COVID-19 magnifies wage issues for garment workers

[28 August, 2020] Our living wage coordinator, Anne van Lakerveld, highlights the urgency of fixing low wages in the garment industry, especially during this crisis.

The people who make our clothes don’t earn enough money to live on. The COVID-19 crisis has painfully magnified this uncomfortable truth. The garment industry is not designed to absorb such economic shocks, and it’s workers who end up suffering the most. Now that we really can no longer ignore this problem, let’s turn the tide and make higher wages a reality.

A living wage is a human right. It gives people the financial freedom to take care of themselves and their families and to invest in their future. But most garment industry workers can’t meet their basic needs due to their insufficient wages. COVID-19 has made this more visible than ever. When factories closed their doors, workers were sent home, many without any income to sustain their families, let alone protect them in this crisis. Millions of workers were left on the brink of poverty.

Lowest possible cost
The garment industry is still notoriously competitive in terms of delivery time and price. Across the global supply chain, margins and buffers have consistently been too low. Certainly, too low to weather a storm like this pandemic. Underlying problems that have existed for years have now risen to the surface, like the immense inequality between the different players in garment supply chains.

Brands and retailers benefit most and have the most power in the supply chain, while factories are responsible for ensuring good working conditions. Many brands focus on obtaining garments at the lowest possible cost, and factories try to bring in orders at any price. Not surprisingly, this means workers are paid well below the cost of living. In recent months, the house of cards started to collapse; some of the world’s biggest brands cancelled orders that were already in production or (almost) ready to be shipped, leaving factories and their workers to cover the costs out of pocket.

We’re proud that we hardly saw these cancellations among Fair Wear members. Rather, many members are looking for innovative solutions. For example, some brands have used the bought material to produce more basic items that sell better in web shops. Fair Wear workwear companies started producing material for the healthcare sector. Others are advancing payments and working even more closely with their suppliers.

What brands can do
Even if garment brands are struggling to stay afloat, this is a critical time for them to demonstrate responsible entrepreneurship. When a factory is forced to close or has trouble paying its workers, brands should support their suppliers to help pay wages, especially if they take up a high percentage of their production capacity. Our Fair Wear Labour Minute and Product Costing Calculators help brands calculate what their fair share of wages should be per factory.

Do all brands need to start paying more? Many of them, yes. A lot of garment brands take projected retail values—i.e. how much the consumer is willing to pay—to determine the price they will pay the factory. This top-down way of negotiating fails to consider the actual cost of production, including paying decent wages. Conversely, bottom-up costing, where actual labour and other production costs determine the price (the most logical alternative!), is rarely practiced.

A radical change
We cannot come out of this crisis continuing the same business model. Purchasing practices must be radically improved to protect workers, and long-term business relations must be fostered to strengthen suppliers as well as brands and retailers. Investors must have a longer investment horizon, understanding that responsible sourcing and a stable supply of quality products ultimately serves their interests best. Governments can contribute by setting a fair minimum wage. As for the rest of us: we can start cherishing and valuing the clothes we wear.

It’s our unwavering belief that it’s possible for every garment worker to receive a living wage. That is what drives our work and helps us find ways around the even bigger obstacles that now stand in the way. Together, we can make fair wages a reality.