Dutch workwear brand Schijvens managed to establish a living wage at their supplier in Turkey. They learned some valuable lessons during the process, including figuring out the needs of local workers and the importance of raising all salaries (not just the lowest ones) to maintain wage differences that reflect workers’ skills and experience.
‘Is Productivity the key to funding Living Wages?’ That is the main question in FWF’s latest discussion paper, designed to explore the relationships between productivity, efficiency and living wages.
Stakeholders working with FWF often identify productivity or efficiency increases at factories as ‘the solution’ to living wages: if factory productivity is increased, there will be enough money to improve wages.
FWF experts Doug Miller and Klaus Hohenegger have published a comprehensive article entitled ‘Who pays for a higher wage for garment workers?‘ in industry publication Just-Style.
Focused on statutory minimum wage increases expected in several countries, the articles highlights the importance of calculating the minute cost of labour and making the wage component of garment prices visible during buyer-supplier negotiations to ensure workers are paid what they are legally due.
FWF experts Klaus Hohenegger and Doug Miller visited Bangladesh and Myanmar in October 2018, accompanied by FWF country manager Koen Oosterom. The FWF team conducted training workshops with managers of factories supplying FWF member brands and trade unionists and labour support organisations to promote the costing methodology and costing sheets developed by FWF. These tools make it possible for manufacturers and buyers to isolate the labour component of production costs.
FWF’s Workplace Education Programme (WEP) aims to help workers develop the skills and confidence to speak up and discuss wage conditions in their place of work. One of the key principles underpinning the work carried out by FWF is the notion that the best wage is a negotiated wage. FWF member brands work toward ensuring that their suppliers pay workers living wages to enable them to enjoy decent living standards. To see this change, workers and their representatives must be involved in this process to make it sustainable.
Oxfam Australia recently produced a striking report that makes an important contribution to the growing global debate on living wages in the garment industry.
The study, entitled What she makes: Power and Poverty in the Fashion Industry, highlights the difficult living conditions of the (80 per cent female) workers who are paid very low wages to produce clothing in Bangladesh, Indonesia, Vietnam or China for Australian and international retailers. Read more
More than a dozen FWF brands have joined the FWF Living Wage Incubator. Since January 2017, these leading brands have experimented with cutting-edge approaches to raising wages within their supply chains.
The Incubator is designed to explore various methods for ensuring higher wages for workers. In most garment supply chains, this is not straightforward, since brands often source from dozens of factories, and factories often source to many brands. How can we calculate what any given brand should pay to cover their share of higher wages?
Or: what is the most appropriate living wage benchmark to use in a particular factory or region? How can brands in a shared facility collaborate to raise wages while strictly adhering to competition law? How can we ensure all of the money paid actually reaches workers? And a critical question for all projects is: How can we most effectively integrate trade unions and workers into this process?
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.
As part of the Living Wage Incubator, a group of innovative FWF brands is taking action to increase wages for the workers who make their products. Where do they need to start?
1. Success factors for selecting pilot project locations
A SOLID SOURCING RELATIONSHIP
- Both the factory and the brand are committed to a long-term working relationship.
- Select a partner factory that fosters mutual trust and openness.
STRONG WORKER-MANAGEMENT DIALOGUe
- Ideally, trade unions are active and there is a history of collective bargaining.
- If trade unions are not present: are there worker committees that are elected by workers?
- At a minimum, FWF advises its brands to partner with factories where the WEP training programme has been rolled out.
SHARED COMMITMENT FROM OTHER SOURCING BRANDS
- Pilot projects will be more effective if other brands share the commitment and help cover the costs of increased 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.
The country context has a great deal of influence on the wage situation in any given factory. We sat down with FWF’s Associate Director Margreet Vrieling, to get a better sense of the wage situation in Turkey.
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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.
The vast majority of garment workers – in some regions as many as 95% – are women. Women are found in the lowest-paid jobs in garment factories, and are much less likely than men to work in better-paid supervisory or managerial roles. Women are low-paid: they and their families stand to gain most from a living wage in the apparel sector, and in future blogs I will explore the reasons why.
In December 2014, Oxfam International published its policy paper Steps Towards a Living Wage in Global Supply Chains. The paper outlines some compelling reasons for responsible companies to act now for living wages and examines positive developments on wages.
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?
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:
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.
In this 16 minute video, Ivo Spauwen methodically walks us through the various components of FWF’s Living Wage approach.