A living wage should cover "basic needs and some discretionary income," according to FWF's Code. But how can that be translated into an exact number?
In January 2016, FWF brand Continental Clothing launched its new FAIR SHARE range of T-shirts and sweatshirts, which carries a small price premium to enhance workers’ wages. Continental received the 2016 FWF Best Practice Award for this inspiring project.
Thanks to a modest increase in the retail cost of the clothing produced at its supplier factory in India, Continental was able to raise the wages of the poorest workers by 50 percent. The British company took care to ensure that additional cost at the point of sale of 10p (0.14€) per T-shirt and 54p (0.71€) per hoody is passed on in its entirety to the workers, avoiding additional markups as the clothes move along the value chain.
In this Best Practice video (here you can find the long version), FWF follows Continental’s Mariusz Stojach as he visits the factory in Tirupur, talks to the workers about their needs and assesses the project with the NGO SAVE, a partner in the project. As he charts the history of the project, he discusses the challenges of increasing costs and the benefits of close cooperation with suppliers.
Since FAIR SHARE was launched, all workers at the factory in India receive a regular bonus, which has boosted their income, even if it still falls short of a proper Living Wage. The company now plans to extend the project further, to reach all levels of its supply chain.
Meet Thet Thet Zon. She has been working as a sewing operator for two years, 6 days per week, 11 hours a day. She earns 125 dollars per month. What does she have left at the end of the month?
Salaries are currently a topical issue in Myanmar, where the minimum wage is up for review. With the high inflations and rising costs of living, unions and Myanmar’s low-wage garment workers are making the case again for better wages.
FWF is very happy to launch Living Wages: An Explorer’s Notebook, the next step forward in figuring out the routes brands and factories can take to achieve payment of living wages. The innovative guide offers concrete advice, based on real-life experience.
The Notebook defines nine obstacles that stand in the way of living wages, and offers some solutions for overcoming them. ‘For the first time, garment brands can access real life examples and concrete guidance on implementing higher wages,’ explains FWF’s Associate Director Sophie Koers. ‘For example on how to select a factory partner, collaborate with other brands and set the target wage.’
‘Start paying higher wages. Now. Analyse what worked and what didn’t. And then keep going.’
This sentence summarises FWF’s advice to brands that seek to make real strides towards living wages in their supply chains. And it offers more concrete advice on how to do this in Living Wages: An Explorer’s Notebook.
Use the tools below to further support efforts to raise wages in your supply chain.
A guest blog by Oxfam GB’s Ethical Trade manager Rachel Wilshaw
One of the initiatives highlighted in Oxfam’s new briefing paper Steps towards a living wage in global supply chains is that of the UK living wage campaign. This was started by parents in the East End of London, whose long working hours on the minimum wage meant they had little time to spend with their families. The Living Wage Foundation was established in 2011 to develop and promote a scheme which accredits employers who pay £7.85 per hour (£9.15 in London) compared with a national minimum wage of £6.50.
A blog by FWF’s Kees Gootjes.
In 2003, an attempt at regulating some of the excesses of corporate governance had the unintentional effect of creating a ‘race to the top’ in top level salaries. While causing public outcry, there are some important lessons the millions of underpaid garment workers worldwide can learn from what happened in The Netherlands – with a little help from FWF’s new and improved Wage Ladder tool.
For more than a decade, discussions about living wages often end in stalemate, as various actors disagree about exactly how to measure living wages. While exact methodologies are important, FWF believes that issues other than measurement are the key to unlocking living wages.
Together with its stakeholders, FWF developed the FWF Wage Ladder, which allows us to leapfrog past the wage measurement debate and start working on improving workers’ wages today.
In the FWF Code of Labour Practices, a living wage is defined as a wage paid for a standard working week that meets the basic needs of workers and their families and provides some discretionary income. ‘Basic needs’ further includes costs like housing (with basic facilities including electricity), nutrition, clothing, healthcare, education, drinking water, childcare, transport, and savings.
But how can this be translated into a specific amount?
If legal minimum wages are in place, why do we need living wages?
It is a fair question. In principle, minimum wage standards should be set at a level that covers basic needs. In principle, legal minimum wage levels are set through balanced, democratically supported social dialogue processes. The reality, however, is different.
The FWF approach to living wages is pretty simple:
1. Methodically identify and investigate the obstacles to living wage implementation
2. Develop tools to overcome the obstacles
3. Get out there and do it
At FWF we are doing all three of these in tandem. Of course, of these three tranches of work, the third is the most important for workers. And to take effective action on wages, FWF members and stakeholders need tools. To this end, tool development continues.