiations, one can point to a living wage benchmark as a reference. (We’ve listed the benchmarks down below.)